CHAPTER 21

THE LAST HURRAH

Having a baby changed Ruja. Although usually cold and ruthless, she was always capable of being generous and warm. Around the office she would often ask after interns, and, on one occasion, even paid for a colleague to undergo IVF treatment. But colleagues noticed that motherhood had significantly softened her up. After her daughter was born in early winter 2016, the famously meticulous boss started turning up to meetings unprepared and uninterested, showing photos and discussing nurseries rather than sales techniques. And although she rarely spoke about her personal life in public, she made an exception in a short online video published around this time: “I would like to share very very personal and exciting news,” she announced. “Last week, my little daughter was born.” Work generally started to take a back seat. When she stayed at her sparkling new Kensington penthouse on a two-week trip to London in December 2016, she spent most days shopping—returning home each evening flanked by two exhausted-looking bodyguards carrying bags of designer dresses and jewelry.¹ She started delegating important decisions to Irina Dilkinska and hired a respectable cut-out Luxembourg banker in his late forties called Pitt Arens as new CEO of OneCoin. Although denied when put to Pitt, it is thought he was paid €750,000 a year to oversee the IPO and Dealshaker projects and was promised a 1 percent bonus from any IPO sale. (He said later that he had been in charge of product management not sales, and did not control money flows of any kind.) But he was only in post for a matter of months before resigning, citing a “lack of leeway.”²

OneCoin had raised over €2 billion in income over the course of 2016, recruited hundreds of thousands of investors and held events in almost every country on earth. But success brought pressure, and not just from BehindMLM or Bjørn Bjercke. Every week, there was a new problem. Banks periodically closed down accounts because of suspicious activity.³ The German police were investigating IMS (Frank Ricketts’s infrastructure of companies and accounts that Ruja was using as a feeder fund for Fenero) and there were rumors other police forces were preparing charges too. She still didn’t have a Chinese network license. In late 2016, the Bank of Africa froze one of her bank accounts and detained a handful of OneCoin recruiters, and, a couple of months later, Indian police arrested another 18 promoters in Mumbai. In both cases, the police charged the suspects with running a Ponzi scheme. And although Ruja assured worried investors that these unruly promoters had made unapproved promises, a growing of unease was spreading in the network, all the way up to Ruja herself.

A year earlier, Ruja might have relished taking on her rivals and enemies, but by early 2017—and now with a child to think about—she no longer enjoyed the drama. Colleagues found her increasingly nervous and unusually agitated. Her mobile phones proliferated and she started to become paranoid about being kidnapped by angry investors who had grown tired of endless delays to go public. One close friend recalls that she was even afraid for her life. She took her mother’s name off some of her companies, increased her bodyguard detail and bought a bulletproof Lexus. One afternoon, she phoned Gary at the RavenR office in London and told him everyone was “trying to rip her off,” demanding that someone be sacked, only to change her mind the next day. Gary sometimes felt sorry for his boss. “She often seemed quite lonely,” he recalls. Ruja even started to wonder whether Dr. Hui had conned her too and sent Gary all the way to Madagascar to check if there really was an oil field. (There was.)⁴

She was also tiring of the network and found her MLM promoters increasingly disobedient and grasping. Although they had built the company for her, she had come to hate Kari’s onstage routines and Igor’s clownish suits. And although she tightened up promoters’ T&Cs following legal advice from Hogan Lovells, it was impossible to control tens of thousands of active sellers all over world, who routinely said anything to drive sales. That was her fault too, because it was Ruja herself who’d said all along that OneCoin would make people rich.

Even her relationship with Sebastian became strained. As co-founder, he was under much the same pressure as Ruja herself, and he secretly resented Ruja for firing his girlfriend after the London birthday party. According to later court testimony, in late 2016, Sebastian snuck into a secret OneCoin flat in South Korea, which stored money, and walked out with millions of dollars in a suitcase. When Ruja found out and threatened to expose him to the network, Sebastian returned the money, but their relationship never fully recovered.

The regulators, the hostile press, the banks, the money, BehindMLM, the closure of xcoinx, the greedy promoters, Bjørn Bjercke, the blockchain, Sebastian, and now a child to worry about—it was all getting to be too much. Ruja started to look for a way out.

Her most pressing issue was money. She’d already moved tens of millions without Mark Scott’s Fenero Funds, including buying a penthouse in Dubai, a multi-million-dollar jewelry collection, a fleet of luxury cars, a Sofia townhouse and restaurant. But there were still millions sitting in the Fenero Funds, controlled by Mark Scott. And ever since the near miss with Apex and the accidentally forwarded email, Ruja and Mark’s communications had become less friendly. On one occasion, Konstantin overheard her shouting down the phone that Mark was “an idiot” who “fucked totally up.” She feared that Paul Spendiff from Apex might have alerted the authorities about the dodgy Madagascar oil deal, which meant the remaining Fenero millions could be frozen or seized any day. On days where paranoia struck, Ruja would demand that Mark return all her money “immediately,” which was impossible with the regulated fund structure he’d created. By late 2016, relations between Ruja and Mark had deteriorated to the point of collapse. Increasingly worried, Ruja asked her advisers and contacts to urgently identify investment opportunities so she could turn the Fenero cash into assets she controlled. What followed was a remarkable six-month spending binge.

It’s not easy to send millions of Euros quickly around the world. You need to know the right people. The full extent of her connections and contacts within Bulgaria will probably always remain a mystery, but Ruja certainly knew a lot of influential people both there and in Dubai. There was her work with Tsvetelina Borislavova, the successful businesswoman and long-term partner of prime minister Boyko Borisov. According to an early CV, she was also involved in a boutique investment fund called Delta Capital whose founders had all been senior politicians—Delta had even helped structure a large deal in which the Russian investment bank VTB Capital purchased the Bulgarian state-owned tobacco firm Bulgartabac. Krassimir Katev, a former deputy finance minister and boss of VTB Capital’s Bulgarian subsidiary, attended OneCoin events and Ruja’s London birthday bash. (He was even copied in on at least one email with Max von Arnim, a part-time external consultant to RavenR Capital about investment opportunities. Katev has since stated that Ruja has never worked with or been formally associated with Delta Capital or VTB, or been involved in any deals done by Delta or VTB.) Back in 2015, Ruja was involved in a complex property deal, which entailed selling dramatically cut-price land to a pair of Bulgarian supermodel twins called Boryana and Anna Shehtova, via her Dubai company RISG Limited. Boryana was the long-term girlfriend of a notorious Bulgarian drug trafficker based in Dubai called Hristoforos “Taki” Amanatidis, aka “The Cocaine King.” It’s even possible the deal was in return for some form of protection. According to later evidence from the FBI, “a very significant, if not the most prolific, drug trafficker of all time in Bulgaria was closely linked to OneCoin [and] served as [Ruja’s] personal security guard.”

According to the FBI’s analysis of bank statements, which was revealed in a 2019 court case, Ruja started moving massive volumes of money in late 2016. Three big deals were especially important.

First she transferred around €6 million to a Bulgarian company called “LBJ,” which was another company owned by Boryana Shehtova.

Next, on the advice of her Bulgarian contacts, €51 million was invested in a Bulgarian tobacco company called Openmark, which needed money to open a new factory in Thessaloniki, Greece. That was run by Hristo Lachev, the former boss of Bulgartabac.ⁱ

Someone at HQ—it’s not clear who—identified a horse racing fund based in Dubai called “Phoenix Thoroughbred” that was hawking around for investors. Phoenix was a two-year-old fund created by a Bahraini horse fanatic called Amer Abdulaziz to (among other things) buy, breed and race pedigree horses. In spring 2017, 11 wire transfers totalling €185 million were sent from the Fenero accounts to the Phoenix Funds Dubai accounts, via the Bank of Ireland.⁵ (Phoenix Fund Investments, the parent company of Phoenix Thoroughbred, denies any allegation of wrongdoing.)

Taken separately these money transfers don’t necessarily mean much. Bulgaria’s political and business elite is relatively small, and it’s inevitable that investments of the size Ruja was making would involve influential people. But taken together, they suggest that, by early 2017, Ruja knew some of the most important people in the country. She was connected—both at home and in Dubai, where many of her companies were based. And a little later, those connections might come in handy.ⁱⁱ

By late spring 2017, the Fenero Funds were almost completely empty. It was a remarkable logistical achievement. In little over 12 months, thousands of small OneCoin investments—mostly €5,000 Tycoon Trader and €12,500 Premium Trader packages—had been disguised as large subscriptions from rich Europeans into a regulated fund and transformed into an eclectic mix of shares, properties and businesses. The woman who’d grown up in a small flat above a butcher’s in sleepy Schramberg was now a property magnate, a jewelry collector, and a business investor worth close to half a billion Euros.

His job done, Mark started formally closing down the various Fenero entities.⁶ He’d worked like a dog, flying to either the Cayman or British Virgin Islands no fewer than 10 times and spending hours each week on paperwork.⁷ To celebrate, Mark went on another spending spree: a $1.3 million Sunseeker yacht, two more Porsches, and a $2 million house in the exclusive Hyannis Port neighborhood in Cape Cod. He immediately commissioned $1.8 million worth of renovation work, much to the anger of his neighbors, who were fed up with gawdy out-of-towners upsetting the feel of the historic town. Determined to fit in, Mark paid for a flattering profile about himself in the local real estate magazine.

As she sorted her assets, Ruja also started to wonder if she could get out of this mess. The easy route would be to sneak off to some exotic island or corrupt kleptocracy where the authorities would never reach her. At this point, it seems likely that Ruja didn’t want to actually disappear—she wanted instead to walk away from OneCoin but carry on living the life it had given her. Even as her troubles piled up in early 2017, Ruja spoke excitedly to colleagues about her plans for 2018: to move into the Kensington penthouse and work full-time at the RavenR Capital office in Knightsbridge. She even started researching private schools for her daughter. Maybe it was delusional, but once it became clear her blockchain problem was insoluable, Ruja still hoped to extricate herself from OneCoin without being directly implicated in it.

In a well-executed con trick, the victim doesn’t realize they’ve been duped until long afterward. In a perfect one, they never even know at all. It certainly seemed possible back in 2017. That year alone hundreds of new cryptocurrencies and “blockchain-based” companies were launched, raised millions of dollars from early investors, and then collapsed having delivered little or nothing. Some of them were well-intentioned failures, but others were just smart scams capitalizing on Bitcoin’s growing popularity. Most fell into the gray area somewhere between the two and in many cases the people in charge walked away with no ramifications.

She had ideas about how to convince the world it was all an honest failure, although all of them were fraught with risk. Her promise to IPO OneCoin on a “major stock exchange” and get users to trade their coins for share options was one possible way out. From January 2017 on, Ruja told investors that the IPO was the new route for the coin to go public. “If you have coins, you are entitled to become part of the biggest success story, we hope, since Facebook,” Ruja announced to investors around this time. Rather than cashing out on a currency exchange site as she’d always promised, coin holders were now advised by Ruja to “change as many coins as you can” into share options, which they would be able to sell on for profit to the public once the company was listed.⁸ (Confusingly the coin would also be listed on an exchange once the company was listed on a stock market.) Within a few weeks, almost half of all coin holders had done as she’d asked and exchanged their OneCoin for share options. It’s possible that Ruja really did think the IPO was possible—RavenR Capital consultant Max von Arnim flew to Hong Kong in March 2017 and met with listing advisers there. But according to others involved in planning the IPO, Ruja’s hidden motive was to reduce her liabilities. A draft internal document explaining the plan entitled “The IPO story,” said, “if users give their coins back to the company, they unite together as shareholders,” to which Ruja hastily added a disclaimer: “No guarantee, risk, blablabla.” The moment OneCoin was listed, the share price would likely crash to near zero, because no members of the public would invest in a company like OneCoin. She would then be able to walk away and blame “the market.”

Around the same time, Ruja also toyed with simply selling the entire MLM network to a private investor and quietly winding the coin down, leaving her formidable sales force to push more traditional MLM products like health or beauty products.⁹ She had staff work around the clock to prepare a 40-slide PowerPoint sales pitch, which portrayed the OneLife network as the sales machine of the century: “With over 2.2 million paid members and exceptional loyalty to its culture,” it read, “it is unlikely anyone can duplicate O[ne] L[ife] N[etwork]’s success.” The pitch projected sales of €30 billion “in the near future” and detailed accounting data claimed that OneCoin’s EBITDA (earnings before interest, taxes, depreciation, and amortization, divided by total revenue) was at least double that of Herbalife’s or Avon’s. “The most important thing on her mind at this time was the sale of OneLife,” Gary Gilford said later. “Nothing else seemed to matter.”

Hopeful that she might have found a clever way out with her IPO or fire sale, Ruja decided it was time to relax.¹⁰

Sozopol, July 2017

Like many wealthy Bulgarians, Ruja owned a large property in the picturesque seaside resort of Sozopol, a popular holiday spot 20 miles due south of the more touristic Nesebar and Sunny Beach. The grand mansion—which cost Ruja €7.5 million once the refurb was done—boasted a private beach, 20-meter swimming pool and a children’s play area. Ruja had large roses painted on the pool floor and custom-made imported furniture flown in from Germany and London. She fitted a gym in the basement and, like many extremely rich people keen on privacy, also bought the neighboring property. Over the weekend of July 7 to 9, 2017, a hundred or so of Ruja’s friends and colleagues descended on Sozopol to celebrate the christening of her daughter. To mark the occasion, Ruja unveiled her new €6.9 million superyacht (complete with six rooms, an underwater observation lounge, bar and massage room). It was docked at Sozopol’s tiny port on the west side of the peninsula, a short walk from the historic old town and its cluttered bars and cafes. The 44-meter boat looked absurd alongside the rusty fishing trailers.

A small gathering on Friday night was followed by an all-day party on Saturday, attended by most of her closest friends and family: Konstantin, her parents, Veska and Plamen, her husband, Björn—who Ruja was struggling to fit into her increasingly busy life—Asdis Ran, Sebastian, the Dealshaker boss Duncan Arthur, her consigliere Irina Dilkinska, Gary Gilford from RavenR. Gilbert Armenta, her money man and lover, flew over from Florida. Gilbert was usually very convivial, but he seemed out of sorts and spent much of the weekend in the gym chatting to Konstantin about their shared love of sports, dogs and women. Unusually he mentioned his business affairs with Ruja, telling Konstantin that “the work with your sister is following me around like a big black shadow.”

The party started mid-afternoon with drinks and a conveyer belt of appetizers and snacks. People gathered around the large swimming pool, took small sorties to the private beach and drank champagne. The constant hum of increasingly drunken voices competed with the loud music and echoed off the Black Sea. As the night wore on, Ruja’s parents left and the mood loosened. Even Ruja, who very rarely was drunk in public, swapped her customary Diet Coke for champagne. The climax of the night was—just as it had been a year earlier for Ruja’s 36th birthday party at London’s Victoria and Albert Museum—a famous pop star. For the super-rich, renting celebrities for the night is its own industry, and the wealthier Ruja became, the more famous her private performers. In 2015, it was a well-known Bulgarian pop star. In 2016, she upgraded to Tom Jones. This time she flew over her favorite artist, the American mega-star Bebe Rexha. Everyone piled down to the purpose-built open stage and danced to Rexha, as she performed her hits as if playing to a sell-out stadium. As a treat, Rexha pulled Ruja onstage to sing her favorite song together, “Me, Myself and I.” Ruja was embarrassed; “they’re paid to cheer,” she said, smiling at the large audience. “That’s something we have in common,” replied Rexha. One of Ruja’s make-up artists was caught cavorting on the beach with someone from the London office and was fired the next day. The Bulgarians broke into folk song and traditional dancing, and, on Ruja’s instructions, Gary and Duncan were both thrown into the pool. The whole of the summer continued in a similar vein. Ruja spent most of it in Sozopol, alternating between mansion and yacht, looking after her daughter and welcoming guests. Locals started to recognize the strange crypto woman who threw private parties, and restaurants hoped her high-tipping entourage might roll in. She also made time while in Sozopol to order bespoke Mottahedeh Tobacco Leaf kitchenware for her London penthouse from Harlequin in west London.¹¹

Although Ruja enjoyed the relaxing beach life and break from the pressure of running a billion-dollar company, nothing could fix her problems. In mid-July, she dashed back to the Sofia HQ for a couple of days to host an online webinar with Pitt Arens (the short-lived CEO) and Sebastian, to deal with the continued questions about the blockchain. Nervous investors also wanted to know when the xcoinx.com site was going to reopen—it had been down for six months and counting—so they could cash out whatever coins hadn’t been turned into share options. Ruja reminded investors that OneCoin had a unique and powerful “closed source” blockchain, which was better than Bitcoin, and she complained about “haters” doing the company down. Sebastian blamed “fake news” for the negative rumors while Pitt said he was working on getting xcoinx.com reopened. “Stay with us, be loyal to the company,” Ruja said, “and you guys will see we will make history.”

The irony of OneCoin was that the very technological revolution Ruja spent three years selling to the world—a fixed money supply controlled by computer code—turned out to be the reason she couldn’t escape. Its revolutionary system of unchangeable chronological record keeping had gone from a tool of liberation to a ball and chain. There was simply no way around the problem. The very technology she’d spent three years promoting kept her trapped. By autumn 2017, her plans to IPO or sell the network had gone nowhere and a final collapse was inevitable. It was just a matter of time. But it wasn’t greed or tech that finally pulled the house down, it was her love life.

Footnotes

i Hristo Lachev was approached for comment, but no response was received at the time of publication.

ii There were other transactions around this time which suggest Ruja moved large volumes of money quicker than she’d originally planned to. (Only a couple of months earlier, Mark had told his wife, Lidia, that he thought he could make $25 million with Ruja over the next 18 months.) A Bitcoin wallet Ruja set up in April 2016 to receive payments for OneCoin packages in Bitcoin rather than cash was also emptied of around €2 million in March and May 2017.

¹¹