1 Himmelheber, Martin, “Die Cryptoqueen aus Schramberg” (NRWZ, May 2020). Much of Ruja and Konstantin’s early years in Schramberg have been pieced together in a series of articles by Himmelheber.
2 Post on “Cryptoqueen” (@Dr.RujaIgnatova) profile page (Facebook, March 20, 2015): https://www.facebook.com/766500173402431/posts/business-woman-of-the-year-2014-dr-ruja-ignatovalet-me-introduce-you-to-a-very-b/905216542864126/
3 Hässler, David, “Pyramidpengar bakom bröllopskupp” (Realtid.se, June 2010)
4 Ekström, J., and Wisterberg, E., “Sebastian Greenwood pekas ut som hjarnan bakom OneCoin—riskerar 20 års fängelse: ‘Var en svärmorsdröm’” (BreakIt, May 8, 2020): https://www.breakit.se/artikel/24885
5 Gjernes, Knut, and Skaalmo, Gøran, “Pyramidepredikanten” (DagensNaeringsliv, June 2010)
6 “Sebastian Greenwood, SiteTalk Convention, Slovenia 2011” (YouTube, March 28, 2011): https://www.youtube.com/watch?v=5Q89YJ-C9Pg
7 Engert, Marcus, “OneCoin konnte Milliarden stehlen, obwohl Banken die Behörden informiert hatten” (Buzzfeed, September 2020): https://www.buzzfeed.com/de/marcusengert/onecoin-banken-fincenfiles
8 “Businesswoman Ruzha Ignatova: I invested in the salon of the transvestite Ursula” (headline translated) (Blitz.bg, November 1, 2011): https://blitz.bg/article/27717
9 Bulgarian company records show that Ruja was director or manager of several companies which were owned by CSIF: Multineshanal Aset Portfolio Salport, Keptial Apartments, Teres Fond, Slavyanska Rial Isyeyt. CSIF was the company owned by Borislavova.
10 “BIOEFFECT EGF Serum—парти 20.07.2011” (YouTube, July 22, 2011): https://www.youtube.com/watch?v=8fk1lCV3p2c/
11 Björn Thomas was Sebastian’s partner in both Towah Group Cyprus and Loopium. Towah was a notorious payment processor for several pyramid schemes in Scandinavia, which shut down some time in 2011. The Cyprus company registration is available here: https://opencorporates.com/companies/cy/HE287205. The exact relationship between Towah and Towah Group Cyprus is unclear.
12 Gibraltar corporate registry: https://www.datocapital.com.gi/companies/Loopium-Ltd.html
1 The first email exchanges about Bitcoin are archived by the Satoshi Nakamoto Institute: https://satoshi.nakamotoinstitute.org/emails/cryptography/12/#selection-89.0-89.125
2 Zetter, Kim, “FBI Fears Bitcoin’s Popularity with Criminals” (Wired Magazine, May 9, 2012): https://www.wired.com/2012/05/fbi-fears-bitcoin/
3 One of the few early mentions of BigCoin is from a Chinese blog site: http://blog.sina.com.cn/s/blog_13785f6da0102vbfj.html
4 The author has been told by three separate people that Ruja and Sebastian first met at a “cryptocurrency conference,” likely in Singapore in late 2013. This was also described by Tommi Vuorinen in a 2016 talk. There are frustratingly few precise details. “Tommi Vuorinen OneCoin esitys” (YouTube, February 29, 2016): https://www.youtube.com/watch?v=Uk1g2KwECJo
5 Ekström, J. and Wisterberg, E., “Sebastian Greenwood pekas ut som hjarnan bakom OneCoin—riskerar 20 års fängelse: ‘Var en svärmorsdröm’” (BreakIt, May 8, 2020): https://www.breakit.se/artikel/24885
1 Loopium legal letter sent February 2014, complaining about funders (author’s copy).
2 One of Ruja’s first jobs was to register a new company at the same Cyprus address as Loopium, which would become the vehicle for the new project. It was called Zooperium, which was then renamed OneCoin. Gibraltar company details for Loopium are available here: https://www.datocapital.com.gi/companies/Loopium-Ltd.html
3 Ekström, J., and Wisterberg, E., “Sebastian Greenwood pekas ut som hjarnan bakom OneCoin” (BreakIt, May 8, 2020): https://www.breakit.se/artikel/24885
4 Ekström, J., and Wisterberg, E., “Sebastian Greenwood pekas ut som hjarnan bakom OneCoin—riskerar 20 års fängelse: ‘Var en svärmorsdröm’” (BreakIt, May 8, 2020): https://www.breakit.se/artikel/24885
5 United States Government Sealed Complaint v. Konstantin Ignatov (March 6, 2019)
6 Juha Parhiala was born in Finland in 1958, but the family crossed over the border when Juha was three years old.
7 Different MLM companies use different techniques to measure sales, and Juha proposed OneCoin use a “binary” model. This meant that each promoter would create two teams, called a “left leg” and a “right leg.” The business volume commission each week would be based on the sales generated by the weaker leg, with the remaining difference between the two carried over into the following week. There were small conditions and exemptions. Promoters who purchased larger packages would receive larger percentage payouts down the pyramid. The trio also placed a weekly cap of no more than €35,000 earnings each week, although this varied depending on how high you were in the network. If a seller reached their ceiling, it was called “maxing out.”
8 “Bangkok OneCoin—Event Guest Speaker Mr. Juha Parhiala” (YouTube, March 3, 2015): https://www.youtube.com/watch?v=WK5VhCRb78Q
9 Ruja set up a new company called Zooperium in Gibraltar, which she then renamed OneCoin Ltd. Ruja also set up a OnePay website, which provided MLM payment solutions—“a global commission payment solution, enabling direct sales companies to pay millions of distributors worldwide instantly.” This suggests that one early idea for OneCoin was to continue with the Loopium idea of providing a payments service to MLM companies. In May 2014, Ruja renamed one of her old Bulgarian companies as BigPay Ltd—possibly to convince John that this was part of a plan to help BigCoin. But then she sold it to a company owned by her mother, Veska.
10 RISG’s address was 1203 Jumeirah Towers, Dubai. OneCoin Limited’s address was just down the hall, at 1209 Jumeirah Towers. The Towers serve as a kind of postal address for companies. Martin Breidenbach, a German lawyer that Sebastian had employed while working for Loopium days, agreed to be secretary.
11 “OneCoin Presentation by Nigel Allan” (YouTube, May 12, 2015): https://www.youtube.com/watch?v=fakVq9UhuDw
12 Early version of the OneCoin homepage, from WayBackMachine: https://web.archive.org/web/20140823011912/http://www.onecoin.eu/
13 The “Bitcoin fork” theory is supported by later court testimony of an IT forensic specialist from the State Criminal Police Office in Germany who had access to the original blockchain.
1 Nigel Allan’s wordpress page: https://nigelsallan.word-press.com/page/2/
2 Järvinen, Petteri, OneCoin—Suuri Bittirahahuijaus (Docendo, 2020)
3 In some accounts of this early meeting, Pehr and Petri were presented with two MLM ideas: one was OneCoin; the other was an iteration of Ruja’s original pension plan idea. It is not clear whether Ruja was present at this first meeting.
4 According to the Federal Trade Commission: “Pyramid schemes now come in so many forms that they may be difficult to recognize immediately. However, they all share one overriding characteristic: they promise consumers or investors large profits based primarily on recruiting others to join their program, not based on profits from any real investment or real sale of goods to the public.” Some critics do not like this distinction and argue that even with a real product a company can still be a pyramid if they make misleading claims about success. In the most well-known case regarding MLM—“In re Amway Corp”—the FTC ruled that Amway was not a pyramid because a consultant must sell 70 percent of their inventory each month to at least ten different customers to get the performance bonus—and there were opportunities to sell back to Amway. This is known as the “Amway Safeguard” and, in the US, this became the standard test of whether an MLM is functioning as a pyramid scheme.
5 Technically speaking, the Tycoon Trader package came with 60,000 tokens. However, the Tycoon Trader package tokens also “split” twice, so any investor who waited a few weeks would have 240,000 tokens. In late 2014, the token-to-coin exchange (“the mining rate”) was 5 tokens per coin, which meant 240,000 tokens generated 48,000 coins. However, within a year or two, the mining rate had increased to over 20, and so would generate fewer coins. As such it’s not possible to say how many coins each package came with—it depended on when the package was bought and the “mining rate” at the time.
6 Level 1 Education (these were known as “OneAcademy”); OneCoin homepage on February 2015, available on WayBackMachine: https://web.archive.org/web/20150206000933/http://www.onecoin.eu/page/details/about One-Coin.eu
7 The Starter Pack came with 1,000 tokens; Trader—5,000 tokens; Pro Trader—10,000 tokens; Executive Trader Trader—30,000 tokens; and Tycoon Trader—60,000 tokens.
8 Järvinen, Petteri, OneCoin—Suuri Bittirahahuijaus (Docendo, 2020)
9 “OneCoin Ruja Ignatova in Malaysia” (YouTube, November 25, 2014): https://www.youtube.com/watch?v=fe76hk4jQ4M
10 Author interview with one of the participants who attended the event itself.
1 Examples from Facebook include: https://www.facebook.com/makeincomedaily/posts/709935209122099; https://www.facebook.com/groups/546215405482356/permalink/609648362472393
2 For Sebastian’s speech at the launch event, see “onecoin launch programme in hongkong” (YouTube, February 2, 2015): https://www.youtube.com/watch?v=fpTAKw-f9N6g. He helpfully listed the top ten countries in the network: China, Thailand, Malaysia, Finland (“It’s quite small,” said Sebastian, “but it has dedicated leaders”), Vietnam, Sweden, India, Russia, Indonesia and, surprisingly, the United States.
3 https://www.flashback.org/t2546019#. Author translated from the original. (“Jag kan inte mer än hålla med, Ja tror verkligen på denna valuta och jag vet folk som verkligen tjänar stora pengar bara på att sprida budskapet. Så ta chansen och bli en del av detta innan det är försent…” Also: “Vet dock 2 stycken som inte har någon anledning alls att ljuga som berättade att dom har tagit ut pengar redan.”)
1 “Igor Alberts Celebrates 32 years in MLM With $110 Million in Lifetime Earnings” (Business for Home, October 19, 2019): https://www.businessforhome.org/2019/10/igor-alberts-celebrates-32-years-in-mlm-with-110-million-in-lifetime-earnings/
2 Taylor, Jon M., “The Case (for and) against Multi-Level Marketing” (Consumer Awareness Institute, 2011): https://bit.ly/3EeT6Oq
3 Aron was one of three brothers (the other two were Christian and Stephan) from German-speaking Switzerland. Aron had been a level above Igor in Organo Gold. The Steinkellers had started their own MLM company called Coligus when they left Organo Gold in 2014, which they sold to OneCoin in early 2015.
4 Worre, Eric, Go Pro—7 Ways to Becoming a Network Marketing Professional (Network Marketing Pro Inc, 2013), p. 50
5 Järvinen, Petteri, OneCoin—Suuri Bittirahahuijaus (Docendo, 2020)
6 This included working with Russian Israeli billionaire Arcadi Gaydamak. The affidavit is available here: http://www.less-entiel.lu/lup/06_2013/sandstone_affidavit.pdf
7 “OneCoin Review: 100-5000 EUR Ponzi point ‘cryptocurrency’” (BehindMLM, September 23, 2014): https://behindmlm.com/mlm-reviews/onecoin-review-100-5000-eur-ponzi-point-cryptocurrency/
1 Taylor, Jon M., “The Case (for and) against Multi-Level Marketing” (Consumer Awareness Institute, 2011): https://bit.ly/3EeT6Oq
2 Liu, Heidi, “The Behavioral Economics of Multilevel Marketing” (Hastings Business Lay Journal, 2018): https://repository.uchastings.edu/hastings_business_law_journal/vol14/iss1/3/
3 The following endnote is another one for the reader with a genuine interest in MLM mechanics. OneCoin operated something called a “matching bonus” system. A promoter would receive a 10 percent commission from the sales of the people they’d brought in, plus 10 percent of the recruits those people brought in; and then 20 percent of the recruits they brought in. In other words, the further down the downline, the higher the commissions. Matching bonuses created an incentive to ensure a promoter helped those below him or her build a team.
4 The US Securities and Exchange Commission decided Bitcoin was a commodity on September 18, 2015, which likely precipitated this change in policy.
5 Igor appears to have misunderstood the phrase. It comes from Shakespeare’s play Hamlet, and the protagonist’s famous soliloquy in Act III, Scene I: For in that sleep of death what dreams may come, when we have shuffled off this mortal coil.
6 Emem, Mark, “OneCoin Scam Victim Files New York Lawsuit after $760,000 Loss” (CCN, July 10, 2019): https://www.ccn.com/onecoin-scam-victim-files-new-york-lawsuit-after-760000-loss/
7 Somerville, Hannah, “Ex-council employees among those embroiled in alleged global scam” (East London Advertiser, April 19, 2019): https://www.eastlondonadvertiser.co.uk/news/crime/onecoin-promoted-to-east-london-residents-3624864
8 There are conflicting stories about how and when OneCoin entered Uganda. According to Dr. Saturday David, it was via David Lombardi, an Italian OneCoin promoter. According to Petteri Järvinen, it was via someone called Jouko Juvonen.
9 “Corruption Perceptions Index 2018” (Transparency International, 2018)
10 In Uganda, it was common for investors to pay in cash in one of the offices, where they had an account set up by their uplines, and were given a code to access it. In Europe or the US, investment was usually done via direct bank transfers.
11 In fact, her foray in Maltese gambling companies started earlier. In May 2015, Ruja created an online gambling site called Coin Vegas, which was marketed as part of the OneCoin family, although very little actually happened with it.
12 The “Sale Agreement of OneCoin Limited” which sets out this deal, is dated October 1, 2015. Technically the deal was signed between al Qassimi and Cesar Degracias Santos and Marisela Yasmin Simmons Hay, who were the on-paper nominal owners of OneCoin Limited. An undated “Acknowledgement,” signed by Ruja, elaborates on the nature of the deal: “I, Ruja Ignatova, acknowledge that I have received 4 (four) USB flash memory drives (flash drives) from HE Sheikh Saoud Faisal al Qassimi containing 230,000.00 Bitcoin, representing the full payment to buy OneCoin Company Limited.” The Acknowledgment also explains that she is handing over three checks to al Qassimi, totalling 209,868,010 AED dated September 7, 2015, September 20, 2015, and October 6, 2015. (As of October 7, 2015, this amounted to €50.719 million according to xe.com’s historic exchange rate data.) There is however some uncertainty over the precise dates. The “Sale Agreement” refers to bitcoin being transferred to Ruja Ignatova in batches between 2014 and May 2015. It is possible therefore that the deal was agreed some point before October 2015. There are also at least two powers of attorney involving al Qassimi: one was granted from Cesar Degracias Santos and Marisela Yasmin Simmons Hay to al Qassimi, and notarized in the Seychelles on October 4, 2016. A separate power of attorney from Ruja herself to al Qassimi was notorized in Dubai on September 27, 2016.
13 This calculation is based on the bitcoin to dollar and dollar to Euro exchange rates on October 1, 2015. The four memory sticks contained 43,618, 30,850, 60,700, and 94,832 bitcoin, respectively. Price calculations are based on the exchange rate and bitcoin price at the time of the deal. According to internal bank documents from Mashreq Bank, Ruja had around $50 million and €15 million in her OneCoin Mashreq accounts. Based on the available evidence, the deal appears to have revolved around the Mashreq accounts. The balance of any other Dubai-based company accounts is not known.
14 Letter from al Qassimi to Essam Issa al Humaidan, Dubai Attorney General, in late 2016. This is addressed from the “Intergovernmental Collaborative Action Fund for Excellence” (ICAFE) of which al Qassimi was “Extraordinary Ambassador.” Leaked documents also include a photocopy of Ruja’s “diplomatic identification” for ICAFE, in which she is referred to as “special adviser.” Ruja’s charity, the “One World Foundation” is cited.
15 Letter from al Qassimi to Essam Issa al Humaidan, Dubai Attorney General, in late 2016. The letter included the notarized power of attorney. Essam Issa al Humaidan’s response is not known.
1 Gilbert’s company Zala Group originally arranged the prepaid cards through a bank in the Caribbean, using a different name (OneNet). When that fell through, he issued cards through his own bank, JSC Capital Bank. OneCoin promoters could register to get a card, pay a few Euros, and then each week their commission was paid directly onto their card—which they could then use like a normal Mastercard.
2 United States v. Mark S. Scott, S10 17 Cr. 630 (ER). According to later court testimony given by Rosalind October, a Senior Financial Intelligence Analyst in the Major Economic Crimes Bureau, four transfers totalling $85 million were made in September 2015 from RavenR Dubai Noor bank account to Zala Group’s account at Comerica Bank. In October 2015, two transfers totalling $13.9 million were sent from the Comerica Bank to Zala’s Regions Bank account.
3 Lehmann, John, “Boris Makes Racket over $1m deposit” (New York Post, January 23, 2003): https://nypost.com/2003/01/23/boris-makes-racket-over-1m-deposit/
4 While not privy to the call itself, I have assumed this was discussed since Ruja wrote this in a follow-up summary email she sent to Mark immediately after the phone call.
5 Robert Courtneidge worked a small number of days for Ruja advising on the cryptocurrency side of the business, most notably writing a detailed “road map” in early 2016 to advise on how OneCoin could “become the mass market crypto currency” with a “stable price.” But from late 2016, Ruja no longer required his services.
6 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), Document 318
7 They were Fenero Equity Investments LP (which was formally incorporated on March 1, 2016), Fenero Financial Switzerland, Fenero Equity Investments II and Fenero Equity Investments (Cayman) I.
8 Mark had already contacted a Dublin law firm called Mason Hayes & Curran to act as secretary for the Irish entities. (On March 11, 2016, Mason Hayes & Curran introduced him to Bank of Ireland executives, who then opened several bank accounts for him.)
9 Fenero Equity Investments LP and Fenero Switzerland had accounts with DMS Cayman; Fenero (Cayman) and Fenero Equity Investments II at Deutsche Bank Caymans.
10 Author’s private copy of agreements between IMS Singapore (March 25, 2016), IMS Germany (March 21, 2016) and IMS UK (March 15, 2016) and Europe Emirates Group DMCC, represented by a formation agent called Adrian Oton. It describes that IMS will provide “implementation, logistics and establishment of new corporate structures and banking in different worldwide jurisdictions.”
11 In fact, B&N Consult was a pre-existing company that Irina purchased. She became the limited partner of B&N Consult on February 29, 2016.
1 RilaCap was a consultancy Ruja founded around this time. The website read: “RilaCap EOOD turns problems into opportunities. We are a company that actively invests in distressed companies and creates value by operational optimisation i.e. allowing companies to focus on high profitable areas.” See internet achive (2011): https://web.archive.org/web/20111014235641/http://www.rilacap.com/pages/view/22
2 Beck, Sabine, “Hoffen auf Gerechtigkeit” (Schwäbische Zeitung, April 2016): https://bit.ly/3paSWTX
1 According to the US government, Konstantin was earning over €10,000 per month and Ruja bought him a €3 million house in Sofia. Konstantin himself claimed he was paid only €3,000 a month to work for Ruja and that his house was worth only around €150,000.
1 Under the BVI Approved Funds Act, regulated private equity funds need to appoint an administrator.
2 The agreement with Apex stipulated that the general partner (Mark Scott) had a legal obligation to notify Apex if he had any concerns or doubts in connection with the investors relating to money laundering, or if there were any changes in the status of the investors.
3 Paul was first introduced to Mark Scott through email in April 2016, via an Apex colleague in the New York office. In fact, Mark had tried to register his funds with another fund administrator first called Appleby, but he failed their due diligence test. Apex also administered a second fund called Fenero Financial Switzerland LP, but there was little or no activity on that fund under Apex’s management.
4 As mentioned, Mason Hayes & Curran, a respected law firm in Dublin, acted as the company secretaries for Mark’s Irish companies. They got in touch with the Bank of Ireland to set up his accounts. According to the questionnaire Scott filled in for Bank of Ireland, this Irish company expected turnover in its bank account to be between €10 million and €25 million a year.
5 Apex sent DMS Bank Caymans a comfort letter on May 9, 2016.
6 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), November 14, 2019, p. 152
7 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), August 31, 2020. Gilbert’s Fates Group sent almost $10 million in three wires to Fenero Equity Investments II between June and September 2016, but this appeared to be a distinct fund—this was the only money it received.
1 Raonimanalina, N., and Fitzgibbon, W., “Chinese oligarch could face scrutiny in Madagascar oil land grab” (The Africa Report, January 8, 2014): https://www.theafricareport.com/4903/chinese-oligarch-could-face-scrutiny-in-madagascar-oil-land-grab/
2 Yingzhi Yang, “China prosecutes 98 people, recovers US$268 million in OneCoin cryptocurrency investigation, report says” (South China Post, May 2018)
3 Author’s personal copy of the term sheet agreement.
4 Author’s personal copy of the power of attorney.
5 Originally the bank transfer was meant to go from Fenero Equities Investment LP to CryptoReal Investment Trust and then on to Barta Holdings. But Mark asked Apex if it could be wired from Fenero to Barta directly.
6 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), November 8, 2019
7 The “Venezuela deal” is one of the more mysterious aspects of Ruja’s spending. In June 2016, Ruja emailed Mark saying, “Mark, we need a pof [proof of funds] for 100 m. The entity does not matter. Until tomorrow. R.” “To whom should it be addressed?” asked Mark. “What’s the deal? And please do not use LL email for these matters.” Max von Arnim, part-time external consultant to RavenR, replied, “It is about the oil deal in VZ. Addressee is PDVAS. Thank you.” This deal may relate to the purchase of 29 pieces of oil extraction machinery in Venezuela. According to a “reasonable expenses agreement” seen by the author, a Hong Kong company called “Jacky Tacson” agreed to send a Venezuelan company called “H&H CA Corp” approximately $500,000 a month for machinery maintenance. H&H CA CORP was also listed in Florida, with Irina Dilkinska as president: https://www.corporationwiki.com/p/2ejz92/hh-ca-corp. It is not known whether these deals ever took place. It has been explained to the author by a source close to Max von Arnim that his intended role was to provide analysis and advice on investment opportunities to RavenR; that his involvement with RavenR was limited as the necessary KYC documentation was never provided to him; and that Max von Arnim did not work for OneCoin and was never involved in receiving or directing any money flow.
8 Engert, Marcus, “OneCoin konnte Milliarden stehlen, obwohl Banken die Behörden informiert hatten” (Buzzfeed, September 26, 2020): https://www.buzzfeed.com/de/marcusengert/onecoin-banken-fincenfiles
9 In a slightly skittish email on July 13, Ruja emailed Mark and Gilbert saying: “As I am having a lot of she-said he-said new issues popping up daily and unfortunately no visible results or clear schedule on what is happening on our project this is why I want to meet you both in person next week.”
10 Mark’s email on July 29, 2016, read: “We are just about to introduce another investor out of Hong Kong, documents coming your way later today, to subscribe for the majority of the remaining financial Fenero Switzerland Fund in tranches.”
11 In fact, Ruja’s name had appeared on the contract between Dr. Hui and CryptoReal Investment Trust, but Paul assumed that was just an authorized signatory, probably a lawyer.
12 Within a few months, however, Mark started having the same problem with their new administrator, Dave van Duynhoven at JP Fund Administration in the Caymans. In March 2017, David was asking Mark about Irina’s source of wealth. “Hi Irina,” wrote Mark. “How will you show that you personally own tens of millions of dollars???? And have banks verify that?”
13 On September 16, 2016, Mark returned to Sofia and met Ruja at the Residence, a private members club where she often entertained visitors. No one knows what precisely Mark and Ruja agreed, although it seemed likely they discussed setting up a separate investment fund for Anatoly and Anton who were working at the RavenR office (Ruja called the pair her “golden Russian boys”) and creating a foreign exchange fund for Ivan Ivanov—another RavenR employee. After the meeting he texted his wife, Lydia, to say he’d just closed a “huge deal” with Ruja.
14 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), November 8, 2019. Preliminary Order of Forfeiture as to Specific Property and Substitute Assets/Money Judgement.
1 “Bitcoin at its most fundamental level is a breakthrough in computer science,” wrote Silicon Valley’s most famous investor, Marc Andreessen, in 2014. And blockchain finally solved the problem of “how to establish trust between otherwise unrelated parties over an untrusted network like the Internet.” Andreessen, Marc, “Why Bitcoin Matters” (New York Times, January 21, 2014): https://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/
2 Bjørn was not the only person they contacted regarding the role. On October 4, 2016, Nigel Chinnock found another blockchain specialist called Gijs Wouters, who Nigel’s colleague contacted (also through LinkedIn), explaining they had a “C Level Role with our client, a billion-dollar financial firm specialising in cryptocurrency.” The founder, explained Nigel in a later email, “is a very sharp lady by the name of Dr. Ruja.” Gijs looked into it and said he thought OneCoin was a scam and declined.
1 “OneCoin was trying to recruit a blockchain specialist last year” (Scam Detector, February 23, 2017): http://kusetukset.blogspot.com/2017/02/onecoin-was-trying-to-recruit.html
2 In level 2, for example, at least 1,623 out of 3,812 words were plagiarized, including the following sections: 1.1 “how does the stock exchange work” (copied from Yahoo Answers and disnat.com); “The NASDAQ” (from How Can I Get Started Investing in the Stock Market); section 1.2 “stocks, mutual Funds and IPOs” (copied from Personal Finance for Canadians for Dummies).
3 “OneCoin 2015: Interview with Auditor Deyan Dimitrov 2015” (YouTube, August 21, 2015): https://www.youtube.com/watch?v=1pzDoT092q8
1 “Blockchain Dev: OneCoin using SQL database script to generate coins” (BehindMLM, February 24, 2017): https://behindmlm.com/companies/onecoin/blockchain-dev-onecoin-using-a-sql-database-script-to-generate-coins/
2 In point of fact, it was possible to make a small profit from international postal reply coupons, but not at the scale Charles Ponzi was claiming.
3 OneCoin claimed to have 80,000–90,000 vendors on Dealshaker. But manually adding up every single available deal and vendor gave a far lower number. Duncan Arthur later told the BBC that there was never more than 10,000 vendors. These calculations are based on data collected by OneCoin critics, who monitored all listings available on the Dealshaker site, read: On May 19, 2017: 13 sellers together owned over 10 percent of all the open deals in Dealshaker. According to OneCoin, there were 31,000 registered businesses back then—but there were only 10,800 open deals. Ari Widell ran a blog criticizing OneCoin (and Dealshaker in particular). See: kusetukset.blogspot.com
4 “Duncan Arthur, London Dealshaker Training” (YouTube, November 2018): https://www.youtube.com/watch?v=-zD-npB0yfj4. Dealshaker worked on a franchise model. Duncan appointed franchise holders in each country, who were responsible for ensuring the deals were legal, followed the “know your customer” anti-fraud rules, and were in line with Dealshaker’s T&Cs.
5 “Fraud Plagues OneCoin’s Dealshaker Platform” (BehindMLM, April 28, 2017): https://behindmlm.com/companies/one-coin/fraud-plagues-onecoins-dealshaker-platform/?sckattempt=1
1 According to internal accounting files, approximately 20 percent of OneCoin’s outgoing was on events and marketing (author’s copy).
2 “Dr. Ruja Ignatova at the 4th EU Southeast European Summit” by The Economist
3 According to the Solicitors Regulatory Authority, carrying out a form of due diligence on a company in which you have a “financial interest” can give rise to conflicts of interest.
4 See, for example, “OneCoin Presentation by Nigel Allan” (YouTube, May 7, 2015): https://www.youtube.com/watch?v=fakVq9UhuDw
5 Memorandum: “Regulatory aspects of multi-level marketing activities conducted by the OneLife Network” (October 2016).
6 Bartlett, Jamie, “Why did the FCA drop its official warning about the OneCoin scam?” (BBC News, August 11, 2020): https://www.bbc.co.uk/news/technology-53721017. At the time the notice was removed, the FCA told one person who queried the decision that “it had been on our website for a sufficient amount of time to make investors aware of our concerns.” This was a strange argument given OneCoin was still being actively promoted in the UK, and several alerts have remained live on the FCA’s website for years. In a later statement to the BBC, the FCA said it was because it did not require FCA authorization—and the decision was made in conjunction with the City of London Police. The City of London Police, however, told the BBC it was the FCA’s responsibility.
1 Testimony of the live-in porter at Abbots House when Ruja lived there.
2 Pitt Arens replaced Pablo Munoz, who had taken over as CEO very briefly in late 2016. Munoz was a former Amway top seller in the United States. However, he found the pressure too great, and quickly left. Technically Pitt’s contract started on December 9, 2016, but, for reasons that are unclear, it wasn’t announced until weeks later. See “OneCoin Leaks: Ruja Ignatova’s passport + Arens’ contract” (BehindMLM, January 25, 2020): https://behindmlm.com/companies/one-coin/onecoin-leaks-ruja-ignatovas-passport-arens-contract/
3 Around late 2016, the national bank of Georgia revoked the banking license for Gilbert Armenta’s JSC Capital Bank for failure to comply with anti–money laundering rules.
4 Gary took a small propeller plane from the capital Antananarivo to a makeshift airstrip near the oil field and drove another three hours to Area 3112. Knowing nothing about oil fields, Gary saw a bit of machinery in the middle of some fenced off land, spoke to a couple of Dr. Hui’s people, and took a video on his phone. (He left satisfied that Ruja did in fact own a real oil field.)
5 According to the Department of Justice, the money went from Fenero Equity Investments LP’s DMS Caymans account to Fenero Equity Investments Ireland’s Bank of Ireland account, then to Fenero Securities Trading’s Bank of Ireland account, and finally via 11 wire transfers to the Dubai bank of “Phoenix Funds.” It wasn’t always plain sailing. Mark even emailed Irina in February 2017 saying “things are not looking good… they know pretty sure OneCoin/OneLife behind it.”
6 According to the Cayman Gazette and British Virgin Islands’ Gazette, Fenero Fintech Europe LP was struck off June 28, 2017, and the liquidation of Fenero Equity Investments started on June 23, 2017. (I have not been able to locate the others.) Mark then dissolved the three key Irish companies (Fenero Securities, Fenero PCT and Fenero Tradenext) in mid- to late 2017. Fenero Equity Investments, however, continued to function. As late as January 2018, Mark changed directorship and added his own lawyer, Nicole Huesmann, as director. (This may have been because there was outstanding paperwork that needed completing before he could strike it off.)
7 United States v. Mark S. Scott, S10 17 Cr. 630 (ER)
8 “Dr. Ruja Ignatova on OneLife STOCK IPO, XCOINX EXCHANGE and New Business Model at Macau—May 7, 2017” (YouTube, May 8, 2017): https://www.youtube.com/watch?v=dMUxAfbAy1M
9 Author’s personal copy of the PowerPoint slides, entitled “Investor Presentation.”
10 There were concerns that neither of these plans would work if she couldn’t fix her blockchain. Any potential buyer would probably send around technical experts to analyze OneCoin’s tech credentials. Similarly, listing shares on a public stock exchange would require full disclosure of company accounts, not to mention independent audits of the blockchain. At the OneCoin corporate event in Macau in May 2017, Ruja decided to address it head-on. Her new CEO, Pitt Arens, told the 5,000-strong crowd that the company had commissioned a blockchain “audit” from a Singapore company called DX Markets, which had reported that OneCoin had a functioning blockchain. “Here is the statement, we have the blockchain,” Kari Wahlroos told the audience, standing beside a large screen, which displayed a sentence from the audit, which read “The OneCoin private blockchain system… has been designed to satisfy the company’s requirements.” (Pitt claims he was given assurances by the IT team in Bulgaria that there was a brand-new blockchain “ordered and paid.”) Bjørn Bjercke would later contact the CEO of DX Markets, a young tech specialist called Marcello Casil. Marcello admitted he hadn’t been granted access to OneCoin’s technology and hadn’t seen any blockchain. His “audit” was in fact simply a paper about theoretical technology DX Markets could potentially build for OneCoin in the future. DX Markets was a blockchain company based in Singapore run by Marcello Casil. Casil was an adviser for a company run by Jed Grant. Grant was a co-founder and partner of Frank Schneider’s Sandstone. Casil signed an NDA and quickly wrote a report describing what kind of things a future, retroactively fit blockchain might do. The “OneCoin private blockchain” Kari described didn’t actually exist. (Marcello Casil later admitted, “I don’t know what they have or had… the work I’ve done was not based on their existing IT systems.”)
11 In case you’re curious, she wrote: “Pls make it however for 18 and make sure there are 3 bowls / plates each and two soup terrines. We will need one coffee can and two teapots… also what are these epergines? Maybe you send a catalogue of the non standard pieces?” This is proof (should any be needed) that even criminal masterminds are interested in kitchenware.
1 Gilbert’s private jet, a Gulfstream IV aircraft, flew into Shannon, Ireland, en route to Sofia on July 21, 2017 (and then back on July 28, 2017); and returned to Shannon on August 13, 2017, and back again on September 8, 2017.
2 “Ad Ernstig Mismanagement MIO” (Knipselkrant, December 2012): https://knipselkrant-curacao.com/ad-ernstig-mismanagement-mio/
3 Pitt Arens announced the news to a group of senior OneCoin promoters at a special meeting at the Sofia office in early September, telling them that a new company called “Golden Gate Investment” would formally run OneCoin’s ICO, which would start in October with an “information phase,” followed by a brand-new token sale, to last for another year; at this point the coin would finally go public. See “OneCoin Affiliates Claim IPO Dropped” (BehindMLM, September 2017): https://bit.ly/3miNJHM. Irina Dilkinska was put in charge of running the ICO. She set up a new website (www.onecoinico.io) on September 25, 2017, incorporated a new company in Panama called AHS Latam, and used the same director—Andri Andreou—who was director of both RavenR London and RavenR Dubai. AHS Latam was the holding company that owned the ICO tokens. To make things more confusing, Ruja called the new ICO tokens OFCs, which was the same name they’d used for the IPO shares.
4 United States v. Armenta Indictment (Sealed)—Document 4 (Docket Number: 1:17-cr-00556). This was filed September 12, 2017, but was made public in April 2020.
5 United States v. Mark S. Scott, S10 17 Cr. 630 (ER). Manhattan District Attorney’s Office senior financial intelligence analyst Rosalind October says that the department received a “tip” in February 2016 about suspicious activities relating to Viola Accounts. (This was Christopher Hamilton’s company.) She adds that some months later the United States Attorney was running a separate investigation. I assume this relates to the “suspicious activity report” that the Bank of New York Mellon filed on February 9, 2017, which related to $350 million worth of suspicious banking activity. Fairly soon the two offices pooled their resources.
6 The original report of the raid here: Hawken, Abe, “Police make biggest EVER UK money seizure as they arrest man, 58, with £30MILLION of banker’s drafts in south Wales” (Mail Online, April 2016): https://www.dailymail.co.uk/news/article-3551654/Police-make-biggest-UK-money-seizure-arrest-man-58-30MILLION-banker-s-drafts-south-Wales.html
7 United States v. Mark S. Scott, S10 17 Cr. 630 (ER).
8 Details of these suspicious payments were published as part of the “fincen files” series: https://projects.icij.org/investigations/fincen-files/confidential-clients/#/en/ruja-ignatova/
9 According to later court testimony, UK law enforcement notified the Manhattan District Attorney’s Office about the Armenta/Viola Assets payments in February 2016. According to Rosalind October, the senior financial intelligence analyst at the Manhattan District Attorney’s Office, “approximately 13 months into our investigation [March 2017] we were working parallel investigations [with the United States Attorney’s Office] and it was more useful for us to pool our resources together and be able to collaborate since we were investigating the same targets.” It’s not clear when the US District Attorney’s investigation started, but the dates suggest it was likely sparked by the Bank of New York Mellon reports, which were filed in December 2016 and February 2017. According to some reports, this joint operation was known as “Operation Satellite.”
10 In a subsequent court case in Wales, the former marine employed by Gilbert Armenta admitted trying to persuade Christopher Hamilton to return the money, but the jury ruled it didn’t constitute harassment.
11 United States v. Armenta Indictment (Sealed)—Document 4 (Docket Number: 1:17-cr-00556).
1 United States v. Konstantin Ignatov, S7 17 Cr. 630 (ER), Document 91.
2 This is according to the testimony of Konstantin Ignatov given under oath at the trial of Mark Scott. Whether or not this was a transcript of the secret recordings, or a transcript of his court proceedings, is not clear.
3 Around one month before her Ryanair flight to Athens, Ruja emailed Konstantin, asking him to organize a meeting with her head of compliance, Veselina Valkova, in order to “discuss the online casinos.”
4 The date of October 2017 is specifically mentioned by Ivan Gershev, head of the Bulgarian Specialised Prosecutor’s Office (a division of the Prosecutor’s Office). Gershev became the State Prosecutor soon afterward. “Неутрализираха международна група за пране на пари чрез уанкойн” (YouTube, January 19, 2018): https://www.youtube.com/watch?v=-ou3lKge_wY
1 RavenR had been charging a monthly fee to “One Network Services Limited” to cover the costs of the RavenR office.
2 Frank Ricketts agreed to rejoin OneCoin in a more senior role while he was in Pattaya, Thailand, in September 2017, with his OneCoin downline called “OneWorld.” (Surprisingly, Juha Parhiala even turned up briefly.)
1 Interview with former employee of OneCoin who was working there during the raid and asked to remain anonymous.
2 McGarry, Dan, “The Companies We Keep” (Daily Post, May 5, 2018): https://www.dailypost.vu/opinion/the-companies-we-keep/article_07616bfb-0705-5dbf-a89e-a75919c4c367.html
1 RISG Limited certificate of incumbency (author’s copy).
2 It may of course have listed one of her trusted associates, lawyers or family members (I have not seen the document).
3 Ruja had set RavenR up as a family office in Dubai, to “focus on wealth accumulation and long-term capital appreciation through investments in high-quality businesses from around the globe,” with herself as sole shareholder and director.
4 RavenR Capital Limited company filings are available at Companies House: https://find-and-update.company-information.service.gov.uk/company/10178932
1 Young, Kristen, “Prosecutors Argue over Evidence in Barnstable Man’s OneCoin Case” (Cape Cod Times, October 2019).
2 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), Document 318.
3 United States v. Mark S. Scott, S10 17 Cr. 630 (ER), Document 19, September 13, 2019.
1 Konstantin Ignatov bail application letter, United States v. Konstantin Ignatov, S7 17 Cr. 630 (ER), Document 91, June 28, 2019.
1 “OneCoin/OneLife leader King Jayms shoots: ‘pretending I see the OneLife haters’” (YouTube, October 5, 2019): https://www.youtube.com/watch?v=g6SuUfUiwzU
1 “Amendment to the Memorandum & Articles of OneCoin Limited.” Dated February 28, 2017, stamped March 1, 2017. This case is also explained in the transcript of case number 724 (of 2020) at the Dubai Commercial Court. The court filings explicitly mention that Ruja received 230,000 bitcoin from al Qassimi as part of the Sale Agreement.
2 At the time of writing, the most recent hearing took place on May 26, 2021. Ruja Ignatova was plaintiff, and al Qassimi the respondent. Lawyers apparently acting for Ruja argued that the sale contract of February 28, 2017 (in which al Qassimi became sole shareholder of OneCoin Limited) should be annulled. At the time of writing the three checks totalling AED 210 million Ruja handed over as part of the Sale Agreement had still not been cashed: and whoever the court ultimately determines is the rightful owner of OneCoin Limited may be able to access those funds. It is not clear whether Ruja herself is personally involved in this case.
1 Details about the case are available from Court Listener: https://www.courtlistener.com/docket/7829201/434/united-states-v-scott/
2 Hennebert, Jean-Michel, “Frank Schneider pas encore prêt à être extradé” (Luxembourg Times, September 23, 2021): https://www.wort.lu/fr/granderegion/frank-schneider-pas-encore-pret-a-etre-extrade-614c5027de135b9236015c24; Kaiser, Guy, “Een Dag aus dem Liewen vum Frank Schneider” (GKOnline, October 4, 2021): https://guykaiser.lu/een-dag-aus-dem-liewen-vum-frank-schneider-2/