According to FinanceFeeds, the OneCoin principal Konstantin Ignatov, who stands accused of conspiracy to commit wire fraud, has had his bond application denied by Judge Edgardo Ramos of the New York Southern District Court. Konstantin Ignatov entered a plea of “not guilty” to the charges of conspiracy to commit wire fraud. On March 6, 2019, the Bulgarian was arrested at the Los Angeles International Airport, on a wire fraud conspiracy charge stemming from his role as the leader of an international pyramid scheme that involved the marketing of a fraudulent cryptocurrency called “OneCoin.”
The Ingatov Clan and the indictments
The criminal proceedings also target Ruja Ignatova – the sister of Konstantin Ignatov, as well as Mark S. Scott, a U.S. citizen and attorney, employed for a portion of the relevant time period as a partner at an international law firm, who is said to have organized, owned, operated a series of investment funds known as the “Fenero Funds,” which he used for the purpose of laundering OneCoin fraud proceeds.
The U.S. Indictment charges Ruja Ignatova with wire fraud, securities fraud, and money laundering offenses. As a result of misrepresentations that Ignatova, her brother, and others made about OneCoin, victims invested billions of dollars worldwide in the fraudulent cryptocurrency.
The court papers reveal that the scheme raked in £2.8billion over two years. This was partly achieved by claims that OneCoin’s value has risen from 0.5 euro to just under 30 euro – the valuation was a fiction created by senior figures like the Ignatov clan.
The U.S. citizen Mark S. Scott, a former partner of a major United States law firm, assisted the OneCoin scheme in laundering more than $400 million through a series of purported investment funds holding bank accounts at financial institutions in the Cayman Islands and the Republic of Ireland, among other locations.
Records obtained in the course of the investigation show that, between the fourth quarter of 2014 and the third quarter of 2016 alone, OneCoin Ltd. generated €3.353 billion in sales revenue and earned “profits” of €2.232 billion.
The Bail Request
Ignatov’s counsel had proposed release conditions including GPS location monitoring of Ignatov and $10 million in cash and properties securing a $20 million personal recognizance bond. Further, the defendant had agreed to pay for 24-hour armed guards to ensure that he does not flee. Only pre-authorized individuals would have been permitted inside his residence. Ignatov agreed not to use cellphones, nor a computer, apart for purposes of reviewing discovery and note taking.
The U.S. Government Response
The U.S. prosecutors argued that neither the conditions proposed nor any other combination of bail conditions, will reasonably assure his appearance in this case or protect the community from the danger posed by him. The authorities noted that Ignatov has no ties whatsoever to the United States, possesses citizenship and other ties to countries that will not extradite to the United States, has engaged in extensive international travel and has access to massive foreign financial resources.
He simply cannot be trusted to comply with any conditions set by the Court, having already lied to U.S. border agents, investigating case agents, and even the very Pretrial Services Officers tasked with evaluating appropriate bail in this case”, the US Government said.
The Court Order
Ignatov’s bond application was denied by the Court. Hence, he remains in custody of the U.S. authorities. His siste Ruja Ignatov, however, remains at large.
- Ruja Ignatova, 38, of Sofia, Bulgaria, is charged with one count each of wire fraud, conspiracy to commit wire fraud, securities fraud, and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years sentence, and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison. Ignatova remains at large.
- Konstantin Ignatov, 33, of Sofia, Bulgaria, is charged by Complaint with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.
- Mark S. Scott, 50, of Coral Gables, Florida, is charged by Indictment with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison. Scott was previously unsealed, and SCOTT was arrested in Barnstable, Massachusetts, on September 5, 2018.