Hits: 134

Former Law Firm Partner Sentenced To 10 Years In Prison For Laundering $400 Million Of OneCoin Fraud Proceeds

WPCNR FBI WIRE From U.S. Attorney’s Office, Southern District of New York

Damian Williams, the United States Attorney for the Southern District of New York, announced today that MARK SCOTT was sentenced to 10 years in prison by U.S. District Judge Edgardo Ramos for laundering approximately $400 million of proceeds from the massive international fraud scheme known as “OneCoin.”  Today’s sentencing followed SCOTT’s conviction on all counts at trial on November 21, 2019.

U.S. Attorney Damian Williams said: “Mark Scott, previously convicted at trial of laundering over $400 million of OneCoin proceeds for ‘Crypto Queen,’ Ruja Ignatova, used his law license as a means to participate in a massive money laundering scheme for a cryptocurrency that had no value since its inception.  Scott, an equity partner at a prominent international law firm, had boasted of earning ‘50 by 50.’  Indeed, Scott accomplished his goal, but by fraud and deception, and will now spend a decade in prison and has been ordered to forfeit all of his illegal proceeds.”

According to the Indictment, documents filed in the case, and evidence introduced at trial:

OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network.  OneCoin began operating in the U.S. in or around 2015.  The OneCoin scheme was one of the largest fraud schemes ever perpetrated.  Between the fourth quarter of 2014 and the fourth quarter of 2016 alone, the scheme took in more than $4 billion from at least 3.5 million victims.

OneCoin marketed its fake cryptocurrency through a global MLM network of OneCoin members.  Unlike legitimate cryptocurrencies, OneCoin had no actual value and was conceived of as a fraud from day one.  The misrepresentations made to OneCoin investors were legion, and the cryptocurrency was worthless.  Among other things, OneCoin lied to its members about how its cryptocurrency was valued, claiming that the price of OneCoin was based on market supply and demand, when in fact OneCoin itself arbitrarily set the value of the coin without regard to market forces.  The purported value of a OneCoin grew steadily from €0.50 to approximately €29.95 per coin, as of in or about January 2019.  The purported price of OneCoins never decreased in value.

SCOTT, who was employed between June 2015 and September 2016 as an equity partner at Locke Lord LLP, a prominent international law firm, was first introduced to OneCoin’s co-founder, RUJA IGNATOVA, in September 2015.  Beginning in early 2016, SCOTT formed a series of fake private equity investment funds in the British Virgin Islands known as the “Fenero Funds.”  SCOTT then disguised incoming transfers of approximately $400 million into the Fenero Funds as investments from “wealthy European families,” when in fact the money represented proceeds of the OneCoin fraud scheme.  SCOTT layered the money through various Fenero Fund bank accounts in the Cayman Islands and the Republic of Ireland.  SCOTT subsequently transferred the funds back to IGNATOVA and other OneCoin associated entities, this time disguising the transfers as outbound investments from the Fenero Funds.  As part of the scheme, SCOTT and his co-conspirators lied to banks and other financial institutions all over the world, including to banks in the U.S., to cause those institutions to make transfers of OneCoin proceeds and evade anti-money laundering procedures.

SCOTT, who boasted about earning “50 by 50,” was paid more than $50 million for his money laundering services.  He used that money to purchase, among other things, a collection of luxury watches worth hundreds of thousands of dollars, a Ferrari and several Porsches, a 57-foot Sunseeker yacht, and three multimillion-dollar seaside homes in Cape Cod, Massachusetts.

*                *                *

In addition to the prison term, SCOTT, 55, of Coral Gables, Florida, was sentenced to three years of supervised release.  SCOTT was also ordered to forfeit a money judgment in the amount of $392,940,000, several bank accounts, a yacht, two Porsche automobiles, and four real-estate properties.

Mr. Williams praised the outstanding work of the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Nicholas Folly, Juliana Murray, and Kevin Mead are in charge of the prosecution.


Comments are closed.