Last year a OneCoin victim filed a proposed class-action in New York.
There’s been some significant changes to case since last May, culminating in a Second Amended Complaint filed on September 24th.
Today we take a look at where the OneCoin class-action is at.
The original OneCoin class-action complaint was filed by Christine Grablis. She’s since been joined by Lead Plaintiff Donald Berdeaux.
Grablis and Berdeaux respectively invested $130,000 and $756,000 into OneCoin. Respective out of pocket losses stand at $130,000 and $755,918.
The original case defendants were OneCoin, Ruja Ignatova, Konstantin Ignatov, Sebastian Greenwood and Mark Scott.
As per the Second Amended Complaint, current defendants are OneCoin, Ruja Ignatova, Sebastian Greenwood, Mark Scott, David Pike, Nicole J. Huesmann, Gilbert Armenta and the Bank of New York Mellon.
Konstantin Ignatov was dismissed in August, after reaching a stipulated dismissal agreement with the Plaintiffs.
At the core of the case is OneCoin being a $4 billion dollar Ponzi scheme.
As far as OneCoin being a Ponzi scheme goes, the class-action hasn’t changed since it was originally filed.
Despite being cloaked in technological sophistication and jargon, Defendants operated a century-old fraud that was simple at its core — victims would invest in the OC Investment Programs after they were driven to OC by promoters; and the OneCoin Defendants would then pay existing investors with new money from new investors, who were in turn expected and incentivized to get more new investors to produce more new money for the Company.
The “Scott Group” defendants, David Pike, Nicole Huesmann and Gilbert Armenta, assisted OneCoin by laundering over $400 million.
The Scott Group Defendants received in excess of $60 million in exchange for their enabling of, and assistance in, the OneCoin Defendants’ fraudulent operations.
The Scott Group used the Bank of New York Mellon, which the complaint alleges held a “central role” in OneCoin money laundering operations.
Defendant BNY Mellon played a central role in enabling the Scott Group Defendants’ laundering of in excess of $300 million worth of OC’s criminal proceeds through its organization by:
(i) blindly processing transactions with clear hallmarks of money laundering without conducting cursory due diligence to determine the identities of the persons on behalf of whom such transfers were made;
(ii) permitting the Scott Group to process more than $300 million worth of OC’s criminal proceeds through its organization over the course of more than 220 transactions and six months before bothering to conduct a minimal internal review into the nature of, and parties involved in, such transactions;
(iii) after BNY Mellon’s compliance team’s “internet research” into the Scott Group’s numerous transactions (i.e., visiting the website for one of the OneCoin shell companies used to move criminal proceeds through BNY Mellon (International Marketing Services Pte Ltd. (“IMS”)) indicated the entity was involved with OneCoin and that OneCoin “appears to be operating a pyramid/Ponzi scheme”, declining to impose any restrictions on transactions involving funds originating from OneCoin or its related entities; and
(iv) in March 2017, rather than create filters that would flag and prevent transactions involving funds originating from OneCoin or its related entities, opting to “prevent” such transactions by merely including a filter that would flag future transactions involving only IMS.
The Bank of New York Mellon has not been charged by the US authorities.
Related third-parties cited in the complaint include Irina Dilkinska and Simon Le.
Dilkinska is credited as being “head of OneCoin’s legal and compliance department”.
Dilkinska functioned as a high-level executive, promoter, and spokesperson for the OC organization on all matters relating to investigations into OC’s operations by various countries and enforcement bodies throughout her tenure.
Additionally, Dilkinska served alongside Defendant Scott on the board of at least two investment funds that were used to launder proceeds obtained from the OneCoin Defendants’ fraudulent OC Investment Programs.
It is presently unknown whether criminal charges have been filed against Dilkinska; however, she been named as a co-conspirator in the criminal actions against Defendants Scott, Ruja, and Konstantin.
Dilkinska was dismissed from the OneCoin class action earlier this year due to service issues.
Simon Le Quoc-Hung is cited as a “head promoter” and “Master Distributor” of OneCoin.
Mr. Le’s overall power in the OneCoin operation was similar to Greenwood’s.
Greenwood would provide direct oversight to Le at least on a weekly basis.
Le was the individual who introduced Konstantin Ignatov to Dennis Murdoch, the individual who ensured Konstantin that the DealShaker model described herein was legitimate and legal in the United States to promote further United States marketing.
As was later discovered by Konstantin and described herein, DealShaker was far from a legitimate marketing scheme.
Instead, it was designed to provide the appearance of dedicated marketplaces for OneCoin where OneCoin would be accepted with the goal of legitimizing OneCoin on the world stage.
As of August 2020 Le is promoting Global Sponsorship Network (review pending).
Le is believed to be hiding out in Vietnam and/or Dubai. He has not been charged by US authorities.
Although OneCoin scammed investors across the globe, the class-action focuses on US promotion. Namely across Nevada and New York.
According to Konstantin, Defendant Greenwood and Simon Le worked to target Asian communities in New York to join the OneCoin scheme, with Greenwood providing oversight and direction to Simon Le on a weekly basis.
For example, to market to United States investors while avoiding scrutiny from law enforcement, Simon Le would target United States residents with Asian passports that could be used to spoof IP addresses in Asia, and particularly Vietnam — creating the impression that investments were not coming from the United States or New York, but instead from abroad.
Specifically, Mr. Le would instruct United States residents with Asian passports to use Virtual Private Networks (VPNs) to mask their internet protocol (IP) addresses as a way of deceiving web servers into believing that the users are located in Asia and thus not subject to certain restrictions imposed upon users in the United States.
Among the investors successfully solicited by Simon Le was a wealthy Asian American man in New York who worked in real estate and construction businesses.
Greenwood oversaw and supervised these activities.
Across eleven counts, the class-action seeks damages for
- violations of the Exchange Act and SEC Rule;
- aiding and abetting fraud;
- fraudulent misrepresentation;
- negligent misrepresentation;
- breach of contract;
- unjust enrichment;
- civil conspiracy; and
- commercial bad faith.
Stay tuned for updates as we continue to track the case.