US Department of Justice press release published today announced that criminal charges have been filed against Ruja Ignatova and her brother Konstantin Ignatov.
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| Konstantin Ignatov |
Konstantin Ignatov was arrested on a wire fraud conspiracy charge March 6 at Los Angeles International Airport. Quoting the press release: "Between February 27, 2019, and March 6, 2019, IGNATOV travelled to the United States to conduct OneCoin-related business, including in Las Vegas, Nevada, where he stayed at a casino resort. While in Las Vegas, IGNATOV met with a number of OneCoin affiliates."
– I don't know why Konstantin Ignatov dared to set his foot on US soil, especially now after it was evident that US authorities were after OneCoin scammers. Maybe Ignatov had a false sense of security and he thought that there wasn't enough evidence available to file charges against him. Boy was he wrong.
Here are the charges against Ruja and Konstantin:
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.
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.
Investigation: OneCoin has no blockchain
The press release by the US Department of Justice is very thorough and makes also clear that OneCoin hasn't had a blockchain and is nothing more than a malicious scam designed to rob money from gullible people.
Quoting: "The investigation has revealed that OneCoin lacks a true blockchain, that is, a public and verifiable blockchain.[2] Moreover, by approximately March 2015, IGNATOVA and her co-founder had started allocating to OneCoin members coins that did not even exist in OneCoin’s purported private blockchain, referring to those coins as “fake coins.”"
The true nature of Ruja Ignatova was always there to see, but many of the victims of OneCoin worshipped her like she was a goddess with a heart of gold. However, the US investigation has revealed a nice gem that reveals that Ruja Ignatova only intention was to scam money from the investors:
"Moreover, the investigation has revealed that IGNATOVA and her co-founder conceived of and built the OneCoin business fully intending to use it to defraud investors. For example, in one email between IGNATOVA and her co-founder, IGNATOVA described her thoughts on the “exit strategy” for OneCoin. The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .”
The name of the co-founder isn't revealed. I would suspect that it is Sebastian Greenwood who was arrested months ago.
And here's more email correspondence telling exactly what OneCoin was:
"In the summer of 2014, Ruja and Founder-2 were developing the concept and payout plan for OneCoin, which they referred to at the time in e-mail correspondence as "trashy coin." On June 11, 2014, Ruja wrote to Founder-2 concerning the OneCoin business plan:
It might not be (something) really clean or that I normally work on or even can be proud of (except with you in private when we make the money) – but ... I am especially good in this very borderline cases (sic), where the things become gray - and you as the magic sales machine – and me as someone who really can work with numbers, legal and back you up in a good and professional way - we could really make it big - like MLM meets bitch of wall street ;-)"
Later that summer:
"Beginning in or about August 2014, Ruja and Founder-2 developed the idea of marketing to members that tokens could be used to "mine" OneCoins. In an e-mail to Ruja dated August 11, 2014, Founder-2 proposed:
"Get members to think that they are mining their OneCoin via crunching (exchanging) tokens for OneCoin. This storey (sic) is good as ppl will then not go super crazy and just try and sell tokens all the time."
Founder-2 e-mailed Ruja the following day, writing, "The concept of converting tokens into OneCoin is an important phase for validity and truth behind the OneCoin. The so called "mining" of coins is a concept that is very familiar in the industry and a story we can sell to the members." Ruja then wrote to Founder-2, "We are not mining actually – but telling people shit," to which Founder-2 responded, "how can this be investigated and found out?" and "Can any member (trying to be clever) find out that we actually are not investing in machines to mine but it is merely a piece of software doing this for us?""
"Founder-2" and Konstantin Ignatov sharing messages about the people in the network:
For example, on September 21, 2016, KONSTANTIN IGNATOV, the defendant, and Founder-2 shared the following message exchange:
Founder-2: These ppl are crazy
Founder-2: Like they want to speak every hour
Founder-2: Abt shit
IGNATOV: haha they are. tried to fixed it with him, tried to avoid bothering you as far as possible. so you are not lost everything s fine ;)
Founder-2: Emoticon
Founder-2: These ppl are idiots
IGNATOV: as you told me, the network would not work with intelligent people ;)
OneCoin generated over 3 billion euros in sales revenue
According to the investigators the money flow to the scam has been massive.
"As a result of misrepresentations made by IGNATOV, IGNATOVA, and other OneCoin representatives, victims throughout the world wired investment funds to OneCoin-controlled bank accounts in order to purchase OneCoin packages. 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 press release also confirms that OneCoins have not been "mined" using computer resources and the value of the coins isn't real. – As I and many others have been saying since the beginning of this scam while warning possible investors and victims.
"The purported value of a OneCoin has steadily grown from €0.50 to approximately €29.95 per coin, as of January 2019. In fact, the value of OneCoin is determined internally and not based on market supply and demand; and OneCoins are not mined using computer resources."
"I don't know why Konstantin Ignatov dared to set his foot on US soil, especially now after it was evident that US authorities were after OneCoin scammers."
ReplyDeleteThis could be explained by the fact that they had held so many events on so many countries, some of which even had cease-and-desist orders in place at the time.
Since authorities had not taken action, he grew into a fake feeling of security.
Ruja never tried to operate in U.S., not even when they "operated in 314 countries".
According to the court document Ruja was already nervous about entering Frankfurt airport on September 15, 2016. She was apparently worried because she was identified as the leader of the ponzi-pyramid, and heavily connected to everything with tons of evidence supporting her role as the scam leader.
DeleteInterestingly she already had plans for Konstantin in case she wasn't able to run the scam.
The amount of denial presented in the online forums is amazing.
ReplyDeleteOf course part of it should be credited to the promoters doing everything they can to keep the victims from filing charges.
And of course part of it can be attributed to just plain Internet trolling.
But still we're left with some of the finest humor I've gotten to read for a while. E.g. the blog of Petteri Järvinen has some amazing views on how the arrest of Konstantin does not imply that OneCoin would be fraudulent business.
It is interesting how this same phenomenon occurs in many scams - even way after a scheme has collapsed and there's no question whether it was a scam or not. I guess some people just are way thicker in the head than others.
DeleteKonstantin chose to plead "not guilty", although it may be that he has made a deal nevertheless and just pleads guilty later.
ReplyDeleteHowever, today is the day they'll have the next hearing. Exciting.
Regardless whether Konstantin pleads not guilty or not it's going to be interesting to see how the MLM side of the scam reacts. The reasoning of those people reminds a lot how flat-earthers reason to get to the most idiotic conclusions.
Delete