One of the alleged organizers of the infamous financial pyramid OneCoin Konstantin Ignatov was arrested March 6 at the international airport in Los Angeles on charges made in his address the Prosecutor’s office for the southern district of new York (SDNY). This is stated in released today by the press release of the Ministry.
In addition to Konstantin Ignatov, accusations of fraud using electronic communications, securities fraud and money laundering extended to one more organizer of OneCoin, his sister Rouge Ignatova, who is still at large. In addition, in September last year, was arrested one of the leaders of the project, mark Scott.
The main business model OneCoin is to sell education packages for cryptocurrency trading. Members will receive a referral Commission for bringing in new entities and the sale of packages.
According to the statement SDNY, “this multi-level marketing system (MLM) has contributed to the rapid growth of the OneCoin network. At the request of the project, its user base has more than 3 million, among whom were persons living or working in the southern district of new York
SDNY also insists that Ignatov, Ignatova, and other project representatives reported their victims false information. To such misleading information includes statements that cryptocurrency OneCoin Melnitsa with company-owned servers, although in fact, no mining is not conducted.
Representatives of the project say that the basis lies OneCoin private blockchain, but an investigation revealed that no blockchain, there is also no. In addition, the stress in the SDNY, Konstantin Ignatov had made false allegations that OneCoin is preparing for the IPO, which, according to the attorney’s office, was to “create excitement and to attract additional investments from victims.”
Stressing that the allegations have not yet been confirmed by the court, Prosecutor Jeffrey Berman notes, however, that defendants created a multi-billion dollar “cryptocurrency company”, built entirely on lies and deception.
“They promised big profits and minimal risk, but, as expected, their business was a pyramid, which stood more sell, not ones and zeros. Investors became victims, while the accused was rich”, he says.
According to the statement SDNY, as a result of these fraudulent acts only in the period between the fourth quarter of 2014 and third quarter of 2016 OneCoin Ltd has received 3,353 billion euros in sales with a profit of $ 2,232 billion euros.
In addition, during the investigation it was established that Ignatova and her business partner built the company, in advance, intending to go to the deception of investors. In particular, the Procurator mentions one of the letters Ignatova, in which she described an “exit strategy” from OneCoin. The first option there was specified a scenario in which the organizers disappear with money, laying the blame for their loss on other people.
We will remind, in September 2016, the control over observance of norms of behavior in the financial markets UK has released an official warning that the company believes OneCoin fraudulent scheme with the use of network marketing. Similar statements were made by other regulatory authorities of the countries of the world, including the Belgian Service for the financial services and markets, Bank of Hungary, the Commission for financial control of Bulgaria and law enforcement agencies of Sweden and Latvia.
In April 2017, the Federal financial Supervisory authority of Germany (BaFin) blocked accounts associated with OneCoin payment service IMS International Marketing Services GmbH, and later in the same year, allegations of fraud against None Ignatova advanced by the police in India.
In addition, in January 2018 the law enforcement authorities of Bulgaria have raided the offices of OneCoin and 14 related companies, accused of creating a “centralized cryptocurrency pyramid”. As a result of the RAID was confiscated servers, documents, and other evidence. Also, police questioned about 50 people, but no arrest followed.