OneCoin fraudster gets ten years for laundering $400M
A lawyer who abused his position of trust to conceal his criminal activities has been jailed for a decade after laundering $400 million.
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A lawyer who abused his position of trust to conceal his criminal activities has been jailed for a decade after laundering $400 million from the OneCoin cryptocurrency fraud scheme.
Mark Scott, 55, of Coral Gables, Florida, was handed a ten-year sentence by a federal court in New York for helping Ruja Ignatova, aka “Crypto Queen,” to clean her dirty cash.
Ignatova, who is on the FBI’s Ten Most Wanted list and has been missing since 2017, ran a huge cryptocurrency fraud scheme that masqueraded as a legitimate digital denomination called OneCoin. Between 2014 and 2016, more than 3.5 million victims globally were robbed of a total of $4 billion.
Scott was convicted in 2019 of his part in the scheme, having used his position as a lawyer as a smokescreen to hide behind while he laundered a tenth of OneCoin’s illegal proceeds. Formerly an equity partner at Locke Lord LLP, a prominent international law firm, he had boasted of earning “50 by 50” as a result of his participation in the fraudulent scheme.
In 2016, he set up fake private equity investment funds in the British Virgin Islands known as the “Fenero Funds,” disguising the incoming OneCoin transfers as investments from “wealthy European families.”
Scott then funneled the money through accounts in the Cayman Islands and Ireland – in a laundering technique known as layering – before transferring the funds back to Ignatova and other OneCoin accomplices.
As part of this scheme, he lied to banks and other financial institutions all over the world, manipulating them into making transfers of OneCoin proceeds and thus evading anti-money laundering procedures such as due diligence.
OneCoin began its illicit operations in 2014 and was based in Sofia, Bulgaria, where its alleged mastermind, Ignatova – now believed by some to have been murdered – was born. It pushed the fraudulent cryptocurrency of the same name onto victims using a global marketing network and began defrauding victims based on US soil around 2015.
“The misrepresentations made to OneCoin investors were legion, and the cryptocurrency was worthless,” said the US Department of Justice (DoJ), announcing the sentencing. “Among other things, OneCoin lied to its members about how its cryptocurrency was valued, claiming that the price was based on market supply and demand, when in fact OneCoin itself arbitrarily set the value of the coin without regard to market forces.”
This enabled the crooks behind OneCoin to inflate its value massively, from half a euro per coin to just under €30 in the space of one month in 2019. And, of course, the bogus coins never decreased in ‘value.’
Commenting on the sentencing, US attorney and prosecutor 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 had previously attempted to bargain down his sentence, reportedly requesting a five-year term. Williams had countered that 17 years would be closer to a fair punishment – in this case, presiding judge Edgardo Ramos of the Southern District of New York appears to have settled on a compromise that will bring the culprit little comfort.
“Scott accomplished his goal [...] by fraud and deception, and will now spend a decade in prison and has been ordered to forfeit all of his illegal proceeds,” said Williams.
Cybernews has reached out to Scott’s former employer, Lock Lorde, for comment on his sentencing.
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