A Florida resident confessed to participating in a conspiracy to defraud a bank as part of the $ 4 billion OneCoin Ponzi scheme.
In a telephone hearing in Manhattan federal court, David Pike, 61, pleaded guilty to conspiring to commit bank fraud. Prosecutors have claimed that Pike helped former Locke Lord LLP attorney Mark Scott launder $ 400 million as part of the scheme. Pike could face up to five years in prison after being sentenced in January.
Scott himself was convicted of money laundering conspiracy and bank fraud conspiracy in 2019. Prosecutors said he had set up a bogus investment fund to process the money of the person behind OneCoin, Ruja Ignatova. The Bulgarian woman known as “Cryptoqueen” has been missing since OneCoin was suspected in 2017. Meanwhile, Ignatova’s brother Konstantin Ignatov has pleaded guilty to fraud and money laundering. He also testified against Scott during his trial. Although they are sentenced, the two men are still awaiting their sentencing.
OneCoin Ponzi System
While some cryptocurrency critics claim that Bitcoin itself is a Ponzi scheme, the OneCoin project is an example that turned out to be one. OneCoin claimed to be a cryptocurrency with a private blockchain and a platform to learn more about crypto. The companies OneLife, OneAcademy and OneWorldFoundation were also part of the program.
Its main activity was to sell “educational packages” ranging from $ 110 to $ 55,555, offered by OneLife and OneAcademy. OneWorldFoundation was allegedly a children’s charity that accepts donations through OneCoins, PayPal, wire transfer, and credit and debit cards. Each bundle included “tokens”, which could be assigned to “mine” OneCoins.
However, it turned out that OneCoins had no value and could not be used to buy anything. In reality, OneCoin operates as a multi-tiered global marketing network, in which it pays members commissions for recruiting others to purchase OneCoin packages. Between 2014 and 2016, OneCoin generated 3.4 billion euros ($ 4 billion) in revenue. Based in Sofia, Bulgaria, OneCoin claimed to have over 3 million members worldwide at its peak.
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