The co-founder of OneCoin, Mark Scott, has pleaded guilty to money laundering to the tune of $400 million. He has agreed to forfeit $50 million to the US government related to his criminal activity.
During his trial Scott admitted to developing a complicated web of bank accounts, shell companies and false documents to launder illegal proceeds from OneCoin, a cryptocurrency described as a 'fraud'.
According to the pleadings, Scott and his co-conspirators, including Ruja Ignatova, created a multi-year digital currency scam that fraudulently raised at least $4 billion from tens of thousands of investors worldwide.
The Scheme
Scott's scheme had three elements:
- Create false documents: Scott created false accounting documents to deceive investors into believing that their money was being used for legitimate business purposes.
- Create shell companies: Scott created a series of shell companies in the US, UK, British Virgin Islands and other tax havens to disguise and move the illegally obtained funds.
- Money Laundering: Scott used traditional banks and other financial institutions to launder the illegally obtained funds.
Sentence
Scott faces up to five years in prison for conspiracy to commit money laundering and up to 60 years in prison for multiple counts of subscribing false documents. He also faces fines of up to a million dollars.
Conclusion
Mark Scott's fraudulent scheme highlights the need for continued due diligence when investing in digital currencies. His activities remain under investigation, and he is likely to face a stiff penalty for his illegal activities.