2024-01-09 17:23:20
The first verdicts have been made in Germany in the fraud scandal surrounding the invented cryptocurrency “Onecoin”. On Monday, a large criminal chamber at the Münster Regional Court sentenced three accomplices of the underground “crypto queen” Ruja Ignatova to prison terms of several years. A 71-year-old marketing expert was sentenced to five years in prison for aiding and abetting serious fraud and violating the Payment Services Supervision Act; his 50-year-old wife was sentenced to four years. A lawyer from Munich who was also charged has been behind bars for two years and nine months for careless money laundering.
The criminal chamber also ordered the confiscation of assets. In the case of the couple’s joint company in Greven, Münsterland, it is 41 million euros. The man also has to pay 1.2 million euros to the state treasury, his wife 43,500 euros and the lawyer 627,000 euros. After 43 days of trial and extensive evidence, the judges considered it proven that the trio played a key role in setting up and maintaining the pyramid scheme with the fictitious currency, which was used to defraud up to 90,000 private investors in Germany alone.
Investors had to purchase educational materials
Onecoin was never really a digital currency. The main business was educational materials relating to securities trading. Such packages cost at least 100 euros, but could also cost six-figure amounts. There was also a so-called token with which you could generate Onecoin and trade it on the Onecoin marketplace – but only if you had purchased more than one starter package. There were also daily sales limits, depending on the package.
It was therefore only possible to exchange the worthless Onecoins to a very limited extent, and only if you spent more money yourself – a classic pyramid scheme that Ignatova estimates brought in $4.3 billion. Money that was largely forwarded to offshore accounts and to which investors, creditors and investigators still have no access. More than 4.3 billion dollars were stolen in this way, and Ignatova has been searched internationally for years with an arrest warrant – without success.
The self-proclaimed “crypto queen” Ruja Ignatova loved the big stage. : Image: WDR/Onecoin
The focus of the proceedings was not the German-Bulgarian Ignatova as the founder of Onecoin, but rather her German helpers who helped run the fastball system. The couple is said to have operated the European financial headquarters for Onecoin. The 71-year-old man was already an expert in so-called multi-marketing systems, in which an ever-increasing number of members are required for the business model to function. Between the end of 2015 and 2016, the two accepted money from investors. According to the investigators’ findings, 320 million euros from Onecoin sales were transferred to accounts abroad without this being approved by the financial regulator Bafin. The lawyer helped conceal the true origin of the funds. Thanks to his help, up to 75 million euros flowed into bank accounts in the Cayman Islands. Because of the high transfer amounts, Bafin reacted in 2017. Only then did the supervisors block accounts that had been used for Onecoin transactions.
Little hope for investors
Given the length of time, it was a mammoth procedure for the Münster regional court. The first trial began in September 2021. Due to the complexity of the case and the extensive collection of evidence, the Grand Criminal Chamber had planned dates until the end of May 2022. Special protective regulations applied during the corona pandemic. But all the precautions didn’t help. Two volunteer judges were unavailable, and in one case further action was not possible even after a break. At the request of the public prosecutor and the defense, the chamber suspended the proceedings on May 30, 2022. From late autumn 2022 onwards, the hearing had to be renegotiated and evidence had to be taken again.
Marcus Jung and Franz Nestler Published/Updated: , Recommendations: 31 Franz Nestler Published/Updated: , Recommendations: 6 Marcus Jung and Franz Nestler Published/Updated: , Recommendations: 15
Private investors in this country cannot have much hope of getting all their money back. In its years-long investigation, the Bielefeld public prosecutor’s office has so far seized 28 million euros in assets, the authority announced on Tuesday.
The investigation into the Onecoin fraud continues elsewhere too. Last fall, its co-founder Karl Sebastian Greenwood was sentenced to 20 years in an American federal prison. Other senior employees are also on trial in the United States, including Ruja Ignatova’s brother. A Luxembourg citizen who had been placed under house arrest by his home country went into hiding in early summer 2023.
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