Mark Scott was sentenced to 10 years in prison by US District Judge Edgardo Ramos for laundering approximately $400 million in proceeds from the massive international fraud scheme known as ‘OneCoin’.
The sentencing followed Scott’s conviction on all charges at trial on November 21, 2019.
OneCoin, which began operations in 2014 and is based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency of the same name through a global multi-level marketing (MLM) network.
OneCoin started operating in the US in 2015 or thereabouts. Between the fourth quarter of 2014 and the fourth quarter of 2016 alone, the program took more than $4 billion from at least 3.5 million victims.
OneCoin marketed its fake cryptocurrency through a global MLM network of OneCoin members. Unlike legitimate cryptocurrencies, OneCoin had no real value and was considered a scam from day one. The misrepresentations made to OneCoin investors were many and the cryptocurrency was worthless.
Among other things, OneCoin lied to its members about how its cryptocurrency was valued, claiming that OneCoin’s price was based on market supply and demand, when in fact OneCoin itself was arbitrarily determining the value of the coin without taking into account market forces.
The assumed value of a OneCoin steadily increased from €0.50 to approximately €29.95 per coin in or around January 2019. The assumed value of OneCoins has never decreased in value.
Scott, who worked between June 2015 and September 2016 as an equity partner at Locke Lord LLP, a prominent international law firm, was first introduced to OneCoin co-founder Ruja Ignatova in September 2015.
Beginning in early 2016, Scott created a series of sham private equity investment funds in the British Virgin Islands known as the “Fenero Funds.” Scott then disguised incoming transfers of approximately $400 million to the Fenero Funds as investments from “wealthy European families,” when in fact the money represented proceeds from the OneCoin fraud scheme.
He funneled the money through various Fenero Fund bank accounts in the Cayman Islands and the Republic of Ireland. He then transferred the funds back to Ignatova and other OneCoin-related entities, this time disguising the transfers as outbound investments from Fenero Funds.
As part of the scheme, Scott and his associates lied to banks and other financial institutions around the world, including banks in the US, to force those institutions to transfer proceeds from OneCoin and avoid proceedings against money laundering.
Scott was paid more than $50 million for his services in money laundering. He used that money to buy, among other things, a collection of luxury watches worth hundreds of thousands of dollars, a Ferrari and several Porsches, a 57-foot Sunseeker yacht, and three multimillion-dollar beachfront homes on Cape Cod, Massachusetts.
In addition to the prison term, Scott, 55, of Coral Gables, Fla., was sentenced to three years of supervised release. Scott was also ordered to forfeit $392,940,000 in cash, several bank accounts, a yacht, two Porsche cars and four properties.