Tag: PYRAMID SCHEME

OneCoin’s Former Legal Head Pleads Guilty to Fraud and Money Laundering

by Blockchain News

Irina Dilkinska, the former “Head of Legal and Compliance” of OneCoin, has pleaded guilty to wire fraud and money laundering charges. This plea marks a crucial step in the ongoing investigation into the multi-billion dollar pyramid scheme that defrauded investors worldwide.

OneCoin, established in 2014 by Ruja Ignatova and Karl Sebastian Greenwood, was a company based in Sofia, Bulgaria. It was marketed as a revolutionary cryptocurrency but was, in reality, a fraudulent pyramid scheme operated through a global multi-level-marketing (MLM) network. Despite being revealed as a scam in 2015, OneCoin managed to generate significant revenues, amounting to over €4 billion between 2014 and 2016.

Dilkinska, the 42-year-old Bulgarian national, served as OneCoin’s head of legal and compliance. Contrary to her role, she facilitated the laundering of millions of dollars of illicit profits garnered by OneCoin. Among her notable activities was the transfer of $110 million in fraudulently obtained proceeds to a Cayman Islands entity.

Dilkinska pleaded guilty to one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering, each carrying a maximum potential sentence of five years in prison. Her sentencing is scheduled for February 14, 2024, under the jurisdiction of U.S. District Judge Edgardo Ramos. The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.

Ruja Ignatova, known as the “Cryptoqueen,” remains at large since her disappearance in 2017, shortly after a federal warrant was issued for her arrest. Ignatova was added to the FBI’s Top Ten Most Wanted List in 2022, with a $100,000 reward for information leading to her arrest. Co-founder Greenwood was convicted of fraud and money laundering, receiving a 20-year prison sentence and ordered to pay $300 million in restitution.

The guilty plea of Irina Dilkinska in the OneCoin case underscores the extent of the fraudulent activities within the cryptocurrency scheme. With significant financial losses and global impact, the case continues to be a stark reminder of the risks associated with unregulated digital currencies.

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Co-Founder of AirBit Club Sentenced to 12 Years for Cryptocurrency Ponzi Scheme

by Blockchain News

Key Takeaways

  1. Pablo Renato Rodriguez, co-founder of AirBit Club, sentenced to 12 years in prison.

  2. Rodriguez and co-defendants ordered to forfeit approximately $100 million in assets.

  3. Co-defendants await sentencing; previous involvement in pyramid schemes revealed.

Background and Conviction

Pablo Renato Rodriguez, co-founder of AirBit Club, was sentenced to 12 years in prison on September 26, 2023, by U.S. District Judge George B. Daniels. The sentencing was announced by Damian Williams, the United States Attorney for the Southern District of New York. Rodriguez was convicted for his role in orchestrating a global pyramid scheme through AirBit Club, a purported cryptocurrency mining and trading company. The co-defendants, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have pled guilty and are awaiting sentencing.

Deceptive Practices

AirBit Club was founded in 2015 by Rodriguez and Dos Santos. They falsely promised investors guaranteed profits in exchange for cash investments in club memberships. The company was marketed as a multilevel marketing club in the cryptocurrency industry. However, no actual Bitcoin mining or trading took place on behalf of the investors. Instead, Rodriguez and his co-conspirators used the money for personal expenses and to finance more recruitment events.

Asset Forfeiture

Rodriguez and his co-defendants have been ordered to forfeit their fraudulent proceeds, which include assets consisting of U.S. currency, Bitcoin, and real estate currently valued at approximately $100 million.

Previous Legal Troubles

Before AirBit Club, Rodriguez and Dos Santos were sued by the Securities and Exchange Commission (SEC) for another pyramid scheme known as Vizinova, and paid $1.7 million in disgorgement and fines.

Upcoming Sentencings

Dos Santos, Millan, Chairez, and Hughes have pled guilty to charges including wire fraud conspiracy, money laundering conspiracy, and bank fraud conspiracy. They are scheduled to be sentenced in early October 2023.

Cryptocurrency Ponzi schemes are not uncommon in a world where regulatory oversight is still catching up. On September 28, 2022, the U.S. Attorney’s Office announced the eighth distribution of over $4 billion to victims of the Madoff Ponzi scheme, which was not cryptocurrency-related but serves as a reminder of the recurring nature of such fraudulent schemes.

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Musk Requests Dismissal of $258 Billion Dogecoin Pyramid Scheme Lawsuit

by Blockchain News

Elon Musk, the billionaire entrepreneur and CEO of SpaceX and Tesla, is facing a $258 billion lawsuit accusing him of operating a pyramid scheme to promote the popular cryptocurrency Dogecoin (DOGE). However, Musk and his legal team are now pushing to have the lawsuit dismissed, stating that the allegations are baseless and lacking in evidence.

The lawsuit was filed by a group of Dogecoin investors in June 2022, who claimed that Musk had used his enormous social media influence to artificially inflate the price of DOGE, causing them to suffer significant financial losses when the cryptocurrency’s value subsequently plummeted. The investors also accused Musk of manipulating the cryptocurrency market to his own advantage, calling his actions a “dogecoin hustle.”

However, according to a Reuters report from April 1, Musk’s lawyers have now requested that the lawsuit be dismissed on the grounds that it is a “fanciful work of fiction” with no factual basis. The hearing took place on March 31 in Manhattan’s federal court, where Musk’s legal team argued that the investors’ claims were entirely without merit and should be thrown out.

This is not the first time that Musk has faced legal action related to his involvement with cryptocurrencies. In 2018, the US Securities and Exchange Commission (SEC) fined him $20 million for allegedly misleading investors with tweets about taking Tesla private. The SEC also required Musk to step down as the chairman of Tesla’s board of directors.

Despite the legal challenges, Musk remains a high-profile figure in the world of cryptocurrencies, and his social media posts about DOGE and other digital assets continue to garner significant attention from both fans and detractors alike.

In recent years, Musk has publicly expressed his support for cryptocurrencies, particularly DOGE, which he has referred to as “the people’s crypto.” However, his statements have also been criticized for their potential to influence the market and create volatility.

Despite the controversy surrounding Musk’s involvement with cryptocurrencies, many investors and traders remain bullish on DOGE and other digital assets, viewing them as a potentially lucrative investment opportunity. Whether the lawsuit against Musk will ultimately be successful remains to be seen, but it is clear that the world of cryptocurrencies continues to be a hotbed of legal and regulatory challenges.

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