OneCoin head of compliance facing 40 year sentence after US extradition

March 22, 2023 Coin Telegraph

The alleged fraudster was accused of doing the “exact opposite” of her job title, which was to ensure OneCoin was complying with laws.

United States federal prosecutors have charged a former executive of the fraudulent cryptocurrency scheme OneCoin for her role in the operation, who now faces up to 40 years in prison after being extradited from Bulgaria.

On March 21 the Department of Justice (DOJ) charged OneCoin’s former head of legal and compliance Irina Dilkinska with one count of wire fraud and one count of conspiracy to commit money laundering, each carrying a maximum potential sentence of 20 years in prison.

Dilkinska allegedly aided in laundering over $400 million of OneCoin’s proceeds, and upon hearing of a co-conspirator’s arrest destroyed incriminating evidence and sent incriminating messages.

Bulgarian woman charged for role in multi-billion-dollar cryptocurrency pyramid scheme “OneCoin” and extradited from Bulgaria to the United Stateshttps://t.co/XsY0rYJWeF
— US Attorney SDNY (@SDNYnews) March 21, 2023

U.S. Attorney Damian Williams pointed out the irony in Dilikinska’s job title given the nature of OneCoin, saying:

“Irina Dilkinska, the supposed Head of Legal and Compliance for the OneCoin cryptocurrency pyramid scheme, accomplished the exact opposite of her job title and allegedly enabled OneCoin to launder millions of dollars of illegal proceeds through shell companies."

The announcement said Dilkinska was extradited from Bulgaria on March 20 and was set to appear before U.S. Magistrate Judge Sarah Netburn the following day.

OneCoin was founded in 2014 by “cryptoqueen” Ruja Ignatova and Karl Sebastian Greenwood, the latter of which pleaded guilty to multiple charges brought against him in December 2022 and faces up to 60 years in prison.

Ignatova, however, has managed to evade law enforcement agencies, going missing in October 2017 after a flight to Greece just 15 days after a federal warrant was issued for her arrest.

In 2014, a woman named Ruja Ignatova launched a fake cryptocurrency named "OneCoin". Despite the currency never existing, Ruja convinced people all over the world to invest. In 2017, after raking in $4 billion profit, she boarded a plane to Greece and hasn't been seen since. pic.twitter.com/DoJCfmy0Uj
— Facts - Weird & Interesting (@info_tale) March 15, 2023

In June 2022, Ignatova was added to the Federal Bureau of Investigation’s Top Ten Most Wanted List, and a $100,000 reward is offered for information leading to her arrest.

OneCoin was exposed as a scam back in 2015 but managed to generate over $4.3 billion in revenue, with profits of nearly $3 billion, between Q4 2014 and Q4 2016 alone.

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AirBit Club execs face decades in prison after pleading guilty to $100M fraud

March 9, 2023 Coin Telegraph

AirBit Club

Co-founder Rodriguez and senior promoters Millan, Aguilar and Chairez all recently pled guilty to the charges, while the other founder, Dos Santos pled guilty in October, 2021.

Six people involved in a cryptocurrency “Ponzi scheme” that raked in about $100 million over five years have pled guilty to a series of fraud and money laundering charges, each carrying a maximum sentence of 20 to 30 years of prison.

One of the founders of “AirBit Club,” Pablo Renato Rodriguez, was the latest to plead guilty to wire fraud conspiracy charges on Mar. 8.

According to a Mar. 8 statement from the United States Department of Justice (DOJ), AirBit Club was a fake cryptocurrency mining and trading company operating between 2015 to 2020, where executives and promoters induced victim investors into believing that they’d make guaranteed passive income and profits on any membership purchased.

Operators and attorney of global multi-million-dollar cryptocurrency Ponzi scheme “AirBit Club” plead guiltyhttps://t.co/MT3mM9aqPV
— US Attorney SDNY (@SDNYnews) March 8, 2023

According to the DOJ, the perpetrators traveled throughout the United States, Latin America, Asia and Eastern Europe to market AirBit at “lavish expos” to convince investors to purchase AirBit Club memberships.

Victims saw “profits” accumulate on the AirBit Club online portal, but no actual mining or trading was ever carried out. One victim trying to withdraw was asked to “bring new blood” into the AirBit Club scheme in order to withdraw her funds.

U.S. Attorney Damian Williams said the operators used funds from victims to purchase luxurious cars, houses and jewerly. Some of the proceeds were used to finance more expos to recruit more victims too:

“The defendants took advantage of the growing hype around cryptocurrency to con unsuspecting victims around the world out of millions of dollars with false promises that their money was being invested in cryptocurrency trading and mining."

"Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets," he added.

The representatives were first officially charged Aug. 18, 2020.

Since then, senior promoters Cecilia Millan, Jackie Aguilar and Karina Chairez each pled guilty to a series of wire fraud conspiracy, bank fraud conspiracy and money laundering conspiracy charges on Jan. 31, Feb. 8 and Feb. 22, while another founder, Gutenberg Dos Santos pled guilty to wire fraud and money laundering conspiracy charges on Oct. 21, 2021, according to the Mar. 8 statement.

These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud,” Williams added.

The operators have been ordered to forfeit their fraudulent proceeds of AirBit Club, which include fiat currency, real estate and Bitcoin (BTC), collectively valued at about $100 million.

Cointelegraph found there are still videos of the AirBit Club representatives marketing the membership scheme on YouTube.

The scheme often used the hashtag “#AirBitBillionaireClub” and shared several fake success stories of investors to try to lure in more victims.

California-licensed Attorney Scott Hughes, an attorney accused of laundering proceeds of the scheme, also pled guilty to money laundering charges on Mar. 2.

Rodriguez, Millan, Aguilar, Chairez and Hughes will be sentenced on different dates between June and August this year.

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US Prosecutors Seek to Further Restrict Former FTX CEO Sam Bankman-Fried’s Internet Access

March 5, 2023 Bitcoin.com

Report: Former FTX Director of Engineering Nishad Singh Negotiating Plea Deal with Prosecutors

February 18, 2023 Bitcoin.com

Prosecutors Seek Restrictions on Former FTX CEO’s Electronic Devices Following VPN Use for Football Streaming

February 17, 2023 Bitcoin.com

Sam Bankman-Fried may no longer be allowed to play League of Legends

February 16, 2023 Coin Telegraph

$250M

Sam Bankman-Fried is, for the most part, still able to freely access the internet through various devices. Prosecutors want to change that.

Sam Bankman-Fried, the former CEO of crypto exchange FTX, may no longer be able to play League of Legends and other video games if newly proposed changes to his bail conditions from United States prosecutors are approved.

In a Feb. 15 letter to United States District Judge Lewis Kaplan, U.S. Attorney Damian Williams asked the court to further expand restrictions surrounding Bankman-Fried’s electronic device usage.

They pointed to Bankman-Fried’s recent device usage as cause for concern, and agreed with the court’s intuition that it was “shortsighted” to focus only on restricting the use of apps, adding:

“There is now a record before the Court of a defendant who appears motivated to circumvent monitoring and find loopholes in existing bail conditions. The appropriate course, therefore, is broader restrictions on the defendant’s cellphone, tablet, computer, and internet usage, with limited exceptions.”

The prosecutors propose that Bankman-Fried should be prohibited from using cellphones, tablets, computers, or the internet, except for very limited uses such as reviewing pre-trial evidence, communicating with lawyers and accessing emails.

Here’s the list of proposed new bail restrictions that SBF is going completely ignore, without any real consequences https://t.co/cMVCdmRAj3
— Sean Tuffy (@SMTuffy) February 15, 2023

He would be restricted to using a single computer and cell phone, which in addition to his Gmail account would be monitored using a “pen register” — a device or process that essentially produces a list of phone numbers of internet addresses contacted from a specific source.

Bankman-Fried is understood to be an avid gamer, having reportedly played online video games such as League of Legends during fundraising rounds while at FTX.

Bankman-Fried also mentioned during an interview with New York Times on Nov. 13 that he likes to play games, as it helps him “unwind a bit” and clear his mind.

Under the newly proposed bail conditions, it appears that Bankman-Fried will no longer be allowed to partake in the activity.

Earlier this month, the former CEO was prohibited from using encrypted messaging apps after he was found to have contacted potential witnesses in his criminal case.

He has also been temporarily banned from using VPNs on Feb. 14, after the Justice Department discovered he had used a VPN on two different occasions — in order to watch sports coverage. This ban will be further discussed during a Feb. 16 hearing.

Many from the crypto community were disgusted by the initial conditions of Bankman-Fried’s bail, which required him to wear an ankle bracelet but afforded him full computer and internet access from his parents luxurious home in sunny California.

SBF will be spending Christmas at home with his parents playing video games rather than locked up in a cell. What kind of justice is that?
— Layah Heilpern (@LayahHeilpern) December 23, 2022

SEC and CFTC Lawsuits Against Former FTX CEO Paused Until Criminal Proceedings Conclude

February 14, 2023 Bitcoin.com

US Feds put together ‘FTX task force’ to trace stolen user funds

January 4, 2023 Coin Telegraph

Coin Telegraph

United States Attorney Damian Williams said the office is working “around the clock” to respond to the implosion of FTX.

The United States Attorney’s Office for the Southern District of New York (SDNY) has formed the FTX Task Force to “trace and recover” missing customer funds, as well as handle investigations and prosecutions related to the exchange’s collapse.

The announcement came in a statement from U.S. Attorney Damian Williams, who is the federal prosecutor in the FTX case involving founder Sam Bankman-Fried.

Charges from the Manhattan attorney’s office against Bankman-Fried include wire and securities fraud, conspiracy to commit wire and securities fraud, money laundering and violation of campaign finance laws.

“The Southern District of New York is working around the clock to respond to the implosion of FTX,” said Williams in the statement, adding:

“It’s an all-hands-on-deck-moment.”

“We are launching the SDNY FTX Task Force to ensure that this urgent work continues, powered by all of SDNY’s resources and expertise until justice is done.”

According to the SDNY, the task force’s team consists of senior prosecutors from its securities and commodities fraud, public corruption, money laundering and transnational crime enterprise units — which will be responsible for the “investigation and prosecution of matters related to the FTX collapse.”

Meanwhile, its “asset forfeiture and cyber capabilities” will be used to “trace and recover” the billions of dollars worth of missing customer funds, it added.

A similar effort had already been underway by FTX’s new management, which hired financial advisory company AlixPartners in December to conduct “asset-tracing” for FTX’s missing digital assets.

The Manhattan U.S. Attorney’s Office reportedly first began its probe of FTX’s collapse shortly after the firm filed for bankruptcy on Nov. 11.

According to its website, the U.S. Attorney's Office for the Southern District of New York is known for prosecuting cases involving the violation of federal laws and investigates a broad array of criminal conduct “even when the conduct arises in distant places.”

FTX and key executives including Bankman-Fried, co-founder Gary Wang and Alameda Research former CEO Caroline Ellison had since September 2021 been operating out of the Bahamas, where many of the alleged crimes are believed to have been perpetrated.

On Jan. 3, Bankman-Fried pleaded “not guilty” to all eight criminal charges related to FTX’s implosion — which carries a total of 115 years of prison for the FTX founder if he is convicted.

Last month, Wang and Ellison pleaded guilty to federal fraud charges relating to their role in the collapse of the FTX exchange.