The United States Government has submitted a letter requesting a sentence of time-served for the leader of OneCoin, Konstantin Ignatov.
The letter was filed with the New York Southern District Court on February 26, 2024.
The Government notes that the defendant committed serious crimes and lied on the witness stand when he testified at the trial of United States v. Mark Scott as a cooperating witness for the Government. However, considering all of the Section 3553(a) factors, and because the defendant has already served almost three years in prison prior to sentencing, the Government agrees with the recommendation of the Probation Department and the request of the defendant that a sentence of time-served is appropriate.
Ignatov is the younger brother of Ruja, OneCoin’s co-founder and top leader until her disappearance from public view, in or about October 2017. In or around June 2016, Ignatov began working for OneCoin as Ruja’s personal assistant. In that role, Ignatov was responsible for coordinating travel and meetings for Ruja. Ignatov was unaware that OneCoin was a fraudulent scheme when he began working at OneCoin.
Beginning in or about October 2017, after Ruja disappeared, Ignatov quickly rose to the level of a high-level executive and spokesperson for OneCoin. Although Ignatov did not have an official title, he ultimately became the de facto leader for OneCoin, primarily because he was the sibling of Ruja. Ignatov also appeared at promotional events in Thailand, Singapore, Colombia, Argentina, Brazil, Paraguay, Bulgaria, France, and Spain. As a leader of OneCoin, Ignatov made fraudulent representations to investors about OneCoin’s structure, value, usability, and future public offering.
Despite gaining a deeper understanding of the OneCoin fraud scheme, Ignatov continued to keep the scheme going. In order to keep the OneCoin fraud scheme going, Ignatov made numerous misrepresentations to the public, including that OneCoin had a blockchain that it was “easy to use, easy to mine;” that Ignatov was in regular communication with Ruja; and that a purported merchant platform called Dealshaker was up and running with 50,000 merchants. These representations, among others, were false, and were intended to calm investors down after Ruja’s disappearance, and to get them to further invest in OneCoin.
Ignatov began proffering with the Government on or about July 29, 2019, approximately five months after he was charged by Complaint. Ignatov met with the Government for nine proffer sessions before entering a guilty plea pursuant to a cooperation agreement. Ignatov continued to meet with the Government after he pled guilty, in primary part so that the Government could prepare Ignatov to testify at the November 2019 trial against coconspirator Mark Scott.
Ignatov testified at that trial over the course of three days. Ignatov provided testimony on the following topics, among other things: (1) background testimony concerning OneCoin, the products offered by OneCoin, and the multilevel marketing structure used by OneCoin; (2) testimony concerning the fraudulent nature of OneCoin; and (3) testimony concerning OneCoin’s issues with banking, and a high-level explanation of how OneCoin solved those issues through the use of a network of money launderers, including Mark Scott.
The defendant was arrested on a complaint on March 6, 2019, and ordered detained. On May 28, 2019, he waived indictment and an information charging him with one count of conspiracy to commit wire fraud was entered.
On October 4, 2019, he waived indictment again, and, pursuant to a cooperation agreement, pleaded to an information charging him with: (1) one count of conspiracy to commit wire fraud; (2) one count of wire fraud; (3) one count of conspiracy to commit money laundering; and (4) one count of conspiracy to commit bank fraud. All four counts pertained to the OneCoin scheme.
In November 2019, Ignatov testified as a cooperator at the Scott trial.
On January 29, 2021, Ignatov was bailed. On November 12, 2021, after the Government learned of Ignatov’s perjury at the Scott trial, the defendant was remanded. He was bailed again on November 14, 2022. In total, the defendant has spent approximately 34 months in custody on the charges in this case.
Ignatov is the fifth defendant to be sentenced in the case:
- On October 19, 2021, David Pike was sentenced to a term of probation of two years. Pike’s Guidelines range was 6 to 12 months.
- On February 16, 2023, Gilbert Armenta was sentenced to a term of imprisonment of 60 months. Armenta’s Guidelines range was 1,200 months. Armenta also entered into a cooperation agreement with the Government, but he committed additional crimes after entering into his cooperation agreement and the Government did not provide him with a Section 5K1.1 letter.
- On September 12, 2023, Karl Sebastian Greenwood, a cofounder of the OneCoin scheme, was sentenced to a term of imprisonment of 240 months. Greenwood’s Guidelines range was 720 months.
- On January 25, 2024, Mark Scott was sentenced to a term of imprisonment of 120 months. Scott’s Guidelines range was 600 months.
Probation recommends a sentence of time served, and the defendant requested a sentence of time served. The defendant is a citizen of Bulgaria who does not have status in the United States.