Mark Scott likely to have bank employees testify against him
The DOJ has requested permission to present several witnesses at Mark S. Scott’s trial via CCTV.
Attached to the filing is a special agent declaration, which reveals insight into evidence the DOJ will present against Scott.
As per the DOJ’s case, Scott set up a series of private equity funds to launder OneCoin investor funds through.
The DOJ refers to these shell companies as the “Fenero Funds”.
$300 million of the estimated $400 million Mark Scott laundered for OneCoin, was done so through the Bank of Ireland (BOI).
The DOJ alleges Scott obtain BOI “Fenero Ireland” accounts through “misrepresentations”, ‘in order to disguise the fact that the funds were derived from the OneCoin scheme‘.
As part of their investigation into OneCoin, the DOJ has been collecting evidence from the BOI for two and a half years.
In addition to documentary evidence collected, the DOJ is planning on producing testimony from four BOI employees.
These include two former members of BOI’s Foreign Direct Investment team, the head of BOI’s Anti-Money Laundering team, and a then Executive Vice President and Relationship Director (two positions, one individual).
As per an attached special agent declaration, specific misrepresentations made by Scott to the four employees include:
- that Scott was “the 100% ultimate beneficial owner” of Fenero Ireland
- funds transferred through the set up BOI accounts would be “financial services companies, real estate, and startup companies, through investment vehicles formed in Ireland”;
- Scott’s clients were “wealthy European families” he “had known for many years”;
- investment amounts would be secured at a future date;
- Scott intended to set up a Fenero Funds physical office in Ireland;
- said Irish Fenero Funds office would ‘employ 100 employees within 5 years, but would have a physical presence and 10 employees to manage the company in Ireland initially‘
- that as per the BOI’s KYC due-diligence program, Scott, as the 100% legal owner of Fenero Ireland, was required to inform BOI of any investor contributing over 10% into his BOI accounts
- that in contrary to representations made regarding KYC, “Scott did not formally notify BOI of any new investors” when funds were transferred to Scott’s BOI accounts
In one particular instance, a transaction to a UAE bank account held by Phoenix Fund Investments raised suspicion and was flagged.
When queried about it by BOI staff, instead of explaining the nature of the transaction and details of Phoenix Funds Investments , Scott ‘requested that the transfer be retracted and the money returned to the BOI Fenero Account‘.
BOI staff also allege Scott
resisted providing any information about the Fenero Funds investors whose money was sent to the BOI Fenero Accounts, and in fact, never did so.
Perhaps central to the case, Scott not once mentioned Ruja Ignatova, OneCoin or any OneCoin related entities or individuals to BOI staff.
And remember, that’s despite 100% of the funds Scott laundered through BOI being OneCoin investor funds.
Possibly fearing their own arrest if they traveled outside of Ireland, the four BOI employees rejected the DOJ’s offer to fly them out and cover all travel expenses – even if safe passage letters were arranged.
Another possibility for the refusal is fear of retaliation from OneCoin or OneCoin related entities. OneCoin’s links to organized crime outfits in Europe are on the public record.
The BOI employees have agreed to give testimony at Scott’s trial, but only if they can do so from Ireland.
This is a right reserved by the BOI witnesses, as per the Mutual Legal Assistance Treaty between Ireland and the US.
If permission to provide live CCTV testimony is denied by the court, sworn depositions have been put forward as an alternative.
A decision on the DOJ’s motion is pending. Mark Scott is scheduled to face trial on November 4th.
In a footnote on page 2 of the Lozano declaration, it’s indicated that once the motion to allow CCTV testimony is granted, there is more to come:
Very sensible, even if they are entirely blameless. (Or only guilty of incompetence, insufficient to breach anti money laundering law.)
Flying to the US in that position is putting your head in a noose and trusting the DOJ not to pull the lever.
If the DOJ decides to arrest you, you are screwed. All the evidence in your defence is back home in Ireland, and nobody will come to the US to testify in your defence in case the same happens to them. (Cf the NatWest Three.)
Not everyone’s as dumb as Ignatov and Scott.
If they have any witnesses from the middle east, #RIP defense.
I was under the impression safe passage letter = immunity from US authorities.
Not everyone’s as dumb as Ignatov and Scott.
Or as dumb as me. I can recommend thoroughly forty minutes of questioning by Federal Agents as a perfect wake-up call
@Duncan: can you briefly summarize what kind of questions they asked?
I’m pretty sure that you have valuable info for the US DOJ.
Do you think that you’re safe now, or is there still a risk that you will be summoned to testify?
This is how it happened. The flight from LAX was delayed, seriously delayed. Nobody would say why.
K and I get called to the desk. We thought we were being boarded first. We went through the gate and three guys sprang on K, two of them swing him around and a third cuffed him. He had a look of calm surprise.
He vanished with the three guys behind a door. I got taken to a room that looked just like everything in any police movie. I got shown badges, one was IRS, the other FBI.
First question was “where is Ruja?”; then “how is the coin priced?”. I told them the BS story I’d been told. “Do you know there is no BC?”, I argued this one like an idiot. Had I seen the “mining centres”, had I seen a schematic of the platform end-to end?
When they picked up that London operated on its own and I was DS exclusively, they became more relaxed.
Then they started asking about various individuals. There is nothing they don’t know. This is only going to get bigger.
They asked if I had any objection (like I could say no!), to them taking a copy of my passport. I have two passports, the FBI guy says to me that I don’t sound Irish and where is my other passport – that’s how sharp they are.
I give them my South African to take a copy of. I get a doc to appear in the SDNY before a Grand Jury (@ Oz: like to publish it?) at a time that was physically impossible as it was in a few hours. I guess I can’t go back to the US.
Two days later I’m back in Sofia. I ask the same questions I got asked. They accuse me of arranging K’s arrest, we crack the system after the Japanese event, we tell what we found, I’m the ‘devil’, etc.
Will I testify? Of course. It’s not a cop out but there are people who know a lot more than me.
My staff and I cooperate with the UK authorities. They have a hot line to the DoJ and the idiots celebrating the City of London Police deferring to the US DoJ really do not understand the implications.
Glad to hear it finally. Can you share what individuals? Are they only focusing on Ruja/Sofia or are they also looking at all the top leader scammers in various countries?
What kind of implications? It seemed like the police just gave up. Are they instead just helping the US? Any chance of compensation for UK victims?
I have been wondering if Sebastian Greenwood will be a witness for the DOJ at his trial.
Duncan, thanks for sharing, very interesting.
The last paragraph might be reassuring for disappointed OneCoin victims in the UK.
I’m unfamiliar with procedure but does it name who the proceedings pertain to?
@ Mohajir: the people they wanted to know about mainly were the early leaders. I couldn’t help as I’ve never met them. They wanted to know who did what function in the company. The people still in are way too in to ever be out.
The UK and US have a very easy and fast extradition process. It isn’t ideal and most of the people will get away with what they’ve done. OL has collapsed in the UK.
@ Lynn: I have no doubt Greenwood will do what he can to help himself.
@ OCSS: I hope so. In the minoroty communities, the ‘leaders’ are probably more worried about facing their communities.
@ Oz. My name is named on the document, although not my full name. I was to present myself and be questioned and a Grand Jury would decide if I was worth prosecuting.
Safe passage letter = piece of paper. I wouldn’t trust any foreign authority further than I could throw them.
(I don’t trust my own either but you’re in a slightly better position as a citizen than a foreigner.)
Experts on US law may disagree on how safe you are from arrest with a letter of safe passage. What is undisputable is that it is even safer not to pass into the USA in the first place.
And there is no reason for them to enter the US (other than to be arrested, then shaken down) as they can testify via video link or sworn affidavit.
Better for the planet as well.
Pre-trial schedule published by Government:
Moreover, and probably more interesting, new Supersiding Indictment filed (not on Courtlistener yet).
Great, second Count added: Conspiracy to Commit Bank Fraud.
There’s not much to Scott’s objection.
He makes the argument that bank employees that were lied to are not important for a money laundering case. And that CCTV is only for “mobster” and “terrorist” cases.
As an alternative to depositions or CCTV testimony, Scott’s attorneys also point out that that the lies he told BOI employees were purportedly repeated in emails sent to the bank.
Can’t see a decision taking too long seeing as the trial now only a few weeks away. Will wait for a decision before publishing.
I don’t see anything on Courtlistener about the court decisions that were supposes to be made yesterday, but there is a Government’s response to Scott’s opposition of the CCTV motion.
There is new small drama with the case: New “complications” with BOI employees testifying via CCTV suddenly appeared:
It is not stated what made them to change their mind and to suddenly demand “compulsory process”. It’s an unpleasant surprise for the Government, but perhaps nothing that couldn’t be promptly sorted out:
Another strange new development it the case is that Government requested Scott to put all exhibits of his response filing under seal (and it was endorsed by the court).
They still can be accessed via Courtlistener, though.
Could these two be somehow connected? Or did the BOI employees find BBC podcast and got scared after realizing what kind of monster are dealing with? Or is it just a dry formality, that was deemed correct after the case got publicity?
From memory bank employees helped with the TelexFree Ponzi case. If you were just doing your job and followed standard procedure, there’s no need to worry about testifying.
Nobody at the banks TelexFree used got in trouble, except James Merrill’s brother. And then only because he was in a management position and pulled strings to help his brother launder funds.
It sure sounds like something is up with the BOI.