OneCoin Ponzi scammers in Germany acquitted
In a bizarre ruling, two OneCoin Ponzi scammers in Germany have been acquitted.
As told by SBS Legal, the law firm representing the scammers, the case against the scammers confirmed that those recruited ‘were or are only interested in the cryptocurrency OneCoin.’
This is an important point, because it cemented OneCoin being a pyramid scheme under German law.
From their own press-release it sounds as if SBS Legal argued OneCoin wasn’t a pyramid scheme. Subsequently the law firm sought an acquittal for their clients.
Prosecutors pushed for six to eight months prison time.
Upon consideration of filed evidence, the court acquitted the defendants.
SBS Legal claim a determining factor was their commissioned 2015 legal opinion. We covered the leaked document earlier this year.
In a nutshell, SBS Legal (then Schulenberg and Schenk) rubber-stamped OneCoin’s Ponzi business model.
Just a note on the name-change, in response to our article Stephan Schulenberg got in touch to advise that Schulenberg and Schenk and SBS Legal were operating as two different entities.
This despite SBS Legal and Schulenberg and Schenk having the same attorneys and operating out of the same corporate address.
SBS Legal’s June 10th article refers to the Schulenberg and Schenk’s legal opinion as “prepared by our law firm”, so it seems they’ve dropped that facade.
Getting back to the acquittal, SBS Legal states;
The court further stated that the two accused were also acquitted in the event that the legal assessment indicated that there was a pyramid scheme.
Because both (defendants) had read our law firm’s report before starting their work for Onecoin sales, which resulted in a so-called inevitable mistake in accordance with. Section 17 of the Criminal Code , which leads to impunity.
Section 17 of the German Criminal Code states:
If the perpetrator lacks the insight to do wrong when committing the act, he acts without guilt if he could not avoid this mistake.
If the perpetrator was able to avoid the error, the punishment can bereduced inaccordance with Section 49 (1).
So back in 2015 Schulenberg and Schenk published a legal opinion claiming OneCoin’s Ponzi scheme was legitimate.
The defendants allegedly read the report and based on the representation OneCoin was legitimate, proceeded to scam people through the Ponzi scheme.
Five years later the same law firm, as SBS Legal, defends the scammers on the basis they aren’t liable for criminal conduct because they relied on a report prepared by themselves.
And despite Schulenberg and Schenk’s legal opinion being deeply flawed, a German court bought it.
I think this might be the biggest /facepalm of the OneCoin saga I’ve seen yet.
Other reasons cited by SBS Legal for the acquittal are
the remuneration system as a whole is designed in such a way that the progressive elements vis-à-vis those of product sales would clearly recede.
In addition, there would be real demand for the cryptocurrency OneCoin, which is completely independent of the possibility of mutating from a customer to a sales partner. This was also shown by the taking of evidence.
Demand for OneCoin outside of the Ponzi scheme? Yeah there is none.
This is clearly demonstrable by OneCoin collapsing after ROI withdrawals were blocked from January 2017.
As for “product sales” within OneCoin, there weren’t any. Affiliates signed up, invested in OneCoin Ponzi points and got paid to recruit others who did the same.
That’s literally all there was to the business with respect to the MLM opportunity. A bunch of pseudo-compliance garbage was added, but none of it negated or justified the Ponzi scheme.
What’s even more bizarre about the court’s ruling, is German prosecutors had access to copious amounts of evidence presented in parallel US proceedings.
To date there have been three OneCoin related guilty pleas and a conviction in the US, supported by thousands of pages of evidence.
Within Germany itself, BaFin banned OneCoin nationally for committing securities fraud in 2017.
At the time BaFin cited OneCoin as “one of the most dangerous money games of recent years”.
How did German prosecutors bungle this case up so badly?
I don’t know if there’s an appeals process for the ruling but if so hopefully one is filed.
Meanwhile SBS Legal are celebrating their efforts in assisting OneCoin scammers evade the law.
Handling the case were SBS Legal attorneys Stephan R. Schulenberg and Moritz Braun.
In addition to rubber-stamping the Ponzi scheme through a commissioned legal opinion, SBS Legal has ties to OneCoin through founder Ruja Ignatova.
Update 13th October 2021 – This article originally included a link to SBS Legal’s website where the firm celebrated its role “in assisting OneCoin scammers (to) evade the law”.
As at the time of this update, SBS Legal has pulled that article. As such I’ve had to disable the previously accessible link.
Just a footnote on the case, this doesn’t appear to the Bielefeld one.
SBS Law’s press-release states the decision was made by the Augsburg District Court.
Augsburg is in Bavaria. The only Bavaria related OneCoin lawsuit I’m aware of is a victim suing his upline and winning.
SBS Legal mentions two defendants so this is a different case. I don’t have any further details on the specifics.
I suppose in light of OneCoin’s legal numerous legal losses everywhere else in the world, as a disgraced law firm you take what you can.
Let’s see if I have this straight…
SBS Law prepares a bullshit report saying a Ponzi/pyramid scheme isn’t a Ponzi/pyramid scheme, despite the fact that it couldn’t be much clearer that it is a Ponzi/pryamid scheme.
The two defendants say, “Hey, we didn’t know we were scamming people, because SBS Law said it was OK. How were we to know their report was bullshit?”
SBS represents the two defendants and say, “Hey, they didn’t know they were scamming people, because they believed our bullshit report.”
Augsburg District Court: “Yeah, makes sense. Case dismissed.”
Face, meet palm.
Gerald Nehra should move to Bavaria. They’ll love him there.
Well, this certainly makes some of the conspiracy theories on just how far up the political-connection ladder the Ignatov family’s influences go not seem so silly.
I mean, even Mark Scott, who you’d think would be one of the first names that pop up on a simple “Onecoin” Google search, has German citizenship. Were the Prosecutors using autistic mimes to argue their case??
Upon further review, it is EXTREMELY interesting to note the following:
– A bank suspected money laundering and filed the case against the two Defendants
– The Defendants were considered “naive investors”
– The Defendants relied on SBS earlier Legal documents (under Schulenburg and Schenk) claiming the ponzi wasn’t a ponzi
– The Defendants Down-Lines WERE ALL HAPPY(!!) and supportive cult disciples, also
– Neither the Defendants nor their downlines joined to “recruit” others (or the “Education”), BUT TO INVEST IN THE ‘COINS’, THEMSELVES!
Essentially, THEY GOT OFF BECAUSE THEY “INVESTED!!!” – nevermind the fact that the Judge was a totally uninformed dipshit, given the BaFIN decision, US. Trials, China convictions, Bielfeld continued invstigations, etc., etc., etc.
But, the fact that this proves in court that no one was interested in the whole “education” charade and that’s how they got off makes it quit the interesting outcome!
2nd Source: blog.geopolitical.biz/2020/06/12/onecoin-ein-schneeball-ist-geschmolzen/
I’m very wary about taking what SBS Legal says about what happened in this case as an accurate reflection of facts.
The problem is: I can’t find any independent reporting, nor the ruling itself. I can find just one press article about the case, in the Augsburg local newspaper, but that was only about the start of the case, and is behind a paywall.
All other ‘reports’ online are just repeats or rehashings of the article SBS Legal themselves put out. So I’m reduced to trying to boil that down to just the bare facts, the bits they wouldn’t dare lie about, without any of their spin.
In particular, I am strongly inclined to disbelieve the important role they claim the advertising material they wrote for OC, that so-called ‘legal opinion’ of theirs, played in the decision.
They also link that directly to § 17 StGB (to use the correct German citation). That doesn’t make any sense to me. That article only applies when people are found to have committed the act they were accused of, but without knowing it was criminal.
Since the court found that they hadn’t committed any criminal act at all, how would that article come into play?
Now to why they were found not guilty, as far as I can perceive it through the SBS spin (and the ethics of SBS Legal themselves of course weren’t at issue in the case).
The two were charged under § 16 Abs. 2 UWG. The UWG (Gesetz gegen den unlauteren Wettbewerb) is largely Germany’s implementation of the EU Unfair Commercial Practices Directive.
That paragraph simply outlaws pyramid sales schemes. Which are defined in such a basic way that, IMO, if German prosecutors and courts wanted to, they could use it to ban all MLM companies outright.
It doesn’t say anything at all about whether the product sold in such a way is legal or not, or whether or not the scheme could actually make money for all the people involved, it outlaws the method of selling. The court apparently stressed that last point in its ruling.
The one defining characteristic is that such a scheme entails sellers recruiting buyers with the understanding that they will in turn become sellers, who recruit more buyers, on and on, all with the promise that they will profit from this.
That the seller may be getting a commission for every new buyer they bring in, is irrelevant.
The court found that this wasn’t the case here. These two men sold OC purely as an investment, and the buyers weren’t interested at all in becoming sellers themselves. There was testimony that the fact that there was an MLM side to the company as well wasn’t even mentioned in the sales pitch.
Essentially, the court found that these two men were acting as salesmen, selling investments in OC, and working on commission. Which definitely isn’t what § 16 UWG outlaws.
I have to say I cannot help but agree with the court ruling. I’m not a lawyer, but if I was on a jury, was told the facts as far as we can determine them from the SBS account, and read the definition of pyramid selling in § 16 UWG, I’d have voted for acquittal (and been very pissed off at the prosecutors for having to do so).
In this case, the prosecutors simply picked the wrong crime. You can’t just say: “Ah well, the product they were selling was clearly a fraud. So let’s just convict them of a different crime.”
Generally, the MO described in this case fits with what my impression of OC has always been: that the vast majority of members were only interested in the Ponzi side of the scheme, not the MLM sales pyramid (even though that’s the only bit anyone except the Ignatov crime family and their direct associates ever made any money from).
People bought into OC with euro signs in their eyes, thinking they’d all become filthy rich from selling their coins in a few years time.
Not because they wanted to start selling OC themselves, let alone thought it would one day be a real currency. I’ve seen quite a few who clearly didn’t even understand that what they’d bought was supposedly a currency.
They talked in terms showing they thought they’d acquired shares or bonds of some kind, which they could sell on an exchange for vast profits in the quite near future.
Apparently there is. According to Wikipedia prosecutors in Germany can ask for a do-over.
(In the UK and US, by contrast, this wouldn’t be the case under double jeopardy rules. The UK allows double jeopardy for serious crimes but Ponzi fraud isn’t serious enough.)
I strongly doubt they will bother though. If German prosecutors cared enough to appeal they’d have cared enough to pay more attention to the original case.
Remember this is fundamentally a trivial case of little fleas scamming each other with a maximum sentence of a few months.
The vast majority of cases like this – and there are hundreds of thousands across the globe in the case of OneCoin – never go near a courtroom.
The maximum custodial sentence under § 16 Abs. 2 UWG is two years, I don’t think most people would consider that trivial.
But an appeal does seem very unlikely, because the verdict is based on something so factually basic: the defendants simply, demonstrably, didn’t do what that paragraph describes.
Which actually makes perfect sense from a scammer’s point of view.
One of the many inherent flaws of MLM is that every time you recruit someone, you’re recruiting another competitor. Why would you want to do that if you can easily avoid it?
Never forget that OC was fundamentally a Ponzi, with an MLM attached only to have a cheap sales/advertising force. Ruja made her money from selling the ‘educational packages’, in that sense they weren’t a pretend product (what in German is call an Alibiprodukt) on which no profit needs to be made, as is the case with most MLMs.
The product was also highly desirable, because greed always sells. OC could have functioned as a pure Ponzi investment scam, without any MLM sales mechanism – which is how the defendants in this case effectively were selling it.
That would actually have made it quite similar to the first-ever Ponzi scheme: that of Adèle Spitzeder and her Spitzedersche Privatbank (a.k.a. Dachauer Bank), which she ran in Bavaria from 1869 to 1872. A charismatic female financial genius, who appeared out of nowhere with a brilliant new system, through which ordinary people could make huge profits in a very short time.
Quite unlike those nasty, traditional banks, which were only there to help rich people get richer. That is still thought to be the biggest-ever Ponzi scheme, in terms of what percentage of all money in the banking system in a country was put in a Ponzi scheme.
It was so unprecented that the authorities had a hard time finding something to charge her with. In the end, they could only convict her of failing to register as a merchant, and not keeping adequate accounts.
If she’s told any lies about how she made the money to pay her exorbitant ROI, they could have done her for fraud, but she’d always been completely honest about her business model: she paid back earlier lenders with money borrowed from later ones. The legal definition of fraud required deception, and there hadn’t been any.
Two years in a white collar prison with time off for good behaviour is trivial. And prosecutors were going for 6-8 months.
It may not seem trivial to you but you don’t steal money for a living.
If the scammers managed to salt away even a fraction of their ill-gotten gains, they’ll almost certainly have secured an immensely attractive salary for sewing mailbags.
Prison for white collar criminals in Western Europe isn’t punishment, it’s a compulsory networking opportunity.
I am speaking from a UK perspective but I’ve seen nothing to suggest Germany is significantly more draconian.
The Albanian Ponzis of the 90s must have given her a run for her money, but perhaps the fact there were so many of them competing with each other, whereas Spitzeder was a lone pioneer, secures her claim to the “biggest Ponzi scheme by % of national wealth” crown.
The fact that Ponzi schemes are called Ponzi schemes and not Spitzeder or Howe schemes is one of the most blatant examples of the erasure of women from history.
Martin Mayer made a zoom call with the scam promoters who were acquitted in Germany. Someone who understand german could make a short summary:
youtu.be/YVZGI1ZacDo
youtu.be/0O48BI4me5c
The crazy charlatan Martin Mayer is now collecting money for these 2 german OneCoin scam promoters, Werner Müller and Peter Schönberger. Idiots have already donated over 3000 euros it seems.
mama-on-tour.com/spenden/
@WhistleBlowerFin
I am currently reading:
share-your-photo.com/32bd34df1a
Now the crazy charlatan Martin Mayer is hiding behind a fake address in Germany, although he lives in Liechtenstein and cheats there.
share-your-photo.com/f1a89bdc0a
He has removed all content relating to the OneCoin scam on his website continuum.li. Has he also changed his place of residence? Here is the old legal notice with the address in Vaduz in Liechtenstein:
share-your-photo.com/b7e1c45e16
The current imprint names Schaan in Liechtenstein as the place of residence.
share-your-photo.com/0ac859dc8f
@WhistleBlowerFin
I will start with Peter Schönberger from Augsburg, who calls himself “financial advisor” and “insurance broker”.
share-your-photo.com/139b9b0aaf
He can be seen on this photo.
share-your-photo.com/d60a1cc698
His profile on XING:
xing.com/profile/Peter_Schoenberger5/cv
At Kindl & Schönberger GmbH he calls himself the managing director and owner. Unfortunately, no specific data is currently available in the German commercial register. Special dates are now chargeable. In addition, the commercial register data is now copy-protected so that I cannot upload a screenshot.
A bad joke is his website kindl-schoenberger.de, which claims:
No, that is not correct. That’s a lie! On December 2, 2019, the same text appeared on the website. Who needs 11 months to update their website?
web.archive.org/web/20191202065130/http://www.kindl-schoenberger.de/
As is usual with fraudsters, Peter Schönberger does not want the content of his website to be read by search engines. For this reason the website only exists as a graphic! Here is a copy of the contact details:
share-your-photo.com/0c2ed7b035
In Germany, many self-appointed “financial advisors” and insurance salespeople have offered the OneCoin as a profitable investment. Spontaneously I remember Carsten Link, who advertises like this:
share-your-photo.com/cbb30e4cf9
An offer from Carsten Link on DealShaker:
share-your-photo.com/96f7d793ac
Does the OneCoin fraudster Carsten Link sell Ruja’s worthless educational packages on his website versicherungsbuero-link.de? This message is absolutely unusual for an ordinary “insurance office”!
Addition to comment #9
Yesterday, the videos mentioned by WhistleBlowerFin were still publicly available:
Since today both videos are “private”. An example:
share-your-photo.com/9f5506c6ad
What happened?
The German journalist Martin Himmelheber published the following article yesterday:
nrwz.de/schramberg/onecoin-verfahren-in-augsburg-eingestellt-keine-schuld/356008
I then informed Martin Himmelheber that these two videos by Martin Mayer with the accused Werner Müller and Peter Schönberger existed. When Martin Himmelheber wanted to watch these two videos again today, they were “private”.
In my comment #12 I only dealt with Peter Schönberger from Augsburg. Werner Müller is a very common name in Germany and I had a hard time finding the right one.
PS: Martin Himmelheber received a call from a well-known law firm in Hamburg today. The lawyer disagrees with a wording in the article. 😀
Why is a lawyer from Hamburg reading an article in a regional newspaper from Baden-Württemberg? I think I know the answer…
Addition to comment #12
I have now also identified Werner Müller from Augsburg.
I was able to take a screenshot of video No. 787 in the web archive. Above left Peter Schönberger, next to him Martin Mayer and below Werner Müller:
share-your-photo.com/5ea9477556
Because Werner Müller is difficult to see, here is a better photo of him:
share-your-photo.com/e30084b318
The titles of the two videos were:
web.archive.org/web/20210918011635/https://www.mama-on-tour.com/spenden/
Werner Müller owns a PC service in Augsburg with this imprint:
share-your-photo.com/b33d637ba6
pc-service-augsburg.com
The VAT ID mentioned there is 100% wrong! I will inform the responsible tax office about it.
PS: Peter Schönberger’s website kindl-schoenberger.de no longer exists:
share-your-photo.com/4522853e58
Partial quote from the interview. Peter Schönberger from Augsburg confirmed the following:
web.archive.org/web/20210918011635/https://www.mama-on-tour.com/spenden/
Partial quote from the interview. Werner Müller from Augsburg confirmed the following:
web.archive.org/web/20210918011635/https://www.mama-on-tour.com/spenden/
Both sellers of Ruja’s worthless education packages describe the events of January 2017 very dramatically.
I think they wanted to arouse sympathy from the readers and listeners so that as many donations as possible could be collected. Martin Mayer from Liechtenstein initiated the fundraising campaign.
The excursion into the world of cryptocurrencies had a fatal end for both of them. Both are incompetent businessmen if they don’t know that Germany has the law against unfair competition (UWG). Specifically, §16 applies here:
share-your-photo.com/720ad1d705
PS: I asked Werner Müller why the two videos with the interview are no longer publicly accessible. His profane answer was:
share-your-photo.com/8369157bb2
I assume that Werner Müller speaks of his own “truth”, which is very subjective. I’d like to know who “someone” is…
Sounds good to me, Werner. I say go for it!
Bit depressing that on the extremely rare occasion German authorities go after Ponzi scammers, they fail anyway.
What is it with Europe and turning a blind eye to white collar crime?
The Italian mafia no longer launders their money in Italy, but in Germany. Of course, this also applies to mafia structures in other countries.
Two videos from ZDF (Second German Television) explain what is possible in Germany:
youtube.com/watch?v=B2gkSubQ4zQ
youtube.com/watch?v=Zg-HXAb7MCo
share-your-photo.com/bacfd20642
Video from NDR (North German Broadcasting):
youtube.com/watch?v=HLuGW5nIsY8
The German magazine “DER SPIEGEL” is reporting in today’s newsletter that the German Finance Minister Christian Lindner wants to set up a new authority to combat money laundering.
share-your-photo.com/5d52f0f65d
Without link, only readable for subscribers.
Hey Melanie, ist this the German version of sheep trys to herd wolves?
@catweazle
I agree with you, but Germany is a member of the Financial Action Task Force (FATF). This institution gives Germany a bad report. Now the finance minister had to react.
cmshs-bloggt.de/banking-finance/erste-ergebnisse-der-fatf-deutschlandpruefung-liegen-vor/
Addition to comment #20
A detailed article on the same topic here:
welt.de/politik/deutschland/article240625803/Kampf-gegen-Geldwaesche-Lindner-plant-ein-Bundesfinanzkriminalamt.html
Oz wrote:
In addition to sbs-legal.de, the notorious lawyers Schulenberg & Schenk from Hamburg also operate a second website on which they report on their dubious “successes”: mlmrecht.de (mlmlaw)
The Schulenberg & Schenk article is still available on their second website in the web archive.
web.archive.org/web/20201022010335/http://mlmrecht.de/2020/06/10/sbs-legal-erwirkt-freispruch-fuer-onecoin-vertrieb/
The notorious law firm Schulenberg & Schenk from Hamburg has also defended the German serial fraudster Jörg Wittke, who has been accused of fraud and others in connection with the BitClub Network.
mlmrecht.de/2021/02/18/jorg-wittke-gewinnt-gegen-thomas-kaysh-vor-dem-lg-hamburg/