“Scott Group Defendants” dismissed from OneCoin class-action
OneCoin money launderers Mark Scott, David Pike, alleged money launderer Nicole Janine Huesmann and the Bank of New York Mellon, have each been dismissed as defendants in the OneCoin class-action.
In their second amended complaint, the class-action Plaintiffs alleged Scott (right), Pike and Huesmann, referred to as the “Scott Group Defendants”,
assisting (OneCoin’s) fraud by laundering millions of dollars of fraudulently obtained funds.
The Bank of New York Mellon (BNYM) stands accused of ‘allegedly facilitating the Scott Group Defendants’ money laundering’.
In response to being named class-action defendants, both The Scott Group Defendants and the Bank of New York Mellon filed motions to dismiss.
The motions to dismiss filed by the Scott Group Defendants were upheld because the court found
Plaintiffs have failed to demonstrate that it has personal jurisdiction over any of the Scott Group Defendants.
The OneCoin class-action was filed in New York. All three Scott Group Defendants are domiciled in Florida.
The court upheld that the Scott Group Defendants had no jurisdictional ties to New York.
Because the class-action Plaintiffs failed to clear the jurisdiction bar, the court didn’t evaluate whether the allegations against the Scott Group Defendants ‘adequately allege(d) claims for relief’.
That is to say the Scott Group Defendants were dismissed on a jurisdictional technicality. The conduct allegations in the complaint were not a deciding factor.
In the Bank of New York Mellon’s motion to dismiss, the bank put forth the class-action Plaintiffs had
latched onto (and) misleadingly presented — information revealed during related criminal cases.
The BNYM asserts that rather than be
painted … as a perpetrator of the (OneCoin) money laundering scheme, … it should be seen as a victim.
The BNYM puts forth it ‘was deceived by fraudsters who intentionally obfuscated transactions to avoid detection.’
Ironically, “the fraudsters” refers to, at least in part, the Scott Group Defendants.
From a legal perspective, the BNYM argued
Plaintiffs’ allegations are not pled with the requisite particularity required by Rule 9(b).
For reference, Rule 9(b) of the Federal Rule of Civil Procedure states:
In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.
The BNYM further argued that even if the Rule 9(b) hurdle was overcome, that the Plaintiffs hadn’t proved
BNYM had actual knowledge of the fraud or that BNYM provided substantial assistance to the fraudsters.
The court didn’t address Rule 9(b), on the grounds
none of the facts alleged in Plaintiffs’ complaint, considered individually or collectively, raises a strong inference of actual knowledge.
Plaintiffs have not pled that BNYM had the requisite knowledge of the fraud or that BNYM provided substantial assistance to aid in the commission of the fraudulent OneCoin scheme.
With respect to the BNYM “aiding and abetting OneCoin scammers, the court upheld the class-action Plaintiffs had
not alleged that BNYM provided substantial assistance to the OneCoin fraud.
Consequently the Scott Group Defendants and the BNYM were dismissed as class-action defendants on September 20th.
Mark Scott was convicted of OneCoin money laundering charges in November 11th.
Pending a resolution of a retrial motion, Scott is scheduled to be sentenced in November.
David Pike is expected plead guilty to OneCoin money laundering charges next month.
US authorities have not filed criminal charges against Nicole Huesmann or the BNYM.
Remaining class-action Defendants include OneCoin, Ruja Ignatova, Sebastian Greenwood and Gilbert Armenta.
Looking forward, class-action Plaintiffs have been directed to file proof of service on the remaining defendants by October 9th.
A show cause hearing has been scheduled for November 12th.
The court is exceeding hostile to a case that should have been a walk in the park since many of the defendnants are in custody.
Looks like maybe a problem for not just the pleadings but perhaps the plaintiff’s standing.
Very odd the putative class representative is just one person when there are tens of thousands of victims.
I’m not intricately familiar with class proceedings but do they need to finalize the defendants before certifying a class?
I don’t think I’ve ever seen parallel civil proceedings in MLM fraud cases not brought by a regulator turn out well.
I believe this class action, as so many was the attempt by the lawyers to make quick money.
Clearly, they did not expect this type of resistance from defendants already implicated in the OneCoin scheme.
In any event, not smart at all. How would they even recover any funds when US Govt will have it all?
Also ironic how Konstantin made a deal to settle to get out of the class action and told the plaintiffs just the same lies he may have in the Scott criminal trial.
A blessing in disguise.
There should be a parallel SEC case with a receiver – there are funds all over the place that have not been rounded up. The SEC has those details.
I am sure Greenwood’s phone will reveal he has been on speed dial to his lawyer with POA in Dubai.
Seems odd that Greenwood would have had the cell phone the whole time at the Manhattan lock up, now that explains how he made a court appearence in Dubai.
And I am sure he has been monitoring this forum, after all he has a lot of time on hands.
SEC can name all those OneCoin facilitators who made off with millions as relief defendants and do a clawback.
The defendants who plead out, can then be made to sign a confession of judgment. This method worked with Madoff and Stanford.
Totally with you re. the missing SEC case. No idea why they haven’t filed, other than there’s ongoing criminal investigations going on tied to the UAE money laundering.
I.e. even if the SEC filed and won, recovery of anything at this stage would be extremely messy at best.
The Grablis case provides a list of US based profiteers.
SEC files companion cases all the time and then stays them pending outcome of the criminal case.
The issue (IANAL) is Ruja is missing and the money and those in control of it appear to be in the UAE.
I don’t recall the SEC going after net-winners unless those in charge are in custody. That can be in the US (ala TelexFree) or abroad (Kumbhani and BitConnect).
SEC docket is full of cases where no one is in custody – SEC can file in federal court or in its own administrative court.
Some times the scammer skips the country or evades service. SEC also takes lot of defaults on companies.
The only hurdle for SEC cases is service of process. So they couldn’t serve Ruja but they can nail anyone in a country where they have a cooperation agreement – EU, Canada, UK, India, etc.
sec.gov/litigation/litreleases.htm
SEC even has cooperation in the UAE:
sec.gov/news/press-release/2021-148
Therefore the fact they have not gone after OneCoin is curious given there are billions potentially that could be recovered.
I’m only coming from the MLM regulatory perspective and what we’ve seen so far.
UAE/Dubai is a regulatory black hole with respect to MLM regulation.
All good thoughts, however, a SEC case could equally not be brought against the defendants that were just dismissed in NY.
It is clear from the record that they did not participate in the wire fraud at all and did not bank in the US.
Besides that, no deep pockets. All happened in other countries. So far the entire criminal case hinges almost entirely on acts outside of the US.
Hopefully, the Govt has more to show in Greenwood trial than it did in the Scott trial. Was pocket change they used to connect the global fraud to the US.
Even Konstantin, who is not entirely reliable of course,did not testify about a US operation. Wire fraud is not a crime the US can charge if not sufficient activity occured in the US.
It must be expected that Greenwood will argue this. Scott did and decision still out. But the civil side of things is seemingly over and likely not financially rewarding to any victims.
No, no it isn’t.
1. The Scott Group Defendants were dismissed on a jurisdictional technicality.
2. The Bank of New York Mellon was dismissed based on the evidence the civil defendants presented in court.
You cannot say with certainty that the mountains of evidence the US govt has on OneCoin scammers would result in an SEC case against the BNYM going the same way.
Go read up on the SEC’s Traffic Monsoon case. Charles Scoville trotted this exact defense out and got steamrolled.
Then go read up on the BitConnect cases. Indian admins with a contingent of top US promoters.
Bottom-line: if there’s US citizens involved and/or US resident investors, RIP.
Um, Scott was convicted. His retrial motion has nothing to do with “you can’t charge me with wire fraud!” or “sufficient activity didn’t occur in the US”.
Jurisdiction is always a technical legal issue. I am not sure I understand your comment? Jurisdiction and venue need to bikeweise established if the SEC brings a case.
And it is simply not true that it is enough to justify wire fraud because a US citizen is involved. The nexus requirement is much higher than that.
I read Scott’s motion and one main argument is exactly that. Take a look. And see SCOTUS decision Morrison and RJR Nabisco..
I’m saying you made this up: “It is clear from the record that they did not participate in the wire fraud at all and did not bank in the US.”
Please go and read up on the SEC’s Traffic Monsoon case.
Then go read up on the SEC’s BitConnect promoter case. Thanks.
SEC has jurisdiction until a federal court says they don’t, they win something like 99% of their cases.
If OneCoin was marketed in the US, the SEC has jurisdiction, it does not matter where they were based otherwise Alan Stanford would have walked.
If OneCoin used email or cell phones in the US, it is wire fraud.
The SEC is not some toothless entity like the UK FCA that aids and abets organized crime though a nonfeasance regime.
sec.gov/news/press/2009/2009-26.htm
No “deep pockets?” You got to be kidding, there are hundreds of millions sitting in blocked accounts in Dubai. There are accounts still under Greenwood’s control as well.
There is the little matter of 230,000 Bitcoin an Emirati sheikh swears he gave Ignatova. There are assets in Bulgaria and the UK.
There are OC upstreamers who have profited off the misery of most investors and who need disgorge their profits. I am sure Greenwood’s phone will yield some interesting data.
My comments refer to the defendants that were dismissed from the class action. No the deep pockets and nothing to be gotten there. And none of them charged in the wire fraud.
I do think you are wrong on the jurisdictional issues. But let’s agree to disagree.
And good luck getting anything out of the UAE. They don’t pay ball. The country would empty out the next day if it was no longer a reliable hideout for the rich.
systensceptic – the US has jurisdiction because the US says it has jurisdiction.
Read the Patriot Act, look at how offices like the SDNY and FATCA behave and catch a wake-up.
And be glad they’re there, because otherwise there would be no safety net.
Very creative interpretation of the Patriots Act….. In any event, whatever any Govt agency tries, they will need a lot more evidence than was produced at the Scott trial.
I checked and it was only approximately $50k from the US they tried to tie to him. According to his posttrial motions, the Govt can’t even prove that. And the class action had a plaintiff class with a relatively small tota investment.
If the US victims don’t step up in masses, this will go nowhere.
OneCoin’s promotion “captain” KingJayms lies to the OneCoin members how the dismissal of “Scott Group Defendants” in the Class Action happened because the “company is not a scam, and has done nothing wrong”.
KingJayms and Thanh Duong proceed with the “we only sell education” pseudo-compliancy claim.
youtu.be/Mpy06tN4U0s?t=2524
KJ lying must be an absolute consolation to everyone rotting behind bars in Argentina, Schneider and Konstantin.
The judge in the Grablis case is dead wrong – OneCoin was marketed nationwide including the SDNY.
The error of the plaintiff’s lawyer was not naming a defendant who resided in the SDNY. Although hard to understand how the SDNY criminal court has jurisdiction if the civil court does not.
All the affiliates in the US should have been sued as well, law firm was not aggressive enough. Victims need to get together and try again.
I still doubt Schneider is indicted, why grab him in France when they could have got him in Luxemburg? France is notoriously difficult to extradite from.
Why one one sealed indictment? Grand juries don’t work that way, they indict wholsesale.
It’s important to note the Judge didn’t state OneCoin had no jurisdictional ties to NY. Only that the Plaintiffs failed to provide evidence to establish jurisdiction.
Schneider has significant ties to the Luxembourg government through his work as a spy master. That’s not a factor in France.
Re. sealed indictments, again; Sebastian Greenwood.
As I understand it you can’t put out an international arrest warrant and extradition application without filing charges. Charges means there’s a sealed indictment.
Fork the judge and her bullshit ruling .. there are other ways to skin a cat… And I am not DONE… Just getting started don’t mess this MAMA bear.
OneCoin Investors Entirely Dismiss Class Actions Lawsuit
financemagnates.com/cryptocurrency/news/onecoin-investors-entirely-dismiss-class-actions-lawsuit/
Can’t say I’m surprised. This case was shaky from the beginning.
OneCoin Ltd. is not defunct nor without assets – the lawyers cut their losses on a tough case and have no apparent international reach. Except for the bank, they were suing alleged criminals who have no respect for the law.
We won’t give up:
sueddeutsche.de/wirtschaft/kryptowaehrung-onecoin-betrug-1.5427028?reduced=true
Oz – the case was not shaky at all, there were plenty of US victims and defendants. OneCoin proceeds were obviously laundered through Manhattan.
Bottom line – with the bank dismissed – they had no deep pocket.
The alleged criminals surely were not going to willingly pay. They needed more US plaintiffs and defendants and a better legal game plan.
For example: I have filed cases with over a dozen named plaintiffs, there is no limit – class certification is always tricky, so you would never want to count on that.
Right, which made the case as filed shaky. (???)
Likely they made some legal assumptions about suing crooks and banks that did not pan out.
The victims deserve compensation especially because much of the funds are still within reach and those who unjustly profited not in hiding.