“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.