The co-founder of the enormous pyramid scheme that raised more than $4 billion from millions of investors worldwide using the phony cryptocurrency OneCoin was given a 20-year prison sentence on Tuesday.
In December, Karl Greenwood, 46, who was in command of the multibillion dollar multilevel marketing swindle, entered a guilty plea to counts of wire fraud and money laundering.
According to the US Department of Justice, Ruja Ignatova, his 43-year-old partner and the “Cryptoqueen” on the FBI’s list of the Top 10 Most Wanted, is still at large.
In a press statement, U.S. Attorney Damian Williams claimed that Greenwood “operated one of the largest fraud schemes ever perpetrated.”
Williams stated, “We hope that this lengthy sentence reverberates throughout the financial industry and dissuades anyone who may be tempted to deceive investors and take advantage of the cryptocurrency ecosystem through fraud.”
In lower Manhattan’s U.S. District Court, federal Judge Edgardo Ramos handed down Greenwood’s sentence.
According to the DOJ, OneCoin, which started in Bulgaria in 2014, received more than $4 billion from at least 3.5 million users between 2014 and 2016. A multilevel marketing system was used to promote and sell the plan, and it paid commission to OneCoin members who brought in new crypto package buyers.
According to the DOJ, Greenwood, the leading distributor, earned more than $300 million overall by receiving 5% of all OneCoin purchases.
OneCoin was regularly portrayed by Greenwood and Ignatova as the following cryptocurrency investment opportunity similar to Bitcoin. OneCoin, however, “had no actual value and was conceived by Greenwood and Ignatova as a fraud from day one, unlike legitimate cryptocurrencies,” said the DOJ.
One of the many times the co-founders and others misled their investors was when they asserted OneCoin’s value was determined by market forces when in fact its price was decided “arbitrarily,” according to authorities.
Ignatova was charged with fraud and money laundering in October 2017. Ignatova flew from Bulgaria to Athens, Greece, a few days after a federal arrest notice was issued for her.
She “has not been seen publicly since,” according to the DOJ.
According to Ignatova’s entry on the FBI’s list of the Top 10 Most Wanted Fugitives, the agency is offering a reward of up to $250,000 for information that results in her capture.
She is “believed to travel with armed guards and/or associates,” according to the wanted poster, and “may have had plastic surgery or otherwise altered her appearance.”