Ruta Ignatova, the infamous “Cryptoqueen,” remains a fugitive after getting on a plane and vanishing six years ago. But her former partner is going to prison.
A New York federal judge has sentenced Karl Sebastian Greenwood to 20 years behind bars for his role in a global cryptocurrency scheme that scammed investors out of more than $4 billion.
Ignatova boarded a flight in Sofia, Bulgaria, in October 2017 and vanished, leaving Greenwood and her other business partners to take the fall for their failed company. She’s been on the run since and remains the only woman on the FBI’s 10 Most Wanted list.
More than 3 million people invested in the pair’s fraudulent cryptocurrency, OneCoin, making it one of the largest global fraud schemes ever perpetrated, US Attorney Damian Williams said.
Greenwood, 46, is a citizen of Sweden and the United Kingdom. Federal prosecutors say his “mastery as a salesman” helped build OneCoin’s initial success.
“Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars with promises of a ‘financial revolution’ and claims that OneCoin would be the ‘Bitcoin killer,’” Williams said in a statement after the sentencing last week.
“In fact, OneCoins were entirely worthless, and investors were left with nothing, while Greenwood lined his own pockets with over $300 million.”
The pair knew it was a scam from the start, prosecutors say
Prosecutors say Greenwood and Ignatova leveraged Bitcon’s success to capitalize on the scheme. Ignatova called herself the “Cryptoqueen” and touted their company as a lucrative rival to Bitcoin in the growing cryptocurrency market.
“In two years, nobody will speak about Bitcoin anymore,” she said at a splashy investor event in London the year before she disappeared.
But authorities said OneCoin was a pyramid scheme that defrauded investors in the US and around the globe. Court documents say Ignatova and Greenwood were aware from the start that their ambitious venture was a Ponzi scheme.
While they were working on the concept for OneCoin, they referred to it in emails as a “trashy coin,” federal officials said in court documents. The documents show Greenwood described their investors as “idiots” and “crazy” in an email.
“It might not be (something) really clean or that I normally work on or even can be proud of (except with you in private when we make the money),” Ignatova wrote to Greenwood in 2014.
She also proposed an exit strategy should the company fail, saying in a 2014 email to Greenwood that they should “take the money and run and blame somebody else for this.”
Prosecutors allege that’s exactly what she did. And in July 2018, nine months after Ignatova went missing, Greenwood was arrested at his home in Koh Samui, Thailand, and extradited to the US.
He used the money to buy homes and a yacht
Ignatova and Greenwood started pitching OneCoin to investors in Europe, New York and other cities in 2014. They hosted online webinars and conferences where they urged potential investors to deposit funds in an account that would enable the purchase of OneCoin packages, according to a federal indictment.
OneCoin operated as a multilevel marketing network in which investors received commissions for recruiting others to buy cryptocurrency packages, federal prosecutors said. The packages catered to various income levels, from “starter” to “tycoon trader.” The partners promised buyers a fivefold or even tenfold return on their investment, according to court documents.
Prosecutors say Greenwood used the flood of cash from investors to buy luxury designer clothes, footwear, watches, a yacht and homes in various countries, including Spain, Dubai and Thailand.
He also used investor funds to travel the world in a private “OneCoin” jet, prosecutors say.
Greenwood pleaded guilty in December to wire fraud, conspiracy to commit wire fraud and conspiracy to launder money. In addition to his prison term, he was ordered to forfeit about $300 million.
“We hope this lengthy sentence resonates in the financial sector and deters anyone who may be tempted to lie to investors and exploit the cryptocurrency ecosystem through fraud,” Williams said.