This is embarrassing: "Head of Legal and Compliance" pleads guilty to her part in a USD4,000 million fraud

News Desk

The US Attorney for the Southern District of New York is a bit of a star today. Damian Williams has secured a guilty plea from IRINA DILKINSKA for her part in the OneCoin cryptocurrency fraud .

Like so many cases that are headlined as problems with crypto, the case comes down to simple criminality.

OneCoin, which began operations in 2014 and was based in Sofia, Bulgaria, marketed and sold a fraudulent cryptocurrency by the same name through a global multi-level-marketing (“MLM”) network. As a result of misrepresentations made about OneCoin, victims invested over USD4,000 million worldwide in the fraudulent cryptocurrency. U.S. District Judge Edgardo Ramos accepted DILKINSKA’s guilty plea.

In various court papers it was alleged:

in 2014, RUJA IGNATOVA, a/k/a “the Cryptoqueen,” and KARL SEBASTIAN GREENWOOD co-founded OneCoin,[1] a company based in Sofia, Bulgaria, that marketed a purported cryptocurrency by the same name, which was in fact a fraudulent pyramid scheme. OneCoin operated as a MLM network through which members received commissions for recruiting others to purchase cryptocurrency packages. This MLM structure influenced rapid growth of the OneCoin member network. Indeed, according to OneCoin’s promotional materials, over three million people invested in fraudulent cryptocurrency packages. OneCoin records show that between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 million in sales revenue and earned “profits” of €2,735 million.

DILKINSKA was the purported Head of Legal and Compliance for OneCoin. But rather than ensuring that OneCoin complied with the law, DILKINSKA assisted in running its day-to-day operations and laundered money for OneCoin, including arranging for the transfer of $110 million in fraudulently obtained OneCoin proceeds to a Cayman Islands entity.

On October 12, 2017, IGNATOVA was charged with OneCoin-related fraud and money laundering charges in the U.S. District Court for the Southern District of New York and a federal warrant was issued for her arrest. On October 25, 2017, IGNATOVA travelled on a commercial flight from Sofia, Bulgaria, to Athens, Greece; she has not been seen publicly since. IGNATOVA was added to the Federal Bureau of Investigation’s (“FBI”) Top Ten Most Wanted List in June 2022. The FBI is offering a $100,000 reward for information leading to IGNATOVA’s arrest.

DILKINSKA, 42, a citizen of Bulgaria, pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of five years in prison, and one count of conspiracy to commit money laundering, which also carries a maximum potential sentence of five years in prison.

*The Department of Justice seems to use the terms "pyramid scheme" and "multi-level marketing scheme interchangeable where as one is always illegal and the other is not, provided certain conditions are met. WMLR has left the terms as used by the DOJ in the absence of clarification as to exactly what is meant. Sorry about that.