One of America’s oldest banks wired over a hundred million dollars in funds linked to the crypto Ponzi scheme OneCoin, according to a trove of documents leaked from the U.S.’ financial crimes watchdog.
In February 2017, the Bank of New York Mellon (BNY Mellon) flagged a number of transactions with the Financial Crimes Enforcement Network (FinCEN) it deemed suspicious as they appeared to be “layered” – a money-laundering technique that hides the source of funds through sending multiple transactions.
Worth a combined $137 million, the bank said these transactions came from entities linked to OneCoin – a crypto scheme the U.S. government accused of being a Ponzi. It’s estimated OneCoin raised a total of $4 billion from investors, making it one of the most successful schemes of its kind ever.
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Buzzfeed received thousands of leaked suspicious activity reports (SARs) from 2011 and 2017 that show instances when a bank’s compliance team flagged a transaction they consider out of the ordinary and possibly suspect with FinCEN.
Dubbed the “FinCEN files,” the trove of 2,657 documents gives an indication of how much dirty money may be passing through some of the world’s biggest banks. As SARs are just the concerns of compliance officers, they are not necessarily evidence of wrongdoing by themselves.
The files show Deutsche Bank flagged a total of $1.3 trillion, JPMorgan approximately $500 billion and Bank of America another $384 billion. BNY Mellon underlined a total of $64 billion in 325 separate SARs filed with FinCEN, making it the second-most-frequent filer in the leaked documents.
See also: UK Watchdog Eyes Extension of Money Laundering Risk Reporting to Crypto Firms
Buzzfeed shared the FinCEN files with the International Consortium of Investigative Journalists (ICIJ), which showed one particular transaction in 2016 where Fenero Equity Investments, a British Virgin Islands-based company, wired approximately $30 million from its account at DMS Bank & Trust, a Cayman-based bank, to BNY Mellon.
Fenero described the payment as a “loan for CryptoReal” – an investment trust set up by OneCoin founder Ruja Ignatova, who has not been seen since late 2017.
In a SAR filed at the time, BNY Mellon’s compliance team said Fenero often received wires from shell entities linked to OneCoin. It sent the money on to Hong Kong’s DBS Bank, where it was credited to a local company called Barta Holdings.
Emails seized by U.S. authorities last year shows Mark Scott, the New York attorney convicted last year of laundering $400 million for OneCoin, arranged the $30 million loan from Fenero to allegedly purchase an oilfield from Barta Holdings.
But the seized emails show that the loan was never repaid and that $10 million of the amount sent to Barta Holdings was actually spent by one of the OneCoin co-founders.
“I believe that the €30 million purported “loan” from Fenero to Barta was arranged by Scott to launder OneCoin Ltd. proceeds to CC-2 [OneCoin’s co-founder],” said testimony from special agent Kurt Hafer, attached to the New York Attorney’s office.
See also: US Moves to Seize $400M From Convicted OneCoin Money Launderer
A BNY Mellon spokesperson told ICIJ that the bank fully complied with existing financial regulation and took its role in protecting the integrity of the global financial system seriously. By law, they said the bank was unable to comment on specific SARs.
Likewise, DMS Bank said it took its legal responsibilities for helping to combat fraud and money laundering “extremely seriously.”
OneCoin, Ruja Ignatova, and DBS Bank didn’t respond to ICIJ’s requests from comment.
