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By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Oct 28 – After OneCoin's Konstantin Ignatov got a stay of the civil case against him, then his criminal case was kicked down the road for at least another two months. Now the can approaches, on November 4.

On Sunday, October 27 Mark Scott's lawyers asked Judge Ramos to allow in more of Scott's post arrest statement, a request that for example in the recent Honduras narco-trial the defense left until mid-trial but still got granted in five instances. More on Patreon here.

Here's what Scott wants in: "The Government is expected to argue at trial – as it has in its motions – that Mr. Scott lied both to financial institutions and federal agents about the investors in the Fenero Funds, particularly the relationship of the fund investors to Ruja Ignatova and OneCoin. The Government has cherry-picked portions of Mr. Scott’s post-arrest statement to support this argument, making it appear that he told the agents virtually nothing about his awareness of the Ignatova/OneCoin connection when in fact he said a great deal. Given that much of the Government’s case is premised on Mr. Scott’s supposed effort to hide the relationship between Ignatova/OneCoin and the Fenero Fund investors, it is crucial the his complete statements on these subjects be admitted.  Accordingly, the following eight Defense Additions (highlighted in green in accompanying Exhibit A) should be included under the rule of completeness should the Government seek to admit the identified portions of the post-arrest statement.

Defense Addition 1 (7:39:32 – 7:40:59). The Government includes multiple statements Mr. Scott made about Ruja Ignatova at various places in the post-arrest statements1 , but leaves out others, creating a misleading impression through those excerpts that Mr. Scott was reluctant to provide any detail about Ms. Ignatova. On pages nine to ten (7:37:15 – 7:39:08), Mr. Scott discusses, an investment from “Irina” at B&N”2  adding that she was introduced by “umm, uhh, Ruja.” The Government then proposes to abruptly end Mr. Scott’s description of Ruja and her engagement of Locke Lord, cutting Mr. Scott’s statement off mid-sentence. Doing so falsely suggests that that Mr. Scott gave only a vague description of Ruja Ignatova and was unwilling to speak about her or her connection to the money laundering offense he had been charged with, when Mr. Scott in fact provides a further description immediately after the Government excerpt ends. Mr. Scott therefore seeks to admit his complete description of Ms. Ignatova immediately below, from 7:39:32 to 7:40:59.

 Defense Addition 2 (7:54:38 – 7:55:14). On pages 19-20 (7:53:08 – 7:54:38), the agents elicit that Gilbert Armenta introduced Mr. Scott to Ms. Ignatova. The agents then ask if Mr. Armenta was “an investor in Fenero or in any of the other companies.” Mr. Scott starts to answer “yes” and then immediately clarifies that with “But umm, I have to give a but…,” making it clear that his answer was not in fact an unequivocal “yes,” as the Government would have it. He then mentions some “red flag” had come up and he returned the funds Mr. Armenta sent. The Government’s excerpt cuts Mr. Scott off midexplanation creating the erroneous impression that Mr. Armenta successfully invested when in fact he stated that investment was rejected and the funds were returned. Mr. Scott therefore seeks the inclusion of the time period from 7:54:38 through 7:55:14.).

Defense Additions 3, 4 and 5. On pages 29-30 (8:17:23 to 8:18:21) the agents ask Mr. Scott a series of questions about what he knows about OneCoin and its reputation. The Government then selectively excerpts Mr. Scott’s statements on what he knew about OneCoin to create the objectively false impression that all Mr. Scott knew about OneCoin was negative information. The following additions are necessary to correct this misimpression: o Defense Addition 3 (7:57:116 – 7:58:42). The Government does not include Mr. Scott’s explanation of the role Locke Lord played in representing Ms. Ignatova, including Mr. Scott’s statement that he “relied on” an analysis by a Locke Lorde colleague he considered to be a crypto excerpt. This excerpt should be included.

 Defense Addition 4 (8:18:21 – 8:18:55). At 8:18:14 Agent Eckel says to Mr. Scott: “So you never heard of OneCoin besides reading about it in the press?” Mr. Scott’s actual answer is “No I heard about OneCoin. That’s why, when I, at the beginning I like I said when I knew the relationship between her and OneCoin is 

FN 1 See, e.g, 15-18 15 (7:47:35 – 7:51:14) (in which Mr. Scott answers questions about how many times he has met Ms. Ignatova and how he has communicated with her).

FN2  The draft transcript spells Irina’s name incorrectly and says “BNN” rather than “B&N,” which the defense will address with the Government.

 when I basically asked for the opinion of which country or if at all any country OneCoin was illegal, or, or, you know banned or whatever so then we wouldn’t do business with them. You know there was rumors were going around, pyramid scheme and all that and we didn’t want to be involved with that.” The Government proposes to delete the middle sentence of Mr. Scott’s response (italicized) so that his answer would be: “No I heard about OneCoin. You know there was rumors were going around, pyramid scheme and all that and we didn’t want to be involved with that.” This would dramatically change the meaning of Mr. Scott’s answer whereas the full answer would make clear that Mr. Scott’s reference to “rumors” relates to why he sought a legal opinion in the sentence the Government proposes to cut. o Defense Addition 5 (8:22:24-8:24:10). At 8:22:24, Mr. Scott further makes clear that he did diligence on OneCoin, noting he had at the time “purposefully checked out that there was nothing illegal going on. There was no investigation, there was no investigation, there was nobody indicted, or anything like that.” Mr. Scott’s answer at 8:22:24 should therefore be included to make clear the totality of what he told the agents he know about OneCoin at the time of the charged events.

 Defense Addition 6 (8:21:03 – 8:24:10). On pages 30 and 31 from 8:18:55 through 8:20:43, the agents ask Mr. Scott about his understanding of One Coin’s relationship with Fenero Funds and ask whether he stopped doing business with a particular company he found had a OneCoin connection. After an interjection by an agent that Mr. Scott has an “opportunity to help himself” and in invitation for Mr. Scott to continue his answer, Mr. Scott does just that and expands on why for some period he was willing do business with OneCoin affiliates. The entirety of this exchange, from 8:21:03 through 8:23:13 should be included. (This also includes excerpt 5).

Defense Addition 7 (8:26:46 – 8:28:41). On page 34, at 8:26:42, the agents ask Mr. Scott a leading question: “And OneCoin and Ruja had nothing to do with Fenero or any other funds that you were involved in?” Once again, the Government proposes to include only part of Mr. Scott’s answer to that single question, creating a misleading impression. Specifically, Mr. Scot responds “No. No… the name wouldn’t come up” and then clarifying – in the portion of the answer the Government proposes removing – that he was focused on the names that would appear on the KYC and subscription agreements while acknowledging that “Ruja [was] there in some capacity.” The entirety of Mr. Scott’s answer to the question posed by Agent Eckel should be included.

Defense Addition 8 (8:28:59 – 8:30:39). On page 34, at 8:28:41, the agents ask Mr. Scott “What were your fees?” Mr. Scott responds using the word “we” which prompts an agent to interject that “[y]ou keep saying the word we… ‘cause you were the sole person…[y]ou’re, you’re the guy,” to which Mr. Scott agrees. When Mr. Scott moves beyond this interjection explain the fee question the agents posed the Government proposes to remove his answer. Mr. Scott’s answer to the question posed by the agents, at 8:30:39 should be included."

  Inner City Press intends to live-tweet as much of the trial as possible, having put in requests in advance. Watch this site.

  On September 6 Inner City Press was rushing to the SDNY courthouse for a 10 am conference in the case when the subway simply stopped for 15 minute: "unruly passenger," they called it. Once in Foley Square Inner City Press ran into Ignatov's lawyer who politely answered that the short conference was already over, with the case delayed two months due to discovery and the civil case.

  Here's how it was entered into the docket some hours later: "Minute Entry for proceedings held before Judge Edgardo Ramos: Status Conference as to Konstantin Ignatov held on 9/6/2019... A pretrial conference is scheduled for November 7, 2019, at 3:30 p.m. Speedy trial time is excluded from today, September 6, 2019, until November 7, 2019, in the interest of justice. (Pretrial Conference set for 11/7/2019 at 03:30 PM before Judge Edgardo Ramos) (lnl)."

 With OneCoin the subject of criminal prosecution a civil case against it was ordered stayed on August 23 by U.S. District Court for the Southern District of New York Judge Valerie Caproni.

  While Konstantin Ignatov's lawyer Jeffrey Einhorn's basis for the stay was "corresponding criminal prosecution," Judge Caproni also chided plaintiffs' lawyers at Levi & Kosinsky for failing to serve or show service on some of the defendants.

  Later in the day the firm wrote that "OneCoin Ltd. and Ruja Ignatova are domiciled in Bulgaria and are believed to be evading service. Sebastian Greenwood, similarly, is domiciled in Sweden, and is believed to be evading service." They are proposing service by Facebook, citing FTC v. Pecon Software Ltd, 2013 WL 4016272, at *5 (SDNY Aug. 7, 2013). Whether Judge Caproni will accept this is not yet clear. More on Patreon here. Inner City Press will continue to follow these cases.

Back on June 28 detention was continued for OneCoin defendant Konstantin Ignatov, after he offered to pay armed guards to keep him in an apartment he would rent in Manhattan. U.S. District Court for the Southern District of New York Judge Edgardo Ramos questioned the source of the bail money that Ignatov was offering to put up, as well as issued raised about the propriety of "private prisons" of  the type now incarcerated UN briber Ng Lap Seng, whose appeal was just denied, was allowed to live in during the pendency of his case.

  Ignatov's lawyer Jeffrey Lichtman noted that Bernie Madoff got bail, and that the government could not show any contact between Ignavov and his sister Ruja, indisputedly higher up in the OneCoin scheme. But Judge Ramos, after more than an hour of argument, was not convinced. The case is US v. Scott / Ignatov, 17-cr-630 (Ramos).

 More on Patreon, here.

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