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In OneCoin Case Lawyers for Mark Scott Stress Bank Fraud Covers Only FDIC Banks

By Matthew Russell Lee, Patreon

SDNY COURTHOUSE, Oct 24 – 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. On October 23, this from Mark Scott's attorneys: "Reviewing the Government’s request to charge and other recent developments have heightened our concerns about the Bank Fraud conspiracy count added by the Government to the S10 indictment returned on October 8, 2019. There is a real danger that without careful policing during the trial, the jury will understand the bank fraud charge as a more sweeping version of the a money laundering charge, covering any false statement to a financial institution designed to move money in or out of bank accounts and without the need for the Government to prove that Mr. Scott knew that the money moved was proceeds of a crime. The reality is that bank fraud under 18 U.S.C. § 1344 is considerably narrower in key respects, including that it only covers only FDIC banks. Mr. Scott outlines these concerns below both so the Court can address issues that may arise during the trial, and to request that the Court require the Government to prove that Case 1:17-cr-00630-ER Document 160 Filed 10/23/19 Page 1 of 4 2 the object of the Bank Fraud conspiracy involved one or more of the identified accounts and transactions at the three banks identified in response to a request for particulars." Inner City Press will be covering the trial.

On October 9 from SDNY Judge Ramos, this: "ORDER as to Ruja Ignatova. It is hereby ORDERED that Any attorney-client privilege held by the Affected Parties in connection with the communications described below (collectively, the Subject Communications) is deemed waived: Communications between OneCoin Ltd., OnePayments Ltd., OneNetwork Services Ltd., OneAcademy, OneLife, and RavenR Capital Limited, and attorneys for those entities; and Communications between Ruja Ignatova, Frank Ricketts, Manon Hubenthal, Irina Dilkinska, International Marketing Services GmBH, International Marketing Services Singapore Pte, International Marketing Strategies Ltd., and B&N Consult EOOD, and attorneys for those individuals and entities, regarding OneCoin-related financial transactions and the continued operation of the OneCoin scheme. The Subject Communications fall within crime-fraud exception to the attorney-client privilege, and are therefore non-privileged not withstanding the waiver described above. (Signed by Judge Edgardo Ramos on 10/9/2019)." Inner City Press will continue to cover this case.

  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)."

  Meanwhile OneCoin lawyer Mark S. Scott is opposing the government's request to postpone his criminal trial set to begin on October 7. It's a showdown on Speedy Trial Act and taint-team grounds that Inner City Press will be following, including with the inside view, more on Patreon here.

  But Scott's trial has in fact been delayed: "Status Conference as to Mark S. Scott held on 8/30/2019. Defendant's appearance waived. Counsel for Defendant: David Garvin, Esq and Arlo Devlin-Brown, Esq. For the government: AUSAs Chris Demase, Nicholas Folly, and SAUSA Julieta Lozano. The October 7, 2019 jury trial is adjourned to Monday, November 4, 2019 at 9:00 a.m. A final pretrial conference will be held on October 28, 2019, at 2:30 p.m. Speedy trial time is excluded from October 7, 2019, until November 4, 2019, in the interest of justice. (Jury Trial set for 11/4/2019 at 09:00 AM before Judge Edgardo Ramos. Pretrial Conference set for 10/28/2019 at 02:30 PM before Judge Edgardo Ramos)."

  From Scott's lawyer's letter: "On August 23rd the taint team advised the defense via email that the taint team “expect[s] to produce to you by the end of next week [i.e., August 30th] approximately 67,000 documents constituting additional materials from the Mark Scott ESI that has been determined to be non-privileged,” asking that the Mark Scott review and assert privilege over any of these documents within a week of receipt. Concerned with the volume of documents that the taint team had still not completed review of, counsel for Mr. Scott started discussing the issue with the Government. After considering options, we informed the Government yesterday that the taint team could turn the set of documents – now estimated to be 70,0000 – over to the prosecution team at the same time they were provided to defense, giving up entirely our right under the agreement struck with the Government to review the documents in advance. We agreed that the taint team could do the same for any other documents on a going forward basis. Given that the taint team review process had become more accurate over time, this was a concession to the Government that seemed very much worth making. The Government, it seems, cannot take yes for an answer. Inexplicably, it seeks to use Mr. Scott’s willingness to expedite the Government’s access to these documents as reason to delay trial. The Government argues that it is “entitled to a reasonable amount of time to review the more than 70,000 additional documents that it was granted access to for the first time only yesterday afternoon.” 2  What the Government is less clear about is that the holdup is its own taint team, not Mr. Scott. The taint team is “still in the process of releasing these documents,” as the Government concedes in a footnote, Id. at n.2, and the documents were only released to the prosecution team and Mr. Scott this afternoon, after the Government filed its application.

Mr. Scott has not delayed the prosecution team’s access to this set of 70,000 documents by even one minute. Privilege reviews are difficult, and the process can be frustrating to all. But far from “obstructing the prosecution team’s ability to review lawfully-obtained material,” as the Government claims, Mr. Scott has followed the process the parties agreed to as reported to the Court on July 30th, and is now willing to remove himself from the process entirely so both parties – prosecution team and defense – can focus on preparing for the October 7th trial. The taint team’s own apparent challenges in clearing this latest batch of 70,000 documents are no fault of Mr. Scott’s, and no reason to delay his right to a speedy trial. The Government charged Mr. Scott with a serious crime over a year ago, throwing his life into turmoil, based on evidence it presumably believed would support a conviction. The time has come for a trial."

 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. Ignatov, 17-cr-630 (Ramos).

 Now on August 12, this: "ENDORSED LETTER as to (S7-17-Cr-630-03) Konstantin Ignatov addressed to Judge Edgardo Ramos from Attorney Jeffrey Lichtman dated August 9, 2019 re: submitted to respectfully request an adjournment of the August 16, 2019 status conference in this case until September 6, or a date thereafter that is convenient for the Court. ENDORSEMENT: The status conference is adjourned to September 6, 2019 at 10:15 a.m. SO ORDERED. (Signed by Judge Edgardo Ramos on 8/12/2019)." More on Patreon, here.


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