Wellington police seize $462,000 in proceeds of fraudulent OneCoin crypto scheme

Police have seized a Wellington property and hundreds of thousands of dollars believed to be the proceeds of the fraudulent cryptocurrency scheme OneCoin.

Detective Inspector Christiaan Barnard, of the Central Asset Recovery Unit, said police had worked with international jurisdictions to locate and seize the New Zealand-based profits of crime from Frank Schneider, a Luxembourg citizen.

The successful collaboration resulted in the restraint of a Wellington property and $462,000, Barnard said.

The money is alleged to have been sent to an associate in New Zealand to buy assets and property, between 2018 and 2020.

Schneider was arrested in France in 2021 after being charged by United States authorities with conspiracy to commit wire fraud, and with money laundering.

He is on the run after escaping house arrest.

Barnard said Schneider was the CEO of Sandstone, which was contracted by Onecoin Ltd, a company alleged to have created a $6.5 billion pyramid scheme originating in Europe.

“A number of the company’s executives have been prosecuted or are currently on the run. There is no suggestion that any of the OneCoin suspects are in New Zealand,” Barnard said.

”The New Zealand police will continue to work with our international partners to ensure that New Zealand’s financial system is not abused to hide illicit income.”

An investigation is under way, pending an application to the High Court seeking forfeiture of the assets.

The United States attorney for the Southern District of New York, Damian Williams, announced in September that Karl Sebastian Greenwood, who co-founded OneCoin with Ruja Ignatova, known as the “the Cryptoqueen”, was sentenced to 20 years in prison for his orchestration of the massive OneCoin fraud scheme.

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 network, Williams said at the time.

As a result of misrepresentations that Greenwood, Ignatova and others made about OneCoin, millions of victims invested over US$4 billion ($6.5b) worldwide in the fraudulent cryptocurrency, Wiliams said.

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.