Bank of New York Mellon (BNY Mellon) has been accused of playing a “central role” in the $4 billion Ponzi scheme OneCoin, just days after the publication of the so-called FinCEN Files.
Accusing it of “turning a blind eye” and “laundering” approximately $300 million for the scheme, investors Donald Berdeaux and Christine Grablis have added one of America’s oldest banks to an existing class-action lawsuit seeking damages against OneCoin and its key figures, including founder Ruja Ignatova, who disappeared in late 2017.
The plaintiffs, who together invested approximately $1 million into OneCoin, say that while BNY Mellon processed payments for OneCoin in May 2016, and even referred to it as a possible “Ponzi/pyramid scheme” in an internal investigation that December, it didn’t file a suspicious activity report (SAR) with the Financial Crimes Enforcement Network (FinCEN) until February 2017.
“Accordingly, BNY Mellon knowingly participated in, or was complicit in, laundering OneCoin’s criminal proceeds,” the filing reads.
Plaintiffs accuse BNY Mellon on one count of aiding and abetting fraud, as well as one count of commercial bad faith.
In a statement, a BNY Mellon spokesperson said the bank took “its role in protecting the integrity of the global financial system seriously” but, by law, would not comment on any SAR it may have filed with the U.S authorities.
The bank declined to comment on the allegations.
See also: US Moves to Seize $400M From Convicted OneCoin Money Launderer
The amended suit comes days after news source BuzzFeed released thousands of normally secret SARs reports flagging suspect transactions with the authorities.
One particular transaction in 2016 saw $30 million wired from an account belonging to a British Virgin Islands-based company, to BNY Mellon, who then credited it to an account in Hong Kong. While the transaction was allegedly a loan for the purchase of an oilfield, emails seized by the authorities show the loan was never repaid and that $10 million was actually withdrawn by one of the OneCoin founders.
U.S. authorities have already testified, in a separate case, to say that they believe this loan was an example of proceeds from the OneCoin sale being laundered.
David Silver, the founder of Silver Miller, the law firm acting as lead class counsel, told CoinDesk that the FinCEN Files showed BNY Mellon could have and should have taken action much sooner than it did. “The allegations in the lawsuit expose information that Bank of New York knew about the highly-suspicious nature of those OneCoin transactions but failed to act accordingly,” he said.
Ignatova’s brother, Konstantin, was dropped from the class-action filed by Berdeaux and Grablis last month after the two sides reached a settlement.
Read the amended complaint below:
UPDATE (Sept. 25, 12:40 UTC): This article has been updated with comment from David Silver, the founder of Silver Miller, the law firm acting as lead class counsel.