Bank Fraud & Crypto Scams

I’m going to take you on a journey around the world in this story. We will start in Georgia, and travel to Australia, Bulgaria, Florida, Texas, New York, and the UK (though not necessarily in that order).

This past November JSC Capital Bank had its licence revoked by the National Bank of Georgia (the country’s Central Bank). Capital Bank was not that big of a player on the market, making up only 0.35% by assets as of 30 September 2016, or 16th out of only 17 banks.

According to KPMG Georgia,

“The NBG Auditing process detected that the bank had ignored requirements for prevention of legalizing illegal revenues, as well as various facts of violation of NBG regulations, resolutions and instructions.”

40% of the bank was held by Georgian Merab Chikhradze through a shell company registered in the British Virgin Islands.

Chikhradze is a partner in a plan to build a hotel in the old Agricultural Ministry building near Heroes Square. The building has been boarded up ever since I arrived here four years ago, with signage indicating that a hotel is planned for the site. I did see some people in hardhats wandering around the outside of the building recently, but no work appears to be happening.

Chikhradze’s own social media activity also shows that he has franchised with LafargeHolcim in the cement business here in Georgia. A new cement factory was opened in Poti this past October.

The remaining 60% of Capital Bank was bought in late 2015 by Netherlands registered ESOL BV. ESOL is controlled by a 54 year-old American citizen located in Florida, Gilbert Richard Armenta. Armenta has at least 15 companies registered in Florida alone. He has also been involved in court cases in the US since at least 2009 for a scheme he ran with his Florida registered private equity firm E Oliver Capital Group Inc. He was sued in Texas by Huawei for breach of contract. Huawei eventually won a judgment in 2012 of about $4.2 million, though whether they were able to recover any of it is unclear. Another 2012 judgment in New York found that Armenta and EOCG owed $37.5 million (this sounds like some form of the onward loan scam that I’ve written about here before, but it is hard to tell for sure from the article I linked to… if somebody wants to correct me on this, please feel free).

ESOL BV is also the holder of about 9% of Australia’s BlueNRGY Group Ltd. The company is currently facing a class-action lawsuit which alleges that “…BlueNRGY issued materially false financial statements during the Class Period” [June – October 2014]. BlueNRGY’s chairman, William C Morro, was also a member of the board at Capital Bank.

Shortly after Armenta & ESOL appeared on the scene as “investors” in Capital Bank, the ponzi scheme, OneCoin, also appeared in connection with the bank. The association officially only lasted about a month, before the company moved to an account with US based TD Bank. Both the address and the company associated with the TD account are Armenta’s in Fort Lauderdale, Florida. It is also the US address used by BlueNRGY.

OneCoin bills itself as an alternative to the increasingly popular cryptocurrency BitCoin. An interview with OneCoin’s Ruja Ignatova explains the background and what they are allegedly trying to do with it.

 

Ignatova claims to have worked for McKinsey for 5 years, after studying at Oxford in 2004.

However, in September last year, the UK’s Finance Conduct Authority issued a warning to consumers regarding the scam, writing:

We believe consumers should be wary of dealing with OneCoin, which claims to offer the chance to make money through the trading and ‘mining’ of virtual currencies.

They also warned that:

As OneCoin is not authorised, consumers who deal with it will have no protection from the Financial Ombudsman Service or the Financial Services Compensation Scheme.

An article in July had a takedown of OneCoin, explaining how the scheme works, and why it is not in fact a legitimate form of crypto-currency.

Another discussion on the scam referenced Mavrodi’s MMM scam that ran throughout the 1990s in Russia (which I have written about here).

Meanwhile, the story of OneCoin continues to play out in Bulgaria, with investigative journalists there following Ignatova’s activities there (though unfortunately, still only in Bulgarian).

View story at Medium.com

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2 thoughts on “Bank Fraud & Crypto Scams

  1. Pingback: Addendum – Nina Jobe

  2. Pingback: Zambia – Nina Jobe

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