Double Whammy

Speaker 1: In October 2016, this guy named Bjorn Bjork gets a call from a recruitment agency, and they are hiring on behalf of a cryptocurrency company. The crypto company is a few years old. They've got a pretty big footprint, growing evaluation, and its founder is profiled in all sorts of fancy magazines. There's billions of dollars sloshing around in this thing. And the crypto company needs someone to do this one job, this one really big job.

Speaker 2: Is it steal all the cryptocurrency?

Speaker 1: They needed someone to do this one really big job, and it was to build that large established cryptocurrency company, a blockchain. And the thing about cryptocurrency is that that job description is a really big red flag. It's like a restaurant that would take your money but does not have any food. Like, I don't know what you do, but it isn't the thing that you say you do. So Bjork turns down the job because he, a like cryptocurrency engineer, was capable of seeing this company's like pitch for exactly what it was and what it wasn't. A year later the founder of that company would have vanished, and everyone would be standing around the like, her shaped hole where she used to be, and they would all be either arrested or charged and several convicted, including two just this month, which is why we're talking about it. We call, like, we call a person missing when we don't know where they are, but sometimes when we say a person vanished, we kind of know where they are. They're hiding.

Speaker 2: Yeah. They're somewhere with no extradition trees.

Speaker 1: And this founder, a woman named Ruja Ignatova, the subject of our episode, vanished. This story happened, like, five years ago. A lot of people might know it. I didn't. But we're gonna try and provide a little bit of a primer into the very strange world of 1 coin. This is the double whammy here on Hacked. Okay. What a fuck. So we're talking about OneCoin, Scott. Have you heard about OneCoin?

Speaker 2: I I no. But I've heard about every other fucking Bitcoin heist.

Speaker 1: Okay. So we're actually not talking about a Bitcoin heist. Because a Bitcoin heist is, like that's the classic. Right? It's a person

Speaker 2: Yeah.

Speaker 1: Yeah. Takes all of your they're like, I'll manage your Bitcoin, and then they're managing untraceable things, so they just vanish. Exactly. We're talking about OneCoin. The global footprint of OneCoin is actually pretty hard to, like, calculate how much money was moving around this thing in total. There's, like, a class action lawsuit that uncovered an estimated revenue about 4 and a half billion dollars, but some sources who've worked close to OneCoin say that's way too low. It's probably creeping closer to, like, 20,000,000,000

Speaker 2: That's so insane.

Speaker 1: Which would make it one of the largest, like I don't wanna give away what it is, but the largest things of its kind, essentially.

Speaker 2: Let's call it financial crime.

Speaker 1: Yeah. It's largest crimes of its kind.

Speaker 2: Financial crimes of its kind.

Speaker 1: OneCoin, interestingly, kind of kept going even after OneCoin had ended because of how it was, like, structured and organized. There were still satellites of people keeping this grift grinding forward for years after it collapsed. There's, there's an email pretty early on in this whole thing between Ruja Ignatova, our main character, and her cofounder Sebastian Greenwood that was cited by the justice department where they had a really frank discussion about what they would do if OneCoin, like, collapsed out from under them. And she said that, quote, oh, I would take the money and run and blame someone else,

Speaker 2: which Cut to chapter eight.

Speaker 1: Cut to chapter eight. Yeah. If you choose that path, flip to chapter eight. And if we're talking about running and taking the money and blaming somebody else, we gotta start with, like, maybe the harshest one in this whole story, a guy named Konstantin Ignatova, Rouge's brother. In 2015, Konstantin is living in a little village in Germany where the two of them had grown up. He's living what he described as this, like, nice, quiet, small life he was okay with. He drives a forklift, he volunteers at a dog shelter. All is well for Konstantin in 2015. And one afternoon, his sister Ruja comes knocking. Ruja is the wunderkind of the family. She's this, like, high powered lawyer turned tech tycoon. She'd been on the cover of, like, Bulgarian Forbes. And she'd been riding high on the wave of her latest enterprise, which was a cryptocurrency called OneCoin. OneCoin had made Ruja rich and powerful, and at this point her day to day life looked like her just hopscotching all over the globe, giving these big talks to crazy, cheering crowds, evangelizing the future of her cryptocurrency, OneCoin, and getting more people to invest. And her message was always the same. If those Bitcoin people can do it, why can't you? So Ruja offers her brother a job, more money that he's making now to be her assistant. He's gonna book her flights, carry her bags, and just spend time globetrotting with his sister, who he idolizes in the, like, privileged air of her extreme, extreme wealth. Ruja Ignatova and Sebastian Greenwood, started OneCoin in 2014, and her pitch was that it worked just like any other cryptocurrency. You can mine them. They're used to make payments. You have an e wallet. It's everything you've heard about. And like Bitcoin, the value can go up and down, which means if you buy in now, you could get very rich doing this. And to invest in OneCoin, you would go to an event where they talked about OneCoin, and you would buy a package from the person hosting the event. Each package would include tokens which can be assigned to mine OneCoins. And, like, just imagine air quotes around every word I'm saying because this was sort of how they prevent presented it.

Speaker 2: So, wait, can I just ask? This sounds a whole lot like a multilevel marketing thing. Like, hey. Come to my house. Buy in. We'll kick something up to you. Everybody's part of it. You know, you get your first two coin mines for free. But if you wanna buy more to get rich No.

Speaker 1: Scott, you just you just misunderstand. It's a cryptocurrency.

Speaker 2: Oh, yeah.

Speaker 3: Yeah. Yeah. Yeah.

Speaker 1: And Yeah. Yeah. OneCoin claimed that, OneCoin was mined by servers in two sites in Bulgaria, one site in Hong Kong. It had an exchange called Xcoinx, which was this internal marketplace where you could, exchange OneCoin's for euros. So you you buy in. It it there's a conversion rate, and the conversion rate goes up and down, and you can you can buy out. You can you can get

Speaker 2: your euros back. Client demand. Exactly.

Speaker 1: The euros would be placed in a wallet. You could wire transfer it out. But importantly, the marketplace had daily selling limits based on which package the seller invested in. So Sure. Which acted as, like, a limit on how many one coins you could take out as cash. So you buy a package. It gives you these these sort of coins in a wallet. You can exchange for euros, but only so many at a time. As more people buy in, the value goes up. And within your limit, you can withdraw your profits, and you're you're gonna get rich.

Speaker 2: Every everybody I hear gets rich with Bitcoin, with crypto.

Speaker 1: And every day, these people are going to these events, and they're buying, and they're keeping an eye on the value, and the value is going up on the this there's this little ticker on the site that you could watch. They're all getting rich, and you, the cheering would go, wanna get in now. And that's what all this was, was this whole thing was just shouted into microphones, like, to giant crowds of hollering people. And all you have to do to be part of this is invest, and you're gonna get rich too.

Speaker 2: Get your own Lambo. Start today.

Speaker 1: So her brother, Konstantin, takes this job, and he joins his sister in the OneCoin family, a subsidiary of OneCoin Limited as registered in Dubai and OneLife Network Limited as registered in Belize. Scott, you're a savvy investor, and I know the answer to this. It should be obvious because we're talking about a story on a show called Hacked. I'm not gonna ask if you would invest in this, but, like, have you because I know the answer to that. Also, have you ever found yourself in a high pressure investment situation like this? And if so, how'd that go?

Speaker 2: I well, I got two two sides to that story. One, of course, you always you always end up in something where somebody's trying to sell you something always, and it's funny. It it never goes well with me because I'm stubborn. But the, the but the crypto side of it, I've also seen and and heard, you know, dozens of friends and people that I know that are get excited about crypto. I don't even really know what it is and get all jazzed on the, potential for free money. Like, the recent Dogecoin explosion, like, you know, literally created as a joke. And then all of a sudden, all these people thought they were gonna get filthy rich. And some people did make a lot of money off of Sure. Collecting.

Speaker 1: Lot of Doge millionaires.

Speaker 2: Lot of Doge lot of Doge Lambos.

Speaker 1: So you you you you walked right up to the edge of what this is, and I I have to give away what OneCoin was early. Otherwise, some of the other stuff I wanna talk about turns into spoilers.

Speaker 2: Okay.

Speaker 1: I kinda have to unpack the nature of this rift. And there's a reason Oh, so it's a grift. Calling this one oh, it's a oh, it's a grift, Scott. It's a it's a pretty remarkable grift.

Speaker 2: Everybody has a grift. You know?

Speaker 1: There's a reason I think it's a a double whammy. There's a reason I called it a double whammy.

Speaker 4: K.

Speaker 1: And it's rooted in the language of this whole thing. And it's like you kinda call it this, the language of it, the visuals of these people going to these events where people are championing a life changing financial opportunity.

Speaker 2: Sure. There's a hype man on stage telling you all about how great your life's gonna be. Mhmm. Sounds sounds sounds wonderful. Very trustworthy, I'm sure. A Ponzi scheme,

Speaker 3: as

Speaker 1: I understand, is an investment that fraudulently posts profits to to keep drawing new people in. Correct. And as long as it can continue to bring in more money than investors try to withdraw, it can continue to, like, grow and fester Sure. Till it inevitably pops and hurts a lot of people. A pyramid scheme, as opposed to a Ponzi scheme, offers victims a chance to make money by bringing new people into the scam. And as long as they can keep getting new people coming in under them, it keeps growing. And this, Scott, is a double whammy. Oh my god. It's both. It's pretty impressive. It's pretty remarkable what

Speaker 2: she pulled off. Somebody figured out how to, like, genetically breed the super scam.

Speaker 1: She made Tamako. She she put them she put both together. Okay. So how's the Ponzi scheme? After this was years underway, Rujia Ignatova reaches out to the guy from the start, Bjork, asking him to build her a blockchain. And, like, chronologically, here's what that means.

Speaker 2: K. Wait. Wait. Wait. Let me let me ask that chronological question because I'm now confused by it. Years after OneCoin's existed, she says I need a blockchain. That's cool. Mhmm.

Speaker 1: Yeah. No. It's super cool Yeah. And awesome. All those years, and you've figured this out, that the value of OneCoin had been going up, the little ticker on the site that said what its value was, how many euros you could exchange it it for, essentially, what were in essence the returns of the people who had invested.

Speaker 2: It was strictly based on how many other people had bought in. It was just a made up number?

Speaker 1: It was barely even based on what other people had bought in. It was based purely on what Ignatova and Greenwood set it to. Because there was no blockchain. It was not a that number was not a function of anything. It was just a dial somewhere that they were turning. Oh my god. And when one investor started panicking, and we're gonna talk about her a little bit later, and started reaching out to them and say, like, hey. Can can I see the, like, the the publicly distributed ledger that makes this, cryptocurrency and informs this price? After months of just harassing the person who had, like, wrapped her into it, she finally gets informed that the blockchain is a database inside of an SQL server.

Speaker 4: That's

Speaker 1: weird. Which means that an administrator controls it, which means that a is not a cryptocurrency.

Speaker 2: B is not a blockchain.

Speaker 1: No. And that the rise in value was fully untethered from how many people were buying and selling. She was just sort of making it up, which means the profits are by definition fraudulent. And which is why those buyback limits are so important.

Speaker 2: Sure.

Speaker 1: If you remember earlier, we talked a bit about how you could only take a certain amount of OneCoin out in euros and it was dictated by how many you'd bought. That was essentially a friction mechanism to stop more money from going out than was coming in because that's the thing that makes a Ponzi scheme collapse is when people try and take their money out. So if you limit that as a feature of memberships, you can modulate how much folks can withdraw and you can maintain that growth forever. All pump, no dump. And it's it's quite it's quite clever. It's evil as shit, but it's very clever.

Speaker 2: You gotta be impressed at some level at, like, the creativity of it. Like, granted, it's, like, you know, the same kind of creativity that lots of hackers deploy and, like, break into things, and it's, like, not good

Speaker 1: 100%.

Speaker 2: Not a good outlet for creativity, but it's, like,

Speaker 1: she she managed She's very creative.

Speaker 2: She managed to create something terrible, but but made, like, made one of the most terrible things. I I will say though that, like, in the early days of crypto, I remember it was incredibly easy to buy it and incredibly hard to sell it. And as a crypto investor, Jordan, you might know something about that.

Speaker 1: Yeah. I've got a lot of lost passwords with small amounts of money hiding behind them, but that's new here in North America. It brings us to the other side of the double whammy, which is, how is it a pyramid scheme? This brings us back to those packages that you would buy at that you would buy at these events to buy, you know, a 1 coin. You'd go to this big event, this crazy, like, Tony Robbins TED Talk shit, where person after person goes on stage and they evangelize this investment. Air quotes are back. If you buy in now, you're gonna get rich. The investment comes in these packages and they had different tiers, a couple $100 all the way to like hundreds of thousands. And a feature was that if you sold them, you would get a kickback in the form of more OneCoin, which could in certain volumes, be then, as I said, converted into euros. And same as I'm getting a kickback for getting you to invest, you get a kickback for some getting someone else to invest, and then you get a kickback for all their subsequent investees. Sure. And the more people you get in that, like We all get rich. Triangle shaped business beneath you, you get rich, which, as you called earlier, would actually technically qualify as a multilevel marketing scheme because those are, like, bafflingly legal. Except that the thing that distinguishes a pyramid scheme from an MLM amongst, like, a bunch of really carefully, navigated legal distinctions is that with a pyramid scheme, there's kind of technically no product. You're just bringing people in, paying commission to join into this thing. And if you can keep doing that forever, it keeps growing. And in this case, there is technically no cryptocurrency.

Speaker 2: Well, the lots of lots lots of pyramid schemes have products. Right? Like, they're based on, you know, sale of cosmetics or sale of, you know, food storage containers. I'm trying not to use trademark names here. But but they're they're often they're often connected to selling of things. Yeah. Which is the odd side fact. MLMs are incredibly, predominant in Mormon communities. Didn't know if you knew that based on the size of I didn't actually know that. Families and stuff. Yeah. Apparently, they're very, very predominant in Mormon communities or so I've heard.

Speaker 1: Yeah. There's there's two things that distinguish them. One is the product thing, and that is the legal defense that most MLMs use. The other has to do with how you are compensated, whether or not you are given more money for embroiling more people versus just if you're buying in bulk and then selling to more people who are not actually using the product. Sure. This checks both of those boxes because the the product thing as you brought up, some pyramid schemes have products, but they also will pay people to embroil more people into the pyramid scheme. And the kickbacks technically qualify this as both, which means it is both pyramid scheme and a Ponzi scheme.

Speaker 2: It's a double whammy. Double whammy.

Speaker 1: The thing about both Ponzi and pyramid schemes is that there are inevitably winners and losers. Ruja Ignatova, depending on how you view this, is I call her a winner in all this, but she wasn't the only one. Mhmm. Let's talk about some characters. First, we got Igor Alberts. In May 2015, Igor Alberts gets invited to a OneCoin event in Dubai, where he met a whole bunch of people all apparently making fortunes with this new currency. And Igor Alberts interestingly was a very successful multi level marketing seller. So he went into this knowing the structure of it.

Speaker 2: Sure.

Speaker 1: And it's why I had to kinda spoil already what this ends up being. Ruja makes a really intense impression on him. He's got all the fancy magazine covers and this sort of story she's telling of a financial revolution. Igor is sold. He goes home with a new mission. He tells everyone in his downline. That's the, like, MLM speak for your employees, drop everything else you're selling and start selling 1 coin. Quote, we gathered the teams together and we started to work like crazy. And in the first month, they made €90,000 pretty much out of nothing. Quote from him, bang.

Speaker 2: Quote from him, story? Bang? He just bang.

Speaker 1: He has an energy, man. Like, he

Speaker 2: doesn't really get an energy. Caught that, so I decided to get you to reiterate that. I was like, excuse me?

Speaker 1: You Said bang? Bang. You said bang.

Speaker 2: You yelled bang.

Speaker 1: Right? You did bang. 60% of the income that Igor Alberts made from OneCoin, which at its height was €2,000,000 per month, because he's, again, at the top of an MLM funnel Sure. Was 60% was paid in cash and the rest in OneCoin, which is interesting because he then used even some of the cash he got paid to buy more OneCoin.

Speaker 4: Oh, no.

Speaker 1: And it tells you that, like, this guy at the top of this crazy MLM, you know

Speaker 2: Sure.

Speaker 1: System he's built out for himself, He actually fell for it. Like, he didn't know that the product he was selling was total horseshit. He knew he was at the top of an MLM period, triangle for legal reasons, but he he he thought that 1 coin was real. And he thought that as the value of of it was going up, yeah, sure. I wanna get paid in 1 coin. I'm gonna get rich. And that's what cryptocurrencies do. They they they go up. HODL gang. HODL gang. Igor Alberts, since all of this has fallen apart, has since launched Dagcoin, which for legal reasons, I will not comment on whether or not it is a cryptocurrency or a double whammy or anything else. Then on the flip side of this, there's Jen McAdams. Jen McAdams is a one woman from Glasgow, and she finds herself at one of these seminars in 2016. And the host is talking about, you know, doctor Ruge's glittering background, her Oxford University, her PhD, her work at McKinsey, running tape of speeches she's given, and McAdams is very, very impressed. And she decides to invest a thousand euros at the at this sort of event. They keep kinda pushing her a little bit. Maybe a thousand isn't gonna cut it. The larger packages, you know, they're they're really gonna change your life. So she she said, okay. I'll I'll do €5,000. And they keep pushing, and they keep going. And they get her to do €10,000. And now she so sunk cost in this whole thing that she starts going to her friends and family and gets them to invest a total of about a quarter million euros of their money.

Speaker 2: Woah. She's

Speaker 1: fully in on this thing. And she's just sitting on that site watching that ticker go up and down. And while she was bought in, the value of her €10,000 package crept up past a €100,000, tenfold return. And she starts thinking, oh my god. When I finally cash out of this thing, I'm gonna I'm gonna go on holidays. I'm gonna have these shopping trips. And that is when the crypto nerds show up. Towards the end of the year, Jen McAdams gets contacted by a stranger on the Internet. He's this this crypto guy who'd been studying, studying OneCoin, a guy named Timothy Curry. And he'd been starting to reach out to people who'd invested in OneCoin. He wants to talk to her. And reluctantly, she says, sure. Let's hop on a Skype call. And that Skype call immediately devolves into a very angry shouting match. Woah. Yeah. Curry, who is a Bitcoin enthusiast and, like, an early, you know, cryptocurrency advocate, was on this sort of mission to show people what OneCoin was because he thought that in the early days, it was gonna give Bitcoin a bad Sure. Essentially a bad name. It's it's not actually a cryptocurrency. It's something else, and it's a scam, and you should know that.

Speaker 2: I think the collective amount of fraud that lives in the crypto space has given the root idea of crypto a bad name.

Speaker 1: Mhmm. A 100% it has. And it's like for a guy who just has that sort of philosophical underpinning for why this is good, I get why you would start maybe going out and trying to denounce some of those things. Yep. Curry and Bjork seem like the good guys in all of this. So over the next several weeks, Curry just starts like, he doesn't drop it. He starts sending her all of this information about here's how cryptocurrencies actually work. There's links in YouTube videos. He introduces her to Bjorn Bjorn Bjorn, the blockchain developer from the start of the show Mhmm. Who they reached out to and said, these people don't have a a they don't have a blockchain. There's no publicly distributed ledger. This isn't I don't know what this is, but it's not what it says it is. And it takes McAdam, like, three months to go through all of it, but she starts to, like, develop these questions based on her new understanding.

Speaker 2: Yeah. Yeah.

Speaker 1: She starts reaching out to the leaders of her OneCoin group saying, like, hey. Like, can I see the blockchain? Can I see the ledger? Can I see any of this? And she keeps getting told this is something you don't need to know about. But she keeps persisting till she finally gets this voice mail that I wish I had the table, but I don't in April 2017, where they say, quote, okay, Jen. They don't wanna disclose this kind of information just in case something goes wrong with where the blockchain is being held.

Speaker 2: Oh my god. And plus, yeah,

Speaker 1: as an application, this is when you start, like, sweating if you're hurt.

Speaker 2: You just hit the buy the sell button and

Speaker 1: Yeah. You hit the sell button as fast as you can. And, quote, plus, as an application, it doesn't need a server behind it. So it's our blockchain technology, SQL server with a database. Jen was the person who uncovered that there was no blockchain, that this was all just being run off a database that, Ignatova had admin access to. She cracked it kind of for herself.

Speaker 2: Mhmm.

Speaker 1: And she starts to panic. And she starts to sell, and so do a whole bunch of people.

Speaker 2: Her friends, her family, everybody she knows.

Speaker 1: And while no one has been arrested yet, the authorities are starting to kinda get word about this. The FBI had come by to speak with several of OneCoin's, like, kinda top brass salespeople. Typically speaking, there's one way that these stories tend to end, and it's a bunch of people lose money and the person at the top gets arrested. But Rujie Ignatova is anything but typical. And how this all kind of fell apart right after the break. Starting some new isn't just hard. It can be downright terrifying. You put a lot of work into a thing. You're not entirely sure it's gonna work out. You're taking a huge leap of faith. I've started a few things. Now I know I was right for believing in, you know, the idea, the product, despite all of those fears and hesitations. But boy, does it sure help when you have a partner like Shopify on your side. Shopify is the commerce platform behind millions of businesses around the world and 10% of all e commerce in The US. From household names like, well, hacked podcasts merch, to brands just getting started, you can get started with your own design studio with hundreds of ready to use templates. Shopify helps you build a beautiful online store that matches your brand style. Did I mention that that iconic purple shop pay button that's used by millions of businesses around the world? I don't know why I wouldn't. I should. It's why Shopify has the best converting checkout on the planet. It also helps boost conversions, meaning less carts, sort of getting abandoned in the parking lot, and more sales for you. It's time to turn those what ifs into sign up for your $1 per month trial at shopify.com/hacked. Go to shopify.com/hacked. One more time, that's shopify.com/hacked.

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Speaker 1: So the crypto nerds tried to warn us, but that isn't what brought it down. In March 2017, the Croatian National Bank advised the public to exercise a high degree of caution against OneCoin. In April 2017, the Indian police arrested more than 18 people in Mumbai for organizing a OneCoin event. In April 2017, Germany's Federal Financial Supervisory Authority, issued a cease and desist against OneCoin. In 2017, the Bank of Thailand issued a warning. And all around the world, kind of cumulatively, the noose started tightening around this thing. In 2017, Miss Ignatova sees this, and she starts to make contingency plans. She goes to Kyrgyzstan and Central Asia to get a passport. She had this sense that this thing was starting to kinda get shaky underneath her feet a little bit. She had started to figure out, you know, I think this the authorities are starting to kinda listen to these people like Burke and Curry who were saying, hey. This is a giant scam, and we can really clearly show you how. The authorities were, like, peering over the fence a little bit. But that's still not what made it, you know, fully collapse. What made it finally break is Ruja flinched. Ruja had been planning to elope with a married man named Gilbert Armenta, and she started to get suspicious, and this has nothing to do with OneCoin, that he was stringing her along, you know, like the classic kind of I'll leave my wife for you, but they never do type thing. She thought that was happening to her. Yeah. So as her brother would later explain in court, she had an associate rent the apartment beneath Armenta's Florida, like, you know, pad and drill up through the floor so she could eavesdrop on him and figure out if he was ever actually gonna leave his wife. And what she found out is that he was not secretly still in love with his wife. What she found was that mister Armenta was cooperating with the feds. Armenta pleaded guilty to wire fraud, money laundering, extortion conspiracy charges related to OneCoin, and he'd been cooperating presumably for a lighter sentence into their, you know, investigation into her. She'd been betrayed by this man who, you know, had betrayed his wife to be with her, but she'd been betrayed by her love. And shortly after discovering that mister Armenta was an FBI informant, Ignatova flinches and bolts. She flies to Athens with only her purse and one of her security guards. And from there, she vanishes off the face of the Earth. And her disappearance sparks total panic. The OneCoin community starts to figure out that something is kind of wrong, shortly after she vanishes at this large gathering of European OneCoin promoters in Lisbon in October '27.

Speaker 2: And she's not there. And they're like, wait a second.

Speaker 1: Ruja, famously punctual, kinda, you know, if you're not five minutes early, you're five minutes late kind of person. Yeah. She does not show up at all. One coin leaders start freaking out. They hire a private investigator to find her, but no one can find Ruja Ignatova if Ruja Ignatova doesn't want to be found. And so, after a couple of months, our original character, Konstantin Ignatova, her brother, who'd been hired a few years prior just to be her assistant, becomes the public face of OneCoin. He starts going up on stage at these events to tell all of OneCoin's evangelists that, you know, this is fine. It's okay. I'm in touch with her. There's nothing wrong. This is it's all conspiracies that the feds are looking into us. It's all it's all fine. But and it kinda just goes to show you how important the cult of personality is to these things. Sure. No one buys it. He's this, like, heavily tattooed mixed martial arts aficionado. He just doesn't have the same, like Panache. Vibe that she exactly. He's not the Forbes cover tech tycoon type. He's something else, and it doesn't it doesn't sell the story in the same way. And these investors start getting really, really anxious, and they start wanting their money back. For a normal person like Jen McAdams, wanting her money back, you know, tough. You're the victim of a scam. But some of those investors are dodgy. Mister Natova later later said in court that he was kidnapped at gunpoint and taken to the suburbs of Bulgaria's capital where they beat the living crap out of him and snapped some fingers. He was told, if Ruche disappeared with the money, that these people were gonna come back and kill him. A couple months later, British showed that he was called from a man identifying himself as a high ranking member of the Hells Angels saying, you come to Zurich right now. And when he gets there, they take him into a building, shove a gun in his mouth, and threaten to kill him if he doesn't get their money. By the time he flies to San Francisco in February 2019, law enforcement agents were questioning him about his intentions in The US. They take his cell phone. They let him in, but he's he's rattled. He knows that this isn't gonna last much longer. He tosses his laptop into a trash can on the Las Vegas script because he's he's scared its contents would be used against him. And he was right. Two days later, miss Mr. Natova is arrested at LAX. It's right at that same time, two years after she vanishes, that The US authorities finally give up on this idea that they're ever gonna find her, and they charge Ruja Ignatova in absentia for wire fraud, security fraud, and money laundering. In the two intervening years, OneCoin had kind of, like, limped along, essentially getting handed from one soon to be arrested person to the next. At one point, Rouge's mother stepped up on stage to try and get more people to invest.

Speaker 5: And it

Speaker 1: wasn't until 2019 that the European domains were pulled and OneCoin finally went down. They finally stopped it from spreading. And as I said at the top of the show, because of its, like, global footprint, it's hard to know exactly how much victims pumped into this thing because it was cash based based on an MLM model, and it spread internationally.

Speaker 2: And if your compensation was based on on like, if you were being paid or if your investment returns or your gains on your on your triangle came to you in the form of more OneCoin. You know, aside from just the actual cash problem, the, like, you know, lost economic value of it would be probably monstrous.

Speaker 1: Not far from the Rwanda border in Uganda, a 22 year old Daniel Linehart scraped together the 700,000 Ugandan shillings. It's like 250 USD that he needed to buy into OneCoin. He would go on to convince his entire family to invest the 3,000 USD they'd spent decades saving to open up a shop to instead put that money into OneCoin. This is after 2017 when this has all started to fall apart. And that investment is now worth nothing. And it's interesting to look at the sort of charts here where in Europe, at the start of 2017 versus 2016, when it started to collapse, there was less money invested. After the collapse begins, less money goes in. But in Africa, The Middle East, and the Indian Subcontinent, it's the other way around. Even after this thing had started to collapse in the West, more money was going into it year over year. Sure. They moved it. There are a whole bunch of theories as to where Ruja is now. A really weird, like, OneCoin beauty pageant that was held in Bucharest in 2017 seemed to maybe point in that direction. We know she spent her childhood in Germany. There's a steelworks factory where she did a different grift years prior in Bavaria. She might have been there. The the BBC who did this really incredible deep dive we'll talk about later flagged Frankfurt as probably a likely destination based on family ties. But with the funds that she siphoned off of OneCoin, she could really be anywhere. But her brother and her cofounder and her lawyer and a bunch of other OneCoin evangelists who got just high up enough the food chain to peer in and see how this worked are currently grinding their way through all manner of wire fraud charges and legal woes, including someone just this month, a guy named David Pilch, and those charges are still rolling in. You can really only charge someone in absentia so much before it starts to feel kind of futile. This has been a, like, pretty well told story in the media. It's fascinating to learn about. There's and I think it's gonna be kind of a a story over the next year or two. There's a book that was written by McAdams. I actually believe that's being turned into a film next year. Kate Winslet's gonna play Ruja. Probably gonna be awesome. Yeah. And if you did find it interesting, there's a really wonderful BBC serialized show that's the super deep dive into it. They they go to all these places. They talk to everybody. It's a really cool, really cool series and worth a listen. We talk about social engineering a lot on this show, and it's there that the line between kind of typical hacking stories and plain old, like, con grifty stories gets kind of blurry. Right? And every person who set foot into these seminars was engineered in really fascinating ways. And some of it was Ruja's doing, because she was clearly an architect of these sort of engineering feats. And some of it was done for her by the time that people showed up. Every single person who set foot in that building had spent years hearing about Bitcoin millionaires and crypto investors making it big, and they were primed to feel the emotion at the heart of every Ponzi scheme and pyramid scheme, which is if they can do it, why can't I? And with that kind of ringing loud enough in your ears, and maybe not the best understanding of what cryptocurrency is or supposed to be or why other people bought into it, that message at that volume could be pretty compelling. And Ruja did none of that. That was all done for her. She built her social engineering on that foundation. That Forbes cover, the one that they would, like, project on the wall and have big canvas copies of and it was printed on every single little brochure that went out, it was an advertorial. She just paid for it out of pocket. And her whole backstory was kind of an advertorial. Between the like stints at prestigious law firms, she was just embroiled in grifts and cons that she sort of just, like, made go away by clever PR, including another faux crypto scam three years earlier. But all of it just primed those people for this mass social engineering feat. It set them up to hear this story about how they could get rich too. It set them up for the double whammy. Patrons on Patreon, this one is for you. They're all for you. Kyle Jenkins. So happy to have you here. Patreon user twenty twenty ever forget, thank you. I owe you a reply to your message. Benjamin White, thank you. Andrew Armington, thank you. Torben Storm Jensen, cool name. Thanks. And hardwired. Hardwired for greatness. Thank you. If you like this story, Case of the Missing Crypto Queen by the BBC is a great deep dive. It was a huge inspiration for this. I incorrectly referred to Jen McAdams a couple times there. My apologies. Thank you for listening, everybody. Really appreciate you being here and excited to be back for the next one.

Speaker 4: I'm Gwen Washington, host of Snap Judgment, the award winning storytelling podcast from KQED. And every week, Snap deals a new card, like jumping on Rihanna's private plane or the accidental bank robber or even the man who was swallowed by a hippo. What? Pick a card, any card. Tap to listen now to Snap Judgment from KQED on Spotify.

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