The main thrust of the bulletin, dated May 1, is that criminals and foreign adversaries of the U.S. “likely” use hedge funds, private equity and other investment vehicles to circumvent financial institutions’ anti-money-laundering (AML) procedures.
One of the four examples given by the FBI analysts involves a “fraudulent cryptocurrency investment scheme.” While the scheme is never named, the story told in the bulletin bears a striking resemblance to the OneCoin case.
- The FBI says “an identified former partner of a major U.S. law firm assisted others in laundering more than $400 million” in proceeds for the unnamed scheme. In November of last year, Mark Scott, a former partner at Locke Lord, was convicted of laundering that much on OneCoin’s behalf.
- The unnamed lawyer in the FBI memo moved the funds through “a series of purported private equity funds holding accounts at financial institutions, including those in the Cayman Islands and the Republic of Ireland.” Prosecutors described such maneuvers by Scott in those same jurisdictions.
- “The underlying source of funds, the perpetrator of the cryptocurrency scheme, was not disclosed to the bank during the initial due diligence review,” the FBI bulletin says, not naming the bank. Prosecutors accused Scott of hoodwinking the Bank of Ireland in this same way.
The FBI cited public information as well as “a human source with direct access” in its account. The bulletin's other three examples of money laundering through private funds do not mention crypto.
Reuters first reported on the bulletin Tuesday. The bulletin is unclassified, but “law enforcement sensitive,” meaning it’s not supposed to be shared outside the federal government without FBI permission.
Read the full memo below.
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