26 Apr 2019

Samoan church implicated in cryptocurrency scam

4:46 pm on 26 April 2019

At least one Samoan church has been implicated in a global multi-billion dollar cryptocurrency scheme authorities say is a fraudulent scam.

The Central Bank of Samoa in the capital Apia.

The Central Bank of Samoa in the capital Apia. Photo: RNZI/ Koroi Hawkins

Samoa's Central Bank on Thursday named the Samoa Worship Centre as one of two churches which may have been used as an investment vehicle for the cryptocurrency OneCoin, also known as OneLife. Samoa in May last year imposed a ban on all transactions using OneCoin amid rising global concerns.

OneCoin had managed to circumvent the ban by funnelling an estimated $US2.3 million through New Zealand, targeting Samoan churches with branches in New Zealand, the Central Bank said.

An IT engineer with the Samoa Worship Centre's Apia-based office told RNZ Pacific on Friday that OneCoin representatives had approached the church and pitched their product to the congregation, which resulted in several people - including ministers - making investments.

"A lot of people in Samoa invested in it, not just the church members. Everybody in the public," said Fono Toluono, adding that he was happy with his investment of around $US1100 in the scheme.

Calls to an Auckland-based branch of the other church named by Samoa's Central Bank went unanswered on Friday.

The Samoa Central Bank's governor, Maiava Atalina Emma Ainuu-Enari, could not be reached for comment but the bank's statement on Thursday said a number of individuals were "currently under scrutiny and potential investigation."

The statement said Samoan Money Transfer Operators had also been implicated and would be monitored, but it did not clarify whether the churches named would be investigated.

The Central Bank said the information was based in part on a 124-page report on OneCoin activities it had received from New Zealand police. New Zealand police could not be reached for comment.

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Photo: AFP

Money laundering carries a maximum penalty in Samoa of 15 years imprisonment, a maximum fine of around $US374,000 or a combination of both.

Alex Sims, a cryptocurrency expert and associate professor at the University of Auckland, said regulators around the world had failed to take action against OneCoin.

"The question's got to be asked - why was nothing done when people have known this was clearly a ponzi scheme for a couple of years?"

The Bulgaria-based OneCoin, which claims more than a million members worldwide, could not be reached for comment out of hours but has maintained its pitch as a safe and reliable investment.

"Transparency is one of the core values of OneCoin and we stand firmly behind this belief," the company said in a March statement.

Its leader, Konstantin Ignatov was arrested in Los Angeles on March 6 on a wire fraud conspiracy charge and has been detained.

In a statement announcing Mr Ignatov's arrest, the US Department of Justice said OneCoin was a "a fraudulent pyramid scheme".

New Zealand's Financial Markets Authority issued a warning in December last year which recommended "extreme caution before investing with OneLife or OneCoin as we are concerned they bear the characteristics of a scam".

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