Ex-council employees among those embroiled in alleged global scam
- Credit: Archant
A former youth worker at Tower Hamlets Council is among the people flagged up to City of London Police in connection with an alleged global marketing scam.
Mohammed Aklim Uddin Saleh Ahmed, known as Saleh Ahmed, apparently persuaded at least six local investors to fork out tens of thousands of pounds as a promoter selling investment packages in a digital currency called OneCoin, according to a series of documents seen by the Advertiser.
Mr Ahmed, 46, from Ilford, also set up an unregistered charity linked to OneCoin and tried to take in donations but was later dissolved after being reported to the Charity Commission.
He instructed a group of investors to recruit others into the scheme, later telling the principal investor to lie to her bank if she wanted to retrieve any of the £52,400 she paid to him and an associate, the investor told the Advertiser.
He recently returned to London to promote a new, similarly-structured scheme in Bethnal Green, along with another ex-OneCoin promoter.
Action Fraud has confirmed it received a complaint in relation to the case in mid-2017.
A spokesperson said: “A report was disseminated to the City of London Police on June 26, 2017 for intelligence purposes.
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“As in this case, reports that can be linked are often grouped together to provide collective intelligence which can assist officers in building up the wider intelligence picture.”
OneCoin was launched in 2014 as part of wider business network, OneLife. It was touted as a cryptocurrency to rival BitCoin and took in up to $4bn in investments, but still officially has no value.
It is now alleged to have been a huge pyramid scheme and is banned in several countries, with dozens arrested in China and Singapore in the past year.
Last month the co-founders were indicted by a US District Attorney and one of them, Konstantin Ignatov, has been arrested and charged with conspiracy to commit wire fraud.
“I was naïve”: Layla’s story
Layla Begum, who is in her 30s and lives in Poplar, parted with 20 years of life-savings after going to a OneCoin networking event on September 3, 2016.
More than 1,000 people attended the rally at a hotel in Aldgate, with some of the then-top promoters offering visitors a range of investment packages costing between £100 and £28,000.
Ms Begum said that the investors were told, they would buy them ‘tokens’ that could in theory later be exchanged or “mined” to get OneCoins, which could then be used to buy products and services or exchanged for other currencies.
Investors were told the earlier they invested the greater the eventual pay-out, and they would receive rankings called Ruby, Emerald or Diamond for drawing in more investors.
Ms Begum, who also worked in children’s services at Tower Hamlets Council between 2005 and 2014, told the Advertiser she was convinced because of her 12-year friendship with Mr Ahmed.
She said: “The presentation was amazingly attended by 1,000 people who were immaculately dressed and very professional, selling a dream.
“I was comforted by the presence of other Muslims. They said it was Shariah-compliant and halal [permissible in Islam] and legit. I thought I was just uneducated in cryptocurrency.”
A certificate shown at the event, and seen by the Advertiser, states that a OneCoin product had been declared Shariah-compliant by the Pakistan-based AlHuda Center of Islamic Banking and Economics.
However, in a statement issued on November 28, 2016, AlHuda later retracted the certificate “due to the violation of term [sic] of certification and non-compliance of the guidelines”.
A Bradford-based Islamic organisation, The Olive Foundation, also published research into OneCoin in November 2016, concluding it was not permissible in Islam.
Ms Begum told the Advertiser that on Mr Ahmed’s instruction she paid a total of £21,700 in four transactions to Mr Ahmed and £32,500 in seven transactions to Shoaib Ghouri, another OneCoin promoter based in Ilford.
Ms Begum said she has never met Mr Ghouri and he did not respond to our requests for comment.
In a message to Ms Begum on October 4, 2016, Mr Ahmed told her: “You will be one of my Diamonds in my team.” On October 7, he added: “I’m going through all your accounts. The coins have doubled… €36,703 already sitting in your account… €66,921. Al Ham Du Lillah [thanks be to God].”
In November, when Ms Begum began asking to cash in on her ‘tokens’ she came up against a litany of error messages on the OneCoin website.
She told the Advertiser: “Then I started educating myself about cryptocurrency and trading, and I realised a few months in that there was no scheme. I started approaching the leaders and they told me to be calm.”
Throughout late 2016 and early 2017 she tried to contact the management and was finally told in March 2017: “No refunds will be made after the IMA [investor] has logged in to his/her account. By logging into his/her Onelife Network account it is considered that the IMA is accepting the terms and conditions and no refunds shall be made.”
Between February and May 2017 Ms Begum sent Mr Ahmed a series of messages to say she was “extremely distressed” and begging for her money back.
In WhatsApp messages seen by the Advertiser, he told her: “I am not returning your money from all the big packages from my pocket. The rest has to be raised from selling.”
Then in a subsequent message, he said: “Your £32,500 to Shuhaib’s account… There is a way you can have that back instantly. You have to lie though. You have to say your bank you didn’t do that transaction. And only just realized that someone took it out. Or the other option is wait till the accounts are sold.”
Two years later, Ms Begum told the Advertiser she has no expectation of ever seeing the £54,200 again.
She said: “I made a mistake trusting somebody with 20 years of life savings, my money for a down-payment on a property. This was all brand new to me. I’m accountable. But I believed it was genuine.
“There are other Bangladeshi people stuck in that scheme. People don’t want to take ownership because the reality is losing money and being fooled.
“In Tower Hamlets we have an under-educated community that doesn’t know anything about cryptocurrency or finance and follow everything told to them.”
OneCoin: What is it, and what happens now?
Mr Ahmed is among a number of people in East London known to have promoted OneCoin since it first came to the UK.
The scheme was launched in 2014 by Bulgarian nationals Ruja Ignatova and Konstantin Ignatov and touted as a “new age” cryptocurrency that would be open to all.
The founders claimed the first coin was “mined” in 2015 and at one stage said it was making 300 millionaires a year. But an indictment released by the US Department of Justice in March this year called it “an old scam with a virtual twist” that had been “defrauding investors out of billions”.
FBI Assistant Director-in-Charge William Sweeney Jr said: “As we allege, OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. It offered investors no method of tracing their money and it could not be used to purchase anything.”
Mr Ignatov, 33, was arrested on March 6 this year at Los Angeles International Airport and charged with conspiracy to commit wire fraud.
Ms Ignatova, 38, of Sofia, Bulgaria, remains at large and is charged with wire fraud, conspiracy to commit wire fraud, securities fraud, and conspiracy to commit money laundering.
Former partner Mark S Scott, 50, was also arrested in February, accused of laundering around $400m in OneCoin proceeds through hedge funds in the Cayman Islands. Mr Scott has pleaded not guilty to these charges and the trial is not due to begin until September 2019.
Scores of other people have been arrested in connection with OneCoin participation in recent months, with two people arrested in Singapore in March and China prosecuting 98 people last year, along with investigations into 20,000 bank accounts and 200 related shell companies. At least 35 people have also been arrested in India.
OneCoin is not banned in the UK but the Financial Conduct Authority issued a warning about it as far back as 2016, stating: “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.”
Last December the FCA confirmed it was investigating 18 businesses involved in the sale of cryptocurrencies.
In statements periodically posted on the website OneCoin continues to insist it is a legitimate currency, with an update published in January stating it was “is only a step closer to being listed on an exchange” – that is, to having a value – and adding: “We are almost in a position to give merchants what they have been promised and even more.”
The latest update, dated March 12, read: “Mr. Ignatov has not been formally charged with a crime and is entitled to a presumption of innocence.”
The OneCoin press team did not respond to a request from the Advertiser for comment.
Saleh Ahmed appeared in promotional material for OneCoin throughout 2017, having met his own “mentor” in Wembley in June 2016.
In group WhatsApp messages seen by the Advertiser he also instructed his recruits to bring in a set number of new investment packages every month.
The 46-year-old formerly worked in the rapid response team in the children’s services department of Tower Hamlets Council.
He was the subject of a disciplinary report in October 2017 after a whistleblower raised concerns about his conduct with the council.
Internal correspondence dated November 2017 and seen by the Advertiser states: “I can confirm that Saleh Ahmed does work for the council and there has been an earlier allegation regarding OneCoin.
“In light of the ongoing City of London investigation, we will not launch a separate investigation, though we will support the police in any way we can.”
When approached by the Advertiser for comment, a Tower Hamlets Council spokesman said: “It is not appropriate for the council to comment on individual employee records.
“However, we have well-established procedures in place to respond to allegations made about the conduct of council staff.”
In March 2017 a company called As-Sabur Global Limited was registered with Companies House, based in Ilford and with Mr Ahmed named as the director.
In a promotional YouTube video dated July 12, 2017 he appears alongside OneCoin founder Ruja Ignatova against a backdrop emblazoned with the logo of the OneLife Foundation.
As-Sabur is described as a “charity” that aims to “enhance the lives” of “orphans, elderly, child victims of human trafficking, children born with a disability and women subject to domestic violence”.
The video encourages viewers to donate and includes Mr Ahmed’s mobile number and bank details.
In the video Mr Ahmed tells viewers: “I have been a youth worker since I was 14 for the London Borough of Tower Hamlets in the UK, where I have been helping young people on the streets who are subject to violence, influenced by drugs and alcohol, and anti-social behaviour.
“This inspired me to educate and empower young people and also the elderly, as I have also been a social worker.”
In the video, Dr Ignatova says: “We believe giving back is something extremely important. What impressed me about the charity is that it targeted the weakest of the weakest in society.”
A Charity Commission spokeswoman told the Advertiser: “As-Sabur Global Limited is not registered with the Commission and has not made an application to register as a charity.
“We received a complaint about the organisation in 2017 and, after careful assessment, determined that there was no regulatory role for the Commission.”
The charity was subsequently dissolved in November 2018.
Mr Ahmed, who until recently was travelling outside the country, returned to London in mid-March to host an event in Vallance Road, Bethnal Green, promoting a new initiative: Cloud Horizon Limited.
The new company was registered in the Cayman Islands this year and the CEO is Frank Ricketts, another ex-OneCoin promoter.
It is described on its website as “a Global company that believes in giving anyone and everyone an equal opportunity to better themselves financially”.
It offers affiliates the chance to invest in “tokens” by buying investment packages costing between €165 and €5000, with commissions then paid when they recruit new investors.
Mr Ahmed and Mr Ricketts did not respond to requests for comment.