Bitcoin Money-Laundering Scheme Tops 2015's Unusual Crime List
One of the more unusual financial crime stories of the year concerned two men who were charged with operating an illegal Bitcoin exchange through a now-shuttered New Jersey credit union.
As reported in late July, the two suspects -- Yuri Lebedev and Anthony Murgio -- were arrested by the Federal Bureau of Investigation for allegedly running an unlicensed Bitcoin exchange for the purposes of money laundering.
The two Florida-based men ran a Bitcoin exchange through a phony front-company and a small New Jersey credit union that Murgio took control of for the scheme, according to the FBI.
That credit union was identified as Helping Other People Excel (HOPE) FCU of Jackson, N.J.
The FBI alleged that since late 2013 — and perhaps before that time — the pair operated Coin.mx, a Bitcoin exchange service that enabled co-conspirators and customers to pay a fee to exchange cash for Bitcoins. "In doing so," an FBI release said, "they knowingly exchanged cash for people whom they believed may be engaging in criminal activity."
The duo are also said to have exchanged cash for Bitcoins for victims of cyber-attacks involving ransom money. Furthermore, Murgio and Lebedev "knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, Murgio never filed any suspicious activity reports regarding any of the transactions."
Coin.mx exchanged at least $1.8 million for customers between October 2013 and January 2015, along with transferring hundreds of thousands of dollars to accounts in Cyprus, Eastern Europe and Hong Kong, as well as receiving hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands.
To evade potential scrutiny, the FBI said Murgio obtained beneficial control of HOPE FCU and is alleged to have installed Lebedev and others on the credit union's board and transferred Coin.mx's banking operations to the credit union, which served as a captive for their business until early 2015.
Also, according to the FBI, the National Credit Union Administration discovered in early 2015 that substantial payment-processing activity was being run through the credit union and HOPE FCU was forced to cease that activity. However, Murgio subsequently found other overseas payment channels.
Murgio and Lebedev were each charged with conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money transmitting business, each of which carries a maximum five-year prison sentence. Murgio has also been charged with money laundering — a maximum 20-year sentence — and willful failure to file a suspicious activity report, which carries a maximum five-year sentence.
In early August, Murgio, appeared in a federal court in New York. According to court documents, he was freed after posting $100,000 bail.
In mid-November, Murgio pled not guilty following a superseding indictment. His next trial date was set for Oct. 31, 2016, according to court documents.
Reuters reported in early December that Lebedev pled not guilty in Manhattan federal court following the issuance of an indictment related to illegal money transactions at Coin.mx. That indictment alleged that some $247,000 in payments were made to an unidentified executive of the aforementioned credit union between May and December 2014. Such payments involved two different bank accounts and an unidentified middle man.
Court documents state that Lebedev is next scheduled to appear at a "status conference" on March 4, 2016.
NCUA liquidated HOPE FCU last month after having placed the institution into conservatorship on Oct. 16. The agency made the decision to liquidate the credit union and discontinue operations "after determining it was insolvent and had no prospect for restoring viable operations." NCUA further noted that the credit union served 110 members and had assets of $626,000.
Lebedev still has an active LinkedIn account in which he is described as "Principal Software Architect" for a company called BigTree Solutions in the Tampa/St. Petersburg, Fla. area. BigTree's website states that it provides "software for restaurant delivery services."
The account claims he has been employed at BigTree since January 2015 and that prior to that date he worked as "Lead Java Architect" at HOPE FCU between October 2014 and January 2015.
As for Murgio, his active LinkedIn account states that he is the founder of a company called Instamanager.com of Tallahassee, Fla. Murgio's profile claimed he owned the company for two years before selling it in July 2010.
His account further claims that he owned an eatery called the "101 Restaurant" for six years until 2011 and that it was "one of the most popular dining destinations in Tallahassee." Murgio commented on his profile that in unloading the restaurant he "trusted the wrong people and was not paid" and that he is "currently in the process of trying to reclaim this business."
Otherwise, Murgio's LinkedIn account makes no mention of HOPE FCU.