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03.22.17

Jury Convicts Two in Bitcoin Laundering Scheme

Bitcoin_criminal_p87In a case with connections to the massive 2014 JPMorgan Chase data breach, a New Jersey pastor and a Florida software programmer were found guilty of helping launder virtual currency that was obtained from drug sales and ransomware hacks.

On March 17, a jury in U.S. District Court in New York found the men, pastor Trevon Gross and coder Yuri Lebedev, guilty of bribery and conspiracy to commit fraud. Lebedev also was found guilty of wire fraud and bank fraud. They face up to 20 years in prison when sentenced in July.

The charges against the men involve Coin.mx, an illegal bitcoin exchange run by Lebedev along with Anthony Murgio and his father Michael Murgio, and other partners. Between 2013 and 2015, the men set up bank accounts to process $1.8 million in bitcoin obtained from drug sales and ransomware attacks, disguising the transaction records to make it appear as though the funds were coming from credit and debit cards. The Coin.mx operators then approached Gross, who ran a small credit union through a church in New Jersey, according to prosecutors. They paid Gross $150,000 in exchange for giving them seats on the credit union’s board of directors and enabling them to funnel millions of dollars of transactions through the institution. The Murgios agreed to a plea deal with prosecutors, but Gross and Lebedev contested the charges and went to trial, which began in February.

The scam was discovered during a probe related to the 2014 breach at JPMorgan Chase, which exposed the personal data of 76 million households and 7 million businesses. Another operator of Coin.mx, Gery Shalon, was accused of using customer data obtained in the Chase breach to run a pump-and-dump scheme to increase the price of low-value stocks he held before selling them off. Shalom was extradited to the U.S. from Israel in June 2016 and is expected to be tried for both the pump-and-dump and Coin.mx scams soon, according to reports.

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