Six convicted of running $10 million illegal money exchange.
Anthony Murgio knowingly operated Coin.mx, an unlawful internet-based bitcoin exchange. The company was accused of processing more than $10 million in illegal bitcoin transactions. Murgio said that he ran Coin.mx for Gery Shalon, the founder of the criminal enterprise. Murgio ran the exchange for several years together with his co-conspirators Jose Freundt, Ricardo Hill, Yuri Lebedev and his father, Michael Murgio. Coin.mx enabled its customers to exchange cash for bitcoins, charging a fee for their service.
The group created a front company named “Collectables Club,” and used this front company to distract attention away from their illegal bitcoin exchange. They pretended that their operation was a members-only association of individuals who discussed, bought, and sold collectible items and memorabilia. The group deliberately misidentified and miscoded Coin.mx customers’ credit and debit card transactions.
The group later took over the Helping Other People Excel Federal Credit Union (HOPE FCU), with the help of its former Chairman and Chief Executive Officer, Trevon Gross. Together, they processed tens of millions of dollars of Automated Clearing House (ACH) transactions through the credit union, without adequate controls. At Gross’ direction, Murgio paid more than $150,000 in bribes to accounts under Gross’ control. Gross installed Murgio and Lebedev on the HOPE FCU board and moved Coin.mx’s banking operations to HOPE FCU. The perpetraitors paid $162,000 in “donations” and “consulting fees” to a local church, in a corrupt deal to take control of the credit union, and processed more than $60 million in transactions for their illegal activities.
Coin.mx was accused of being involved in the hacking at least nine companies including JPMorgan Chase, E*Trade, and Dow Jones & Co. Prosecutors said the unregistered business sold bitcoins that were used in illegal online transactions and as payment in ransomware attacks. The group knowingly enabled criminals responsible for the ransomware attack to receive proceeds of crime, and never filed a suspicious activity report for the violation of federal anti-money laundering laws.
Anthony Murgio was sentenced to 5.5 years in prison and three years of supervised release. Michael Murgio received one year probation and a $12,000. Gross, Freundt, Hill, and Lebedev are still awaiting sentence.
Increase in Illegal Drug Trafficking, Increase in Money Laundering
Anthony Murgio, Cryptocurrency Fraud, Money Laundering