NEW YORK–An indictment against two men who operated a Bitcoin exchange here alleges those charged took “control” of a small credit union for use in an illegal enterprise.
The indictment against Anthony R. Murgio and Yri Lebedev, who operated Coin.mx and which charged consumers a fee to exchange Bitcoins for cash, charges the two with operating an “unlicensed” money service business (MSB) and failing to file any suspicious activity reports on Bitcoin exchange transactions.
According to the FBI, the criminal complaint said the two men used a federal credit union for purposes of their scheme, which involved using a phony front company. While the credit union was not named in the FBI statement, other authorities have said it is the $291,000 Helping Other People Excel (HOPE) Federal Credit Union Jackson, N.J. Both men were arrested at their residences in Florida.
According to the allegations contained in the criminal complaints unsealed in Manhattan federal court, since at least late 2013, Murgio, Lebedev, and their co-conspirators have knowingly operated Coin.mx, a Bitcoin exchange service, in violation of federal anti-money laundering (AML) laws and regulations, including those requiring money services businesses like Coin.mx to meet registration and reporting requirements set forth by the United States Treasury Department. Through Coin.mx, Murgio and Lebedev knowingly exchanged cash for people whom they believed may be engaging in criminal activity.
In total, the indictment said, between approximately October 2013 and January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, the FBI said the two men and their co-conspirators engaged in substantial efforts to evade detection of their scheme by operating through a phony front-company, “Collectables Club,” and maintaining a corresponding phony “Collectables Club” website. In doing so, they sought to trick the major financial institutions through which they operated into believing that their unlawful Bitcoin exchange business was simply a members-only association of individuals who discussed, bought, and sold collectable items, such as sports memorabilia, the FBI said.
“More recently, in an effort to evade potential scrutiny from these institutions and others, Murgio obtained beneficial control of a New Jersey-based federal credit union, which served primarily low-income local residents,” the FBI said. “Murgio then installed Lebedev and others on the credit union’s board of directors, and transferred Coin.mx’s banking operations to the credit union, which Murgio, Lebedev and other co-conspirators operated, at least until early 2015, as a captive bank for their unlawful business. At that time, after discovering that substantial payment processing activity was being conducted through the credit union, the National Credit Union Administration forced the credit union to cease engaging in such activity, and Murgio thereafter found new, overseas payment processing channels for his unlawful business.”
NEW YORK–An indictment against two men who operated a Bitcoin exchange here alleges those charged took “control” of a small credit union for use in an illegal enterprise.
The indictment against Anthony R. Murgio and Yri Lebedev, who operated Coin.mx and which charged consumers a fee to exchange Bitcoins for cash, charges the two with operating an “unlicensed” money service business (MSB) and failing to file any suspicious activity reports on Bitcoin exchange transactions.
According to the FBI, the criminal complaint said the two men used a federal credit union for purposes of their scheme, which involved using a phony front company. While the credit union was not named in the FBI statement, other authorities have said it is the $291,000 Helping Other People Excel (HOPE) Federal Credit Union Jackson, N.J. Both men were arrested at their residences in Florida.
According to the allegations contained in the criminal complaints unsealed in Manhattan federal court, since at least late 2013, Murgio, Lebedev, and their co-conspirators have knowingly operated Coin.mx, a Bitcoin exchange service, in violation of federal anti-money laundering (AML) laws and regulations, including those requiring money services businesses like Coin.mx to meet registration and reporting requirements set forth by the United States Treasury Department. Through Coin.mx, Murgio and Lebedev knowingly exchanged cash for people whom they believed may be engaging in criminal activity.
In total, the indictment said, between approximately October 2013 and January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, the FBI said the two men and their co-conspirators engaged in substantial efforts to evade detection of their scheme by operating through a phony front-company, “Collectables Club,” and maintaining a corresponding phony “Collectables Club” website. In doing so, they sought to trick the major financial institutions through which they operated into believing that their unlawful Bitcoin exchange business was simply a members-only association of individuals who discussed, bought, and sold collectable items, such as sports memorabilia, the FBI said.
“More recently, in an effort to evade potential scrutiny from these institutions and others, Murgio obtained beneficial control of a New Jersey-based federal credit union, which served primarily low-income local residents,” the FBI said. “Murgio then installed Lebedev and others on the credit union’s board of directors, and transferred Coin.mx’s banking operations to the credit union, which Murgio, Lebedev and other co-conspirators operated, at least until early 2015, as a captive bank for their unlawful business. At that time, after discovering that substantial payment processing activity was being conducted through the credit union, the National Credit Union Administration forced the credit union to cease engaging in such activity, and Murgio thereafter found new, overseas payment processing channels for his unlawful business.”