Crypto Exchange Owner Sentenced to 10 Years in Prison for Multimillion-Dollar Scheme to Defraud AmericansJanuary 15, 2021
The U.S. has sentenced a cryptocurrency exchange owner to 10 years in prison. He “knowingly and intentionally engaged in business practices designed to both assist fraudsters in laundering the proceeds of their fraud and to shield himself from criminal liability,” the Department of Justice alleges.
Crypto Exchange Owner Sentenced to 10 Years in Prison
The U.S. Department of Justice (DOJ) announced Tuesday that a bitcoin exchange owner has been sentenced to 121 months in prison “for his role in a transnational and multimillion-dollar scheme to defraud American victims.”
Following his conviction in September last year, Rossen G. Iossifov was sentenced “for conspiracy to commit a Racketeer Influenced and Corrupt Organizations Act (RICO) offense and conspiracy to commit money laundering.”
The DOJ explained that the 53-year-old Bulgarian national owned and managed a cryptocurrency exchange headquartered in Sofia, Bulgaria, called RG Coins. Allegedly, he “knowingly and intentionally engaged in business practices designed to both assist fraudsters in laundering the proceeds of their fraud and to shield himself from criminal liability.” The Department of Justice claimed that at least five of his principal clients “were Romanian scammers, who belonged to a criminal enterprise known in court records as the Alexandria (Romania) Online Auction Fraud (AOAF) Network.”
Iossifov and his co-conspirators “engaged in a large-scale scheme of online auction fraud that victimized at least 900 Americans,” the DOJ detailed, adding that once victims sent payment:
The conspiracy engaged in a complicated money laundering scheme wherein domestic associates would accept victim funds, convert these funds to cryptocurrency, and transfer proceeds in the form of cryptocurrency to foreign-based money launderers.
“Iossifov was one such foreign-based money launderer who facilitated this final step in the scheme,” the DOJ noted.
The Department of Justice further alleged that “Iossifov designed his business to cater to criminal enterprises by, for instance, providing more favorable exchange rates to members of the AOAF Network,” elaborating:
Iossifov also allowed his criminal clients to conduct cryptocurrency exchanges for cash without requiring any identification or documentation to show the source of funds, despite his representations to the contrary to the major bitcoin exchanges that supported his business.
According to the DOJ, Iossifov laundered nearly $5 million in cryptocurrency for four scammers in less than three years. He also defrauded over $7 million from American victims and made over $184,000 in proceeds from these transactions.
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