Bitcoin Exchange Owner Laundered Millions of Dollars
The owner of a Bitcoin exchange has become the seventeenth person to be convicted in the United States in connection with a transnational multi-million-dollar online auction fraud scheme that victimized over 900 Americans.
Rossen Iossifov was found guilty yesterday by a federal jury in Frankfort, Kentucky, of one count of conspiracy to commit racketeering and one count of conspiracy to commit money laundering after a two-week trial in front of US District Judge Robert Wier.
Iossifov was the owner of RG Coins, a Bitcoin exchange based in his native Bulgaria. Court documents and evidence presented at trial proved that the 53-year-old entered into a fraudulent scheme to launder money for criminals based in Romania.
The elaborate scheme involved posting goods for sale online that didn't exist and tricking Americans into paying for them, often with fake sob stories around the reason for the sale.
Members of the conspiracy created fictitious online accounts, often using the stolen identities of Americans, to post these advertisements and communicate with victims.
Duped Americans received invoices bearing trademarks of reputable companies, cunningly faked to make the transactions appear legitimate. Call centers, impersonating customer support, were also set up by the criminals to address questions and alleviate concerns over the advertisements.
The millions of dollars brought in by the scheme were laundered through RG Coins by Iossifov, who exchanged cryptocurrency into local fiat currency. According to trial testimony, over the course of two and a half years, Iossifov exchanged over $4.9m worth of Bitcoin for just four other members of the criminal enterprise.
"Romania-based members of the conspiracy posted false advertisements to popular online auction and sales websites—such as Craigslist and eBay—for high-cost goods (typically vehicles) that did not actually exist," said the Department of Justice in a statement released yesterday.
"Members of the conspiracy would convince American victims to send money for the advertised goods by crafting persuasive narratives, for example, by impersonating a military member who needed to sell the advertised item before deployment."
Iossifov is scheduled to be sentenced on January 12, 2021. Three other defendants indicted in connection with this case remain at large.