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Anthony Murgio, the operator of the Coin.mx Bitcoin exchange, has been sentenced to 66 months in prison for processing over $10 million in illegal Bitcoin transactions. He has also been sentenced to three years of supervised release once his prison sentence is over.
“Anthony Murgio’s criminal business model consisted of a phony front company hiding an illegal internet Bitcoin exchange. Murgio laundered money, lied to banks, and took over a federal credit union to further his scheme. Murgio’s was an age-old fraud by new age means,” Acting U.S. Attorney Joon H. Kim, who prosecuted the case, commented.
According to the indictment to which Murgio pled guilty on January 9, 2017, and evidence admitted at a trial of two co-defendants:
Between 2013 and July 2015, he knowingly operated Coin.mx, an unlawful internet-based Bitcoin exchange that he had founded, in violation of federal anti-money laundering laws and regulations. He and his co-conspirators engaged in substantial efforts to evade detection of their unlawful Bitcoin exchange by operating through a phony front company called the “Collectables Club.” Murgio used the Collectables Club to open financial accounts in order to trick financial institutions into believing the unlawful Bitcoin exchange was simply a members-only association of individuals who discussed, bought, and sold collectible items and memorabilia.
In addition to lying to banks to open accounts, Murgio and his co-conspirators deceived financial institutions by deliberately misidentifying and miscoding Coin.mx customers’ credit and debit card transactions, in violation of bank and credit card company rules and regulations. They also instructed Coin.mx customers to mislead banks about the nature of the credit and debit card transactions the customers executed through Coin.mx. Through this illegal scheme, Murgio and his co-conspirators caused more than $10 million in Bitcoin-related transactions to be processed illegally through financial institutions.
In 2014, in an effort further to evade scrutiny from financial institutions about the nature of the business engaged in by Coin.mx, Murgio and his co-conspirators gained control of HOPE FCU, a federal credit union in New Jersey with primarily low-income members. After making more than $150,000 in illegal bribes at the direction of Trevon Gross, the then-chairman and CEO of credit union, Murgio and his co-conspirators took control of it and transferred Coin.mx’s banking operations to it. Gross ceded operational control of the credit union to the board members installed by Murgio, and Murgio and others worked to process tens of millions of dollars of ACH transactions through the credit union without adequate controls, thus putting its financial condition at risk.
All five of Murgio’s co-defendants, including Trevon Gross and Michael Murgio (his father), have already been convicted and have been sentenced or are currently awaiting sentencing.
Gery Shalon, the owner of the Coin.mx Bitcoin exchange, was arrested in 2015 and, along with Joshua Samuel Aaron and Ziv Orenstein, charged with orchestrating massive computer hacking crimes against U.S. financial institutions (e.g. JPMorgan Chase), brokerage firms and financial news publishers.
The US Department of Justice noted that Anthony Murgio first used the Bitcoin exchange to launder money for hackers.
from Help Net Security http://ift.tt/2t0qaHd
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