Prepare your shocked faces: Crypto-coin exchange boss laundered millions of bucks for online auction crooks
- Reference: 1601445791
- News link: https://www.theregister.co.uk/2020/09/30/bitcoin_exchange_laundering/
- Source link:
Rossen Iossifov, 53, who ran the RG Coins exchange, was on Monday found guilty of conspiracy to commit racketeering, and conspiracy to commit money laundering, following a two-week trial.
Essentially, [1]as prosecutors tell it , Iossifov was given Bitcoins to convert into normal currency for members of a cyber-fraud ring.
Those Bitcoins had been obtained using money extracted from marks who had fallen for bogus ads posted on Craigslist and auctions listed on eBay for flash vehicles and other top-end gear that never actually existed.
The fraudsters behind these listings, said to be based in Romania, even set up call centers for people to phone if they had any questions or feared an ad was too good to be true, seemingly legitimizing the adverts. The ads were also posted using stolen identities, and the con men would sometimes pose as hero military personnel needing to flog their belongings ahead of deployment. Convincing-looking invoices with recognizable logos on them were sent to victims to persuade them to cough up.
These ill-gotten gains were converted to Bitcoins and run through Iossifov's Bulgarian operation to convert back into real money and disguise the origin. According to prosecutors:
Once victims were convinced to send payment, the conspiracy participants 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.
According to evidence presented at trial, Iossifov was the owner of RG Coins, a Bulgaria-based Bitcoin exchange. From at least September 2015 to at least December 2018, he exchanged cryptocurrency into local fiat currency on behalf of the Romania-based members of the conspiracy, knowing that the Bitcoin represented the proceeds of illegal activity. According to trial testimony, for example, in just the span of about two and a half years, Iossifov exchanged over $4.9m worth of Bitcoin for just four other members of the criminal enterprise.
At least 900 Americans were duped by the gang, we're told. Seventeen crooks have been convicted so far in this case, and three others remain fugitive.
Iossifov, who was convicted by a jury in eastern Kentucky in America, is due to be sentenced on January 21. ®
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[1] https://www.justice.gov/opa/pr/owner-bitcoin-exchange-convicted-racketeering-conspiracy-laundering-millions-dollars
[2] https://whitepapers.theregister.com/
Re: Oh , the joys of unregulated...
Philosophy meets reality, must be shocking for those in the crypto echo chamber to find out your ideals of freedom enable incarceration....
Re: Oh , the joys of unregulated...
Regulation of financial services? Remember when Gordon Brown reduced regulation of banking in Britain to attract foreign banks to practice here? Then he acted all surprised when those same banks started doing things here that they wouldn't be allowed to do in their home countries.
On a related point how long is it going to take governments to figure how much tax avoidance is enabled by bitcoin?
Re: Oh , the joys of unregulated...
On a related point how long is it going to take governments to figure how much tax avoidance is enabled by bitcoin?
Since they can't even get a handle on how much tax avoidance happens under regular currency, I'm thinking the answer is "Quite a while"
Re: Oh , the joys of unregulated...
FATF country members are responsible for implementing recommendations on Virtual Assets and Virtual Asset Service Providers. The EU has 5AMLD which mandates that crypto exchanges have to have the same AML controls as banks. This is implemented in the UK in The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 statutory instrument.
So who exactly has been saying money laundering regulation is unnecessary?
Enforcement is necessary for compliance, of course, but the regulation is there.
bogus ads posted on Craigslist and auctions listed on eBay for flash vehicles and other top-end gear that never actually existed.
Who in their right mind would buy a flash car from Craigslist, and pay in Bitcoin? Unless perhaps those bitcoins were already proceeds from dubious sources.
At least 900 Americans were duped
Hmmm.
They paid cash, gang members converted to crypto, hence laundering charges
They didn't pay in bitcoin. Their payment was converted to bitcoin, then back again. It says so in the article.
It's typical of one of our MAGAs or one of your brexitters though.
I think the crooks received payment in normal funds then converted to bitcoin in order to transfer the money out of the country avoiding the usual laundering safeguards in banks.
Fair enough, my mistake, but the point still stands. Who buys expensive stuff like cars from online auction sites when they know they have no comeback if the deal goes south?
Re: Who buys?
Who buys expensive stuff from sites where they have no comeback?
People looking for a bargain. And people have been preying on them more or less for ever.
People who failed to understand jack and the beanstalk originally ended with him destitute with a handful of beans, but was retconned to a happy ending by the think of the children brigade who realised it was better for there pockets to show there was some upside for donating to their cause even if the value returned was questionable....
"...People who failed to understand jack and the beanstalk originally ended with him destitute with a handful of beans, but was retconned to a happy ending by the think of the children brigade who realised it was better for there pockets to show there was some upside for donating to their cause even if the value returned was questionable...."
Care to try again in English?
Jack indeed
“Fee-fi-fo-fum,
I smell the blood of an Englishman”
"Who buys expensive stuff like cars from online auction sites when they know they have no comeback if the deal goes south?"
And is prepared to hand over the cash before even kicking the tyres?
"...And is prepared to hand over the cash before even kicking the tyres?..."
This is the thing. Are we now at a stage where non-face to face interaction has become so normal for some people that they are prepared to do just this?
Funnily enough I've just bought a car. Even though I know the dealer from the past and trust them, I still went to test drive it. I wanted to be sure it was as described (it was) but more importantly that I could actually get along with it - will the seats be comfortable enough for long journeys, meaning I won't arrive crippled with pain? Do all the buttons and switches work as they should? Does it drive properly? etc etc etc
And whilst I'd normally try for a bit of money off, I knew from the outset that this was a steal of a buy and in this particular case didn't bother.
But of course you can't do any of that when you buy something unseen off of a website somewhere.
I wouldn't even be duped into the "we need a deposit" without at least seeing the damn thing.
The thing is , with internet searching , as opposed to the local paper copy of Exchamnge and mart, your 'shopping zone' is country wide , if not wider.
So if a good example of the model you set your heart on comes up 500 miles away , a couple of grand less than the others you looked at , watcha gonna do?
I guess there a max value for where "buy unseen" is a viable strategy - possibly the credit card fraud refund ceiling (is it £15k) or much less if that doesent apply.
How clean is this laundry?
Did they get cash out of ebay payments and *then* bitcoin? or straight from fraud accounts into bitcoin?
if they had the cash did they need the bitcoin layer?
"Where you get that £5m ?"
"Bitcoin windfall , got it at the exchange"
"Wheres the wallet?"
"here"
"oh *that* 5m , the chain says that came from lots of bitcoin deposits from these fraudulemt ebay scam bank accounts"
OR
"Wheres the wallet?"
"lost it"
"ok you're free to go" (in which case why not just say you got your suitcase full of cash out of bitcoin)
At the end of the day , dont you have to prove a legitimate method of earning your ill gotton millions , regardless of how the money moved from A to B?
"Laundering" doesent just mean moving it around
Quite close to home
I have a few UK limited companies, one of which is essentially a non-trading one with no internet presence. Someone emailed me Sunday telling me that my company name, number and my own name are being used on a website (with the same name as the company) pretending to be a boat brokerage. The same crowd took tens of thousands last time they set it up apparently, routing the money through HSBC accounts (a different one for each buyer) in the UK to their accounts elsewhere.
I've filed an "abusive registration" notification on Sunday with nominet to try and seize control of the domain. But as it stands now it looks like a legitimate business, with a company registration number, contact details - all cribbed from companies house - as well as a UK non-regional number, and presumably a UK bank account at the end.
Questions I would like answered are WTF HSBC are doing with the know-your-customer, is that account also in my companies name, and if so how the actual fuck did that happen. But without chasing the transactions through to the end I'm not going to find that out.
Re: Quite close to home
That’s tough.
Good luck with Nominet unless you want to buy a .uk.
And good luck with HSBC. Have you seen the FinSEC report? Or read their cringing support for the “government” in Hong Kong?
It seems like you have an uphill struggle on your hands.
Oh , the joys of unregulated...
financial services
taxi services
accommodation services
etc.
All these services were eventually regulated after long histories of malpractice. Now, inexplicably, we've come to accept that the regulation is unnecessary - and we're paying the price.