Bitcoin Exchange Owner Sentenced to Prison for Involvement in Multimillion-Dollar Fraud Scheme
The recent sentencing of Rossen G. Iossifov, the owner of a Bulgarian bitcoin exchange, has shed light on a transnational online auction fraud scheme that defrauded over 900 Americans of more than $7 million. Iossifov’s involvement in the scheme has landed him a 121-month prison sentence in the United States.
Details of the Case
Following a two-week trial in September 2020, a federal jury in Kentucky found Iossifov guilty of conspiracy to commit racketeering and conspiracy to commit money laundering. The charges stemmed from his ownership and management of RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria.
According to trial evidence, Iossifov knowingly engaged in business practices that facilitated money laundering for fraudsters and shielded himself from criminal liability. His clients included members of the Alexandria Online Auction Fraud Network, a group of Romanian scammers who defrauded individuals through fake online auctions on platforms like Craigslist and eBay.
The Money Laundering Scheme
The scam involved posting advertisements for high-value items that did not exist and convincing victims to send payment. Domestic associates would then convert the funds into cryptocurrency, which was transferred to foreign-based money launderers like Iossifov. He allowed his criminal clients to exchange cryptocurrency for cash without verifying the source of funds and offered them preferential rates.
Over a period of three years, Iossifov laundered nearly $5 million for the scammers and pocketed over $184,000 in return. His actions were part of a larger scheme involving 17 individuals connected to the Alexandria Online Auction Fraud Network.
Conclusion
The sentencing of Rossen G. Iossifov highlights the risks associated with cryptocurrency exchanges and the role they can play in facilitating illegal activities. As law enforcement continues to crack down on online fraud schemes, it serves as a reminder that individuals involved in such criminal enterprises will be held accountable for their actions.