New York federal prosecutors arrested two Florida men Tuesday who allegedly ran a phony company and controlled a New Jersey federal credit union to operate an unlicensed Internet Bitcoin exchange scheme for the purpose of laundering money for criminals.

Since late 2013, Anthony R. Murgio, 31, of Tampa and Yuri Lebedev, 37, of Jacksonville, operated Coin.mx, a Bitcoin exchange service, which violated federal anti-money laundering laws. Through Coin.mx, Murgio and Lebedev enabled their customers to exchange cash for Bitcoins, charging a fee for their service.

Federal prosecutors alleged that the two men exchanged cash for people whom they believed might be engaging in criminal activity.

In late 2014, Murgio obtained “beneficial control” of a small New Jersey federal credit union, which was processing more than $30 million a month, to process ACH transactions, according to court documents.

Murgio managed his control over the credit union by making a payment to a senior executive and installing individuals close to him, including Lebedev, on the credit union’s board of directors.

In emails between Murgio and the senior credit union executive, who was not identified, the executive admitted to Murgio that notwithstanding the executive’s titular role, “I’m going to say it…..it’s your credit union….I believe how I’ve operated from day one is it’s your credit union.”

In an email to Lebedev, Murgio described the New Jersey cooperative as a “small credit union 107 members no full time employees.” Murgio also invited Lebedev to become an advisory member on the board for which he would be paid $5,000.

Lebedev responded, “I am most definitely in! and “I won’t disappoint you[.]”

Federal prosecutors did not name the credit union.

Court documents also show the executive was becoming worried about the “tap dancing” he and others were doing to avoid raising concern among federal regulators about the payment process activity that Murgio and others were conducting through the cooperative.

“We can’t certify that all the people we let [pass] money through this credit union…..weren’t doing something illegally with the money,” the executive wrote in an email to Murgio.

The executive also acknowledged that the credit union had not performed appropriate Bank Secrecy Act procedures and, as a result, the credit union’s account may have been used for money laundering and other crimes.

Although the NCUA learned the credit union was processing more than $30 million a month in ACH transactions, court documents do not say when it forced the New Jersey cooperative to stop processing the ACH transactions. The NCUA also required the credit union to remove the new board members.

However, Murgio found other ways to process payments for Coin.mx – primarily through an overseas payments processor.

Murgio and Lebedev also allegedly exchanged cash for Bitcoins for victims of “ransomware” attacks. Criminals use ransomware known as Cryptowall to electronically block access to a victim’s computer system until ransom money, typically in Bitcoins, is paid to them.

From October 2013 to January 2015, Coin.mx exchanged at least $1.8 million for Bitcoins on behalf of tens of thousands of customers. In addition, in the course of the scheme, Murgio also transferred hundreds of thousands of dollars to bank accounts in Cyprus, Hong Kong and Eastern Europe, and received hundreds of thousands of dollars from bank accounts in Cyprus and the British Virgin Islands, federal prosecutors alleged.

What’s more, Murgio and Lebedev managed to evade detection of their scheme by operating through a phony front-company called the Collectables Club, which also maintained a corresponding fake website.

Federal prosecutors alleged the Florida men ran the bogus business to trick two major financial institutions to open bank accounts under the Collectables Club.

Murgio and Lebedev convinced bank officials to believe that the Bitcoin exchange was simply a members-only association of individuals who discussed, bought and sold collectable items, such as sports memorabilia, and that the accounts would be used to deposit membership dues and service fees.

However, according to court documents, the bank accounts were used to operate Coin.mx. From September 2013 to mid-2014, Murgio and Lebedev exchanged more than $1 million for Bitcoins on behalf of Coin.mx customers.

The Collectables Club account records show thousands of incoming deposits in varying amounts from individuals, some of whom in wire transfer instructions noted that their payment was for Bitcoins. Additionally, the bank records also showed numerous payments were made to entities that sell Bitcoins in exchange for U.S. dollars and other currency.

The banks were not identified in court documents.

Murgio and Lebedev were each charged with one count of conspiracy to operate an unlicensed money transmitting business, and one count of operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison.

In addition, Murgio was also charged with one count of money laundering, which carries a maximum sentence of 20 years in prison and one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison, federal prosecutors said.

Instant Insights /

New Jersey Credit Union Tied to Illegal Bitcoin Scheme

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