One of New Jersey's smallest credit unions was directlyconnected to a sprawling criminal enterprise that led to thelargest customer data theft case in history, which involved thenation's biggest bank, according to court documents recentlyunsealed by New York prosecutors.

On Dec. 4, Yuri Lebedev pleaded not guilty to conspiracy inManhattan's U.S. District Court to bribing a senior executive ofHelping Other People Excel Federal Credit Union of Jackson,N.J., which was liquidated by the NCUA last month.

Federal prosecutors alleged Lebedev and others participated in abribery scheme to gain control of the credit union in order toconceal the operations of Coin.mx, an unlicensed Internet Bitcoin exchange service that allegedly laundered moneyfor criminals.

The credit union executive was allegedly bribed with more than$175,000, according to court documents. When contacted by CUTimes Tuesday, federal prosecutors declined to comment onwhether the executive would face charges.

After the Coin.mx business was transferred last year into theoperations of the credit union, which had just $290,000 in assetsand 96 members, it was processing more than $30 million a month inACH payments, according to court documents.

“Yuri Lebedev is innocent of the charges filed against him, andwe are confident that he will be vindicated at trial,” Eric M.Creizman, a New York attorney who is representing Lebedev,said.

In July, CU Times reported Lebedev of Jacksonville,Fla. and Anthony R. Murgio of Tampa, were named in a criminalcomplaint alleging the two men conspired to operate an unlicensedmoney laundering business and an unlicensed money transmittingbusiness, Coin.mx, which exchanged millions of dollars for Bitcoinsfor their customers.

The charges of operating an unlicensed money laundering businessand an unlicensed money transmitting business have been terminatedfor the time being against Levedev, Creizman said.

However, Murgio was indicted on these allegations, as well asconspiring to bribe the senior credit union executive, wire fraudand money laundering, according to court documents unsealed lastmonth.

On Nov. 17, Murgio pleaded not guilty to the felony charges. Hislawyer, Robert A. Soloway, did not respond to CU Times'request for comment Tuesday.

Additional indictments unsealed by prosecutors last month alsorevealed the owner of Coin.mx was Gery Shalon, the leader andself-described founder of a sprawling criminal enterprise thatraked in hundreds of millions of dollars in illicit proceeds.According to court documents, Shalon concealed at least $100million in Swiss and other bank accounts.

From 2012 to mid-2015, Shalon allegedly orchestrated massivecomputer hacking crimes against seven U.S. financial institutions,including JP Morgan Chase Bank, national investment brokers ScottTrade, E*Trade and the Dow Jones & Co, the parent company ofthe Wall Street Journal. The other financial institutionswere not identified in court documents.

Federal prosecutors said personal information belonging to morethan 100 million customers from these financial institutions wasstolen. Of that total, the JP Morgan Chase accounts of 76 millionhouseholds and seven million small businesses were compromised.

From 2007 to 2015, Shalon also owned unlawful Internet gamblingbusinesses in the U.S. and abroad, as well as multinational paymentprocessors for illegal pharmaceutical suppliers, counterfeit andmalicious software distributors and unlawful Internet casinos.

Shalon and two other men, Joshua Samuel Aaron and Ziv Orenstein,operated the business and ran various criminal schemes, federalprosecutors alleged.

Shalon, Aaron and Orenstein allegedly used personal IDs they hadstolen to send out emails to unsuspecting investors to promote andpump up the price of publicly-traded penny stocks that the threemen and others owned. Once the price of the penny stock increasedover the course of days or weeks, Shalon, Aaron and Orensteindumped their shares, often resulting in millions of dollars inprofits while exposing investors to significant losses.

The three were indicted on multiple felony counts of wire,computer and identity fraud. To date, they have not been arraignedin U.S. District Court. Reportedly, Shalon, Aaron and Orensteinlive in Israel.

Murgio and others operated Shalon's Coin.mx, which allowedcustomers to exchange cash for Bitoins and charged a fee for theservice. From October 2013 to July 2015, Coin.mx exchanged millionsof dollars for Bitcoins for customers across the U.S., prosecutorsalleged.

Murgio set up a fake association to hide the Bitcoin exchangescheme. To open bank accounts needed to manage Coin.mx's huge cashflows, Murgio told major financial institutions that he wasoperating a members-only association that bought and soldcollectable items such as stamps and sports memorabilia.

Murgio also deceived banks and credit card issuers intoauthorizing credit and debit card payment transactions to purchaseBitcoins through Coin.mx by misidentifying and miscoding customers'debit and debit card transactions.

In 2014, to continue hiding Coin.mx's illegal operations, Murgioand others managed to control Helping Other People Excel FCU bybribing a senior executive who was not identified in courtdocuments.

With the credit union executive's assistance, Murgio installedhis co-conspirators, including Lebedev, on the credit union's boardof directors. After that, Coin.mx's operations were thentransferred into the credit union.

Murgio also invited Lebedev to become an advisory member on theboard for which he would be paid $5,000.

Court documents also show the executive was becoming worriedabout the “tap dancing” he and others were doing to avoid raisingconcerns among federal regulators about the payment processactivity that Murgio and others were conducting through thecooperative.

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

The executive also acknowledged the credit union had notperformed appropriate Bank Secrecy Act procedures and, as a result,the credit union's account may have been used for money launderingand other crimes.

Although the NCUA learned the credit union was processing morethan $30 million a month in ACH transactions, court documents donot say when it forced the New Jersey cooperative to stopprocessing the ACH transactions. The NCUA also required the creditunion to remove the new board members.

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