One of New Jersey's smallest credit unions was directly connected to a sprawling criminal enterprise that led to the largest customer data theft case in history, which involved the nation's biggest bank, according to court documents recently unsealed by New York prosecutors.

On Dec. 4, Yuri Lebedev pleaded not guilty to conspiracy in Manhattan's U.S. District Court to bribing a senior executive of Helping 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 a bribery scheme to gain control of the credit union in order to conceal the operations of Coin.mx, an unlicensed Internet Bitcoin exchange service that allegedly laundered money for criminals.

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

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

“Yuri Lebedev is innocent of the charges filed against him, and we 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 criminal complaint alleging the two men conspired to operate an unlicensed money laundering business and an unlicensed money transmitting business, Coin.mx, which exchanged millions of dollars for Bitcoins for their customers.

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

However, Murgio was indicted on these allegations, as well as conspiring to bribe the senior credit union executive, wire fraud and money laundering, according to court documents unsealed last month.

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

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

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

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

From 2007 to 2015, Shalon also owned unlawful Internet gambling businesses in the U.S. and abroad, as well as multinational payment processors for illegal pharmaceutical suppliers, counterfeit and malicious 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, federal prosecutors alleged.

Shalon, Aaron and Orenstein allegedly used personal IDs they had stolen to send out emails to unsuspecting investors to promote and pump up the price of publicly-traded penny stocks that the three men and others owned. Once the price of the penny stock increased over the course of days or weeks, Shalon, Aaron and Orenstein dumped their shares, often resulting in millions of dollars in profits 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 arraigned in U.S. District Court. Reportedly, Shalon, Aaron and Orenstein live in Israel.

Murgio and others operated Shalon's Coin.mx, which allowed customers to exchange cash for Bitoins and charged a fee for the service. From October 2013 to July 2015, Coin.mx exchanged millions of dollars for Bitcoins for customers across the U.S., prosecutors alleged.

Murgio set up a fake association to hide the Bitcoin exchange scheme. To open bank accounts needed to manage Coin.mx's huge cash flows, Murgio told major financial institutions that he was operating a members-only association that bought and sold collectable items such as stamps and sports memorabilia.

Murgio also deceived banks and credit card issuers into authorizing credit and debit card payment transactions to purchase Bitcoins through Coin.mx by misidentifying and miscoding customers' debit and debit card transactions.

In 2014, to continue hiding Coin.mx's illegal operations, Murgio and others managed to control Helping Other People Excel FCU by bribing a senior executive who was not identified in court documents.

With the credit union executive's assistance, Murgio installed his co-conspirators, including Lebedev, on the credit union's board of directors. After that, Coin.mx's operations were then transferred into the credit union.

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

Court documents also show the executive was becoming worried about the “tap dancing” he and others were doing to avoid raising concerns 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 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.

Instant Insights /

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