Employee of Coin.Mx Operator Gets 16 Months Sentence
A Ukrainian software engineer from Florida received a 16 months prison sentence for his role in creating a Bitcoin scam, using an illegal Bitcoin exchange, Coin.mx, to launder money for a global hacking network which targeted financial and publishing firms.
US District Judge Alison Nathan on Friday, sentenced the accused, Yuri Lebedev after he was convicted earlier this year by a jury in Manhattan on conspiracy and fraud-related charges. One Trevon Gross, a pastor from New Jersey was also arrested alongside.
Reports from US filings state that Yuri Lebedev ran multiple servers for Coin.mx, the illegal Florida-based exchange that deceived banks and payment transactions, by allowing the exchange to disguise Bitcoin transactions as restaurant delivery charges and online collectible items.
Lebedev explained to the U.S. District Judge Alison J. Nathan before the sentencing that he only got into the scheme to build âcutting edge technology,â one âthat who make me exceptional.â
The only consolation on his part was that he managed to avoid the full 10 years he was facing and admitted that he âgot carried away,â only to realize that âthere are no shortcuts.â
Reports from the court suggested that Lebedev did not actually launder any funds himself, but he was found guilty of setting up and maintaining the illegal exchange.
âOne of those critical issues that Lebedev handled was the use of separate servers to mislead banks and payment processors into thinking that Coin.mx Bitcoin transactions were actually Collectables Club memorabilia and MyXtremeDelivery food transactions,â the U.S. attorney said in court papers.
During the sentencing, U.S District Judge Alison J. Nathan stated that he was amongst âunwilling participants in the schemeâ because he used his âimpressive technology skillsâ to trick banks.
Coin.mx, the illegal Bitcoin exchange was owned by Gery Shalon, who was also the mastermind behind the illegal scheme that hacked and stole information from nine companies and over a 100 million people. Shalon, however, pleaded not guilty to criminal charges.
According to Prosecutors, Coin.mx, the now-defunct illegal Bitcoin exchange was unregistered and sold Bitcoins that were used in illegal online transactions as payments in various ransomware attacks. They also laundered money for dark web criminals, including drug dealers and also engaged in extortion schemes by the use of Bitcoin.
Lebedev also conspired with his boss to bribe a New Jersey pastor who was also arrested, to hand over a credit union that was run out of a church to them and uses it to help legitimize the illegal exchangeâs illegal operations. All this was done in a bid to avoid regulators.
The bribes included a donation of an amount of $150,000 to Grossâs church.
âLebedev was one of the handfuls of co-conspirators involved in the credit unionâs processing of over $60 million in riskyâ transactions, prosecutors stated in court papers.
Earlier this year, Anthony Murgio, a colleague of Lebedev and operator of Coin.mx was also sentenced to more than 5 years in prison by the same judge for the operation of the illegal exchange and also conspiracy to obstruct examination of an unlicensed financial institution. He pleaded guilty to all charges.
Murgio first indictment came in July 2015, which he was money laundering. The case took a much weirder dimension when his father also became entangled in the charges. He was also charged with participating in a bribery scheme to hide the Bitcoin exchangeâs operations and pleaded guilty to lesser charges in October.
In court filings, the U.S. government stated that âboth men knowingly exchanged cash for people whom they believed may be engaging in criminal activity.â
Lebedev was born in Russia but raised in Ukraine before immigrating to the United States to a host family at the age of 16. He is now 39 and a father of three children.
Eric Creizman, Lebedevâs attorney described his client as a husband and doting father of three caught up in something too big for him to recognize.
In court papers, he described his client as an âunlikely criminal defendant.â
âThis case in which Lebedev was tried and convicted as a defendant involved a far broader scope of criminality than the conduct that Lebedev purposefully involved himself in or even knew about,â Creizman further stated in a court filing.