Owner of Bitcoin exchange RG Coins gets convicted of racketeering conspiracy
Rossen Iossifov was convicted of one count of conspiracy to commit racketeering and one count of conspiracy to commit money laundering.
Rossen Iossifov, owner of Bulgaria-based Bitcoin exchange RG Coins, was found guilty on Monday for his role in a transnational and multi-million dollar scheme to defraud American victims through online auction fraud.
Iossifov, formerly of Bulgaria, was convicted by a federal jury in Frankfort, Kentucky of one count of conspiracy to commit racketeering and one count of conspiracy to commit money laundering after a two-week trial.
According to evidence presented at trial, from at least September 2015 to at least December 2018, Iossifov exchanged cryptocurrency into local fiat currency on behalf of Romania-based members of a criminal conspiracy, knowing that the Bitcoin represented the proceeds of illegal activity. According to trial testimony, for example, in just the span of about two and a half years, Iossifov exchanged over $4.9 million worth of Bitcoin for just four other members of the criminal enterprise.
The criminal conspiracy represented a large-scale scheme of online auction fraud that victimized at least 900 Americans. Specifically, Romania-based members of the conspiracy posted false advertisements to popular online auction and sales websites—such as Craigslist and eBay—for high-cost goods (typically vehicles) that did not actually exist. Members of the conspiracy would convince American victims to send money for the advertised goods by crafting persuasive narratives, for example, by impersonating a military member who needed to sell the advertised item before deployment.
Members of the conspiracy created fictitious online accounts to post these advertisements and communicate with victims, often using the stolen identities of Americans to do so. They also delivered invoices to the victims bearing trademarks of reputable companies in order to make the transaction appear legitimate. Members of the conspiracy also set up call centers, impersonating customer support, to address questions and alleviate concerns over the advertisements.
According to court documents, once victims were convinced to send payment, the conspiracy participants engaged in a complicated money laundering scheme wherein domestic associates would accept victim funds, convert these funds to cryptocurrency, and transfer proceeds in the form of cryptocurrency to foreign-based money launderers.
Seventeen total defendants have been convicted in this case. Three others are fugitives.
Iossifov’s sentencing has been set for January 12, 2021.