Bitcoin Exchange Operator Sentenced to 16 Months in Prison for Money Laundering

in #bitcoin2 years ago

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A 39-year-old software engineer was arrested for his role in an illegal bitcoin exchange that was allegedly being used to launder funds for a global hacking ring responsible for high-profile attacks. The man, Yuri Lebedev, came to the U.S. from the Ukraine seeking the American dream, but was recently sentenced to 16 months in prison.

Through the exchange, Coin.mx, Yuri Lebedev tricked banks into processing bitcoin-related transactions by masking them as if they were restaurant-delivery charges and online purchases. In March, a Manhattan jury, following a monthlong trial, found Lebedev, as well as a co-conspirator Trevon Gross,52, guilty of conspiracy and fraud.

U.S. District Judge Alison J. Nathan pointed out that Lebedev abused his “impressive technology skills” to make financial institutions he tricked “unwilling participants” in the money laundering scheme he was involved in.

Reportedly, Coin.mx was an exchange set up for use by a hacker group that targeted financial and publishing firms, including JP Morgan and Dow Jones, back in 2014. It did a lot of bitcoin transactions for ransomware victims, who were often forced to pay a ransom in the cryptocurrency to unlock their computers.

Recently, while standing before his sentence, Lebedev stated that he regretted getting involved with Coin.mx in the first place, and that all he wanted to do was “create cutting edge technology that would make me exceptional.” He added that he got carried away, and that now realizes “there are now shortcuts.”

Notably, for not being neither a leader nor a mastermind in the operation, Lebedev was given “considerably less time” than the maximum of 10 years recommended by sentencing guidelines in the U.S.. Regarding his role, judge Nathan stated that he “did what he was told to do.”

Lebedev’s role in Coin.mx was to set up servers that the exchange used to process transactions, an element that required constant attention in order for banks not to notice what the exchange was really doing. U.S. court papers read:

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A 39-year-old software engineer was arrested for his role in an illegal bitcoin exchange that was allegedly being used to launder funds for a global hacking ring responsible for high-profile attacks. The man, Yuri Lebedev, came to the U.S. from the Ukraine seeking the American dream, but was recently sentenced to 16 months in prison.

Through the exchange, Coin.mx, Yuri Lebedev tricked banks into processing bitcoin-related transactions by masking them as if they were restaurant-delivery charges and online purchases. In March, a Manhattan jury, following a monthlong trial, found Lebedev, as well as a co-conspirator Trevon Gross,52, guilty of conspiracy and fraud.

U.S. District Judge Alison J. Nathan pointed out that Lebedev abused his “impressive technology skills” to make financial institutions he tricked “unwilling participants” in the money laundering scheme he was involved in.

Reportedly, Coin.mx was an exchange set up for use by a hacker group that targeted financial and publishing firms, including JP Morgan and Dow Jones, back in 2014. It did a lot of bitcoin transactions for ransomware victims, who were often forced to pay a ransom in the cryptocurrency to unlock their computers.

Recently, while standing before his sentence, Lebedev stated that he regretted getting involved with Coin.mx in the first place, and that all he wanted to do was “create cutting edge technology that would make me exceptional.” He added that he got carried away, and that now realizes “there are now shortcuts.”

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Notably, for not being neither a leader nor a mastermind in the operation, Lebedev was given “considerably less time” than the maximum of 10 years recommended by sentencing guidelines in the U.S.. Regarding his role, judge Nathan stated that he “did what he was told to do.”

Lebedev’s role in Coin.mx was to set up servers that the exchange used to process transactions, an element that required constant attention in order for banks not to notice what the exchange was really doing. U.S. court papers read:

“One 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”

In charge of Coin.mx’s operations was Anthony Murgio who, as covered by CCN, was sentenced to 72 months in prison. He revealed that he ran Coin.mx for Gery Shalon, an Israeli who plead guilty after being extradited from Israel last June. Prosecutors also said Shalon oversaw a JP Morgan hacking scheme that stolen information from over 100 million people.

Lebedev, according to reports, was born in Russia and raised in Ukraine. When he was just 8 years old, he was abandoned by his alcoholic father and was raised by his mother, who was a scientist. At 16 he was selected to move the U.S. state of Georgia after winning awards in math, physics, and biology. In the U.S., he double-majored in physics and computer science, and obtained post-graduate degrees.

Defense filings even show that at the time his math teacher said that the U.S. “received a genius from the Ukraine.” His attorney, Eric Creizman, pointed out that he was only 16 when he moved to America, stating:

“Yuri, with his mother’s support, made the brave decision to move to the United States — without having a single relative or acquaintance in America — in order to improve his life.”

Creizman, according to the Japan Times, tried hard to portray him as a husband and loving father of three, who was merely caught up in something that was too big for him. He went as far as describing his client as an “unlikely criminal defendant.”

Prosecutors, however, pointed to Lebedev’s life seeking a tougher sentence, arguing that he wasn’t like criminals who were motivated to break the law for needing money, for example. U.S. Attorney Won S. Shin stated:

“He basically could have ridden out the script for his life. [People in these situations] are even more culpable.”

Prosecutors also pointed out he attempted to obstruct the case by deleting files from a computer. Levedev’s family and friends, according to reports, sent the court letters describing him as a hard-working man devoted to his children.

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