On February 16, 2017, the trial for Yuri Lebedev and Trevor Gross began in Manhattan federal court. Lebedev and Gross have been charged for conspiracy to operate an unlicensed money transmitting business and operating an unlicensed money transmitting business, each of which carries a maximum sentence of five years in prison. This case stems from both defendants’ involvement with the unlicensed bitcoin exchange Coin.mx, whose operator, Anthony R. Murgio, pled guilty to conspiracy to operate an unlicensed money transmitting business and conspiracy to commit bank fraud in January 2017.
According to the FBI investigation, Murgio, Lebedev, and other co-conspirators, including Gross, operated Coin.mx in violation of federal anti-money laundering (“AML”) laws and regulations, which have reporting requirements promulgated by the U.S. Treasury. Further, they knowingly exchanged approximately $1.8 million for Bitcoins, belonging to customers that they believed may be involved with illegal and/or criminal activity. The FBI reported that in “doing so, Murgio, and his co-conspirators knowingly enabled the criminals responsible for those attacks to receive the proceeds of their crimes, yet, in violation of federal anti-money laundering laws, Murgio never filed any suspicious activity reports regarding any of the transactions.”
Allegedly, Lebedev, Gross, and other co-conspirators not only involved themselves with Coin.mx, but also engaged in additional criminal activities that furthered the illegal business “by operating through a phony front-company, ‘Collectables Club,’ and maintaining a corresponding phony ‘Collectables Club’ website. In doing so, they sought to trick the major financial institutions through which they operated into believing that their unlawful Bitcoin exchange business was simply a members-only association of individuals who discussed, bought, and sold collectable items, such as sports memorabilia.” Further, Lebedev was on the Board of Directors for a New Jersey credit union that Murgio had obtained beneficial control over, which was where the banking operations of Coin.mx took place.
At trial, attorneys for Lebedev and Gross maintain their clients should not be held responsible for actions taken by Murgio. Lebedev’s attorney stated he was simply “in the wrong place at the wrong time with the wrong people” while Gross’ attorney stated “he was tricked into believing Coin.mx was a memorabilia club, and thought there was nothing wrong about a donation to the church, and which did not benefit him personally. He didn't know anything about what they were up to.”
However, Assistant U.S. Attorney Won Shin argued that “Lebedev schemed with others to bribe Gross, the pastor and head of a Jackson, New Jersey-based credit union housed in his church. Gross accepted bribes including a $150,000 church donation in exchange for helping unlicensed bitcoin exchange Coin.mx's operator take over Helping Other People Excel Federal Credit Union. The bribes and lies had a simple, shared purpose: For the defendants Lebedev and Gross and their co-conspirators to make money.”
The events leading to these charges primarily occurred between 2013 and 2015, with formal charges being filed by a federal grand jury first against Murgio and subsequently against co-conspirators. Murgio pled guilty in January 2017 and is scheduled to be sentenced in June 2017. The trial was originally scheduled to begin earlier this week, but Judge Alison Nathan delayed jury selection when the prosecution requested to introduce a new witness to testify against Gross, which was denied.
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