According to the U.S. Department of Justice (DoJ), fifteen people pleaded guilty to participating in an international syndicate that conducted fraudulent auctions to defraud Bitcoin (BTC) owners.
Since at least December 2013, the union has used non-existent product listings on auction and sales websites to defraud victims, and the group has laundered the funds through the Romanian crypto currency exchange Coinflux in recent years.
According to the Justice Department report, four of the complaints were made by Ethereum Code in the last 24 days before federal judge Matthew A. Stinnett, two of which were in the last 24 hours.
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The international cyber-fraud network
On June 11, Bogdan-Stefan Popescu, 30, and Liviu-Sorin Nedelcu, 34, pleaded guilty to charges of organized crime and RICO violations.
The lawsuit states that Nedelcu collaborated with other fraudsters to post ads on auction websites about goods that did not exist, most commonly vehicles. “Upon receiving the payment, Nedelcu and his accomplices participated in a sophisticated money laundering scheme to convert the victim’s payment to Bitcoin,” the Justice Department said.
The DoJ claims that Popescu identified “a transaction in which he admitted to obtaining BTCs fraudulently” through internet scams, in addition to providing money laundering services and making use of distribution tools used to defraud victims in the United States.
The founder of the Romanian crypto currency exchange Coinflux will be extradited to the US under multiple charges
Coinflux cryptoexchange involved in money laundering
The funds generated by the union were laundered through the Romanian exchange Coinflux.
Vlad-Călin Nistor, 33, founder and operator of Coinflux, pleaded guilty on May 19 to being an accessory to charges in violation of the RICO Act. Nistor converted the cryptoactives of the criminals into local trust currency on behalf of the Romanian members of the group.”
The Justice Department claims that Nistor laundered the funds despite “knowing that Bitcoin represented the product of illegal activity,” with statement documents indicating that Nistor exchanged more than $1.8 million in Bitcoin for Popescu.
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Beniamin-Filip Ologeanu, 30, also pleaded guilty to this collective crime on May 19, after working with the union to post fraudulent ads on auction and sales websites. Olegeanu also bought the profits of his accomplices in the form of prepaid debit cards to be laundered in the United States.
“Through the use of digital currencies and cross-border organizing strategies, this criminal syndicate believed they were beyond the reach of the police,” said Assistant Director of the U.S. Secret Service Michael D’Ambrosio.
“However, as this successful research clearly illustrates, with sustained international cooperation, we can effectively hold cybercriminals accountable for their actions, no matter where they reside.