Anthony Murgio had run Coin.mx from 2013 to 2015 and prosecutors for the United States District Court For The Southern District Of New York alleged that the 33-year-old had used the enterprise to launder millions of dollars including extortion payments made to hackers and the proceeds of illegal online gambling. The Tampa resident was also charged with going to great lengths to obscure his activities from authorities including by creating the spurious Collectables Club venture.
“Anthony Murgio took a new-age approach to an age-old crime of fraud,” read a statement from Preet Bharara, United States Attorney For The Southern District Of New York. “As he admitted in his guilty plea today, Murgio used Coin.mx, an Internet-based Bitcoin exchange, to process over $10 million in Bitcoin transactions in violation of federal anti-money laundering laws and then obstructed a regulatory examination to hide his scheme.”
Murgio pled guilty to one count each of conspiracy to operate an unlicensed money transmitting business, conspiracy to commit bank fraud and conspiracy to obstruct an examination of a financial institution. Two of his co-defendants, Jose Freundt and Michael Murgio admitted to various conspiracy charges in October and are currently awaiting sentencing while the trials of two additional co-defendants, Trevon Gross and Yuri Lebedev, are scheduled to begin on February 6.
In its case, which was being overseen by Assistant United States Attorneys Eun Young Choi, Daniel Noble and Won Shin, the United States District Court For The Southern District Of New York charged that Murgio had knowingly operated Coin.mx in violation of federal anti-money laundering laws and regulations including those requiring such services to meet state licensing and federal registration requirements as set forth by the United States Treasury Department.
“Murgio and his co-conspirators engaged in substantial efforts to evade detection of their unlawful Bitcoin exchange by operating through a phony front company called Collectables Club,” read a statement from the United States District Court For The Southern District Of New York. “Murgio used Collectables Club to open bank accounts through which Coin.mx operated in order to trick financial institutions into believing the unlawful Bitcoin exchange was simply a members-only association of individuals who discussed, bought and sold collectible items and memorabilia.”
The United States District Court For The Southern District Of New York has moreover contended in its prosecution that Murgio, who is scheduled to be sentenced by Judge Alison Nathan on January 27, and his co-defendants had deceived financial institutions by “deliberately misidentifying and miscoding Coin.mx customers’ credit and debit card transactions”, which was a violation of federal rules and regulations.
“Murgio and his co-conspirators also instructed Coin.mx customers to mislead banks about the nature of the credit and debit card transactions the customers executed through Coin.mx,” read the statement from the United States District Court For The Southern District Of New York. “For example, Murgio and his co-conspirators caused customers to falsely tell the banks that the transactions in which they engaged with Coin.mx were for collectible items when in reality they were for Bitcoins. Through the illegal Coin.mx scheme, Murgio and his co-conspirators caused more than $10 million in Bitcoin-related transactions to be processed illegally through financial institutions.”
In an effort further to evade scrutiny, prosecutors further alleged that Murcio illegally gained control of Hope FCU, which was a New Jersey federal credit union primarily serving low-income members, by paying “bribes” totalling around $150,000.
“Murgio installed various co-conspirators on Hope FCU’s board of directors and transferred Coin.mx’s banking operations to Hope FCU,” read the statement from the United States District Court For The Southern District Of New York.
In late-2014, Mugio and his co-defendants were additionally alleged to have attempted to obstruct a National Credit Union Administration examination of Hope FCU, which was placed into conservatorship before being liquidated in October of 2015, by making misrepresentations including those concerning the headquarters of Collectables Club.
“Hope FCU was operated as a captive bank by Murgio and his co-conspirators until the end of 2014,” read the statement from the United States District Court For The Southern District Of New York.