A former credit union board chair and CEO and a board member face decades in prison for their roles in taking control of a New Jersey credit union and using it to conceal an illegal Bitcoin operation that ran tens of millions of dollars in ACH transactions.
Last week, a federal jury found Trevon Gross, the former board chair and CEO of the Helping Other People Excel Federal Credit Union in Lakewood, and Yuri Lebedev, former board member, guilty of several felony counts following a four-week trial in U.S. District Court in New York City.
Between 2013 and July 2015, Lebedev helped operate Coin.mx, an unlawful internet-based Bitcoin exchange, along with Anthony Murgio, the founder of Coin.mx. To conceal the Bitcoin exchange, they operated a fake front company to open bank accounts and trick financial institutions into believing the exchange was a members-only association of individuals who bought and sold collectible items and memorabilia.
They also deceived financial institutions by misidentifying and miscoding Coin.mx customers’ credit and debit card transactions. Through the illegal Coin.mx scheme, Lebedev and Murgio illegally processed more than $10 million in Bitcoin-related transactions, according to prosecutors.
However, financial institutions apparently became suspicious about Coin.mx’s operations.
In 2014, in an effort to evade scrutiny from the banks, Lebedev and Murgio gained control of HOPE FCU after making more than $150,000 in illegal bribes to Gross, who also was a pastor of the Hope Cathedral in Jackson. He also directed Lebedev and Murgio to deposit the bribe money into the church’s bank accounts.
With Gross’ assistance, Murgio installed Lebedev and other co-conspirators on HOPE FCU’s board of directors and transferred Coin.mx’s banking operations to the credit union. Gross also ceded operational control of the credit union to the board members installed by Murgio, including Lebedev, according to court documents.
“Thereafter, Gross, Lebedev, and others worked to run tens of millions of dollars of ACH transactions through the credit union without adequate controls, thus putting its financial condition at risk,” Acting Manhattan U.S. Attorney Joon H. Kim said in a prepared statement.
HOPE FCU was operated as a captive bank through the end of 2014.
To cover up their control of the credit union, Gross, Lebedev and Murgio obstructed an NCUA examination, lied to examiners and manipulated the books to conceal the fact that the tiny cooperative founded to serve low-income members was processing tens of millions of dollars of transactions without adequate controls.
By October 2015, the NCUA placed HOPE FCU into conservatorship and liquidated it.
Lebedev, 39, of St. John’s, Fla., and Gross, 52, of Jackson, were found guilty of one count of making corrupt payments to an officer of a financial institution and one count of receipt of corrupt payments by an officer of a financial institution, respectively, each of which carries a maximum sentence of 30 years in prison.
Additionally, they were each found guilty of participation in a conspiracy to make and receive corrupt payments, as well as to obstruct the examination of the NCUA and make false statements to the federal agency, which carries a maximum sentence of five years in prison. Lebedev was also found guilty of one count of wire fraud, bank fraud, and conspiracy to commit wire and bank fraud, each of which carries a maximum sentence of 30 years in prison.
Their sentencing hearings are scheduled for July 20.
Murgio, 33, of Tampa, Fla., pleaded guilty in January to charges associated with operating Coin.mx. His sentencing hearing is pending.
Federal prosecutors said Coin.mx was owned by Gery Shalon, the leader and self-described founder of a sprawling criminal enterprise that raked in hundreds of millions of dollars in illicit proceeds.
From 2012 to mid-2015, Shalon and other individuals ran massive computer hacking crimes against several U.S. financial institutions, including JP Morgan Chase Bank, and national investment brokers Scott Trade, E*Trade and the Dow Jones & Co., which led to the largest theft of personal information from U.S. financial institutions ever, according to federal prosecutors.
Shalon pleaded not guilty to numerous fraud charges. He is awaiting a trial hearing in U.S. District Court in New York City.
