When Anthony Murgio took over a credit union as a front to operate an illegal Bitcoin operation, he posted on Facebook that he needed a CEO.
“Anyone interested in running a credit union in New Jersey? We are looking for a new CEO,” Murgio’s Facebook post read, according to a local media report.
Murgio, 33, of Tampa, Fla., pleaded guilty Monday to charges associated with operating Coin.mx, an online Bitcoin exchange through which he processed more than $10 million in illegal transactions. He also used Helping Other People Excel Federal Credit Union to conceal the scheme.
He also pled guilty to conspiring to obstruct an examination of the credit union by the NCUA to cover up what was really going on.
Murgio, along with his father, Michael J. Murgio of Palm Beach, Fla., made $150,000 in bribes to Trevon Gross, former board chair of the conserved credit union that was based in Lakewood, N.J.
Michael Murgio, a former Palm Beach School board member, pleaded guilty in October to one felony count of conspiracy to obstruct an examination of a federal financial institution. Another co-defendant, Jose M. Freundt, also pled guilty in October to conspiracy to operate an unlicensed money transmitting business, operating an unlicensed money transmitting business and conspiracy to corruptly make payments to an officer of a financial institution.
Since late 2013, Anthony Murgio and Yuri Lebedev of Jacksonville, Fla., operated Coin.mx. Federal prosecutors said Anthony Murgio, Lebedev and other coconspirators profited from numerous Bitcoin transactions conducted on behalf of customers who sought Bitcoins to buy drugs at Darknet websites. These websites operate as online black market bazaars that allow vendors and buyers to conduct illegal transactions anonymously, according to court documents.
Before taking over the credit union, Murgio and his coconspirators concealed the Bitcoin exchange by operating through phony front companies and websites such as collectible clubs. They used these fake clubs to trick financial institutions into believing their Bitcoin exchange was a members-only association who bought and sold collectable items.
That bogus story enabled Murgio to open bank accounts in the name of the collectible clubs. Murgio and his coconspirators also told their association members to lie to credit card issuing banks about the Bitcoin transactions that they were executing through Coin.mx.
But the lies didn’t hold up, because the records of the accounts for the collectables clubs showed thousands of incoming deposits in varying amounts from individuals, some of whom in wire transfer instructions noted that their payment was for Bitcoins. Additionally, the bank records also revealed numerous payments were made to entities that sell Bitcoins in exchange for U.S. dollars and other currency.
In April 2014, in a new strategy to evade scrutiny from financial institutions about the illegal Coin.mx operations, Murgio obtained control of the credit union. Court records do not explain why Murgio targeted the credit union. Prosecutors declined to respond to CU Times’ request for comment.
In addition to bribing Gross, Murgio managed control over the credit union by installing individuals close to him, including Lebedev, on the credit union’s board of directors.
In late 2014, Murgio, Lebedev and Gross obstructed an NCUA examination by attempting to mislead examiners about the financial health of the cooperative and the eligibility of Lebedev and other board members that were selected by Murgio.
By October 2015, the NCUA placed the $290,927, 96-member Helping Other People Excel FCU into conservatorship.
What’s more, federal prosecutors have alleged that the owner of Coin.mx was Gery Shalon, the leader and self-described founder of a sprawling criminal enterprise that raked in hundreds of millions of dollars in illicit proceeds. According to court documents, Shalon concealed at least $100 million in Swiss and other bank accounts.
From 2012 to mid-2015, Shalon allegedly orchestrated 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.
Federal prosecutors said personal information belonging to more than 100 million customers from these financial institutions was stolen. Of that total, the JP Morgan Chase accounts of 76 million households and seven million small businesses were compromised.
From 2007 to 2015, Shalon also owned unlawful internet gambling businesses in the U.S. and abroad, as well as multinational payment processors for illegal pharmaceutical suppliers, counterfeit and malicious software distributors, and unlawful internet casinos.
Shalon and two other men, Joshua Samuel Aaron and Ziv Orenstein, operated the business and ran various criminal schemes, federal prosecutors alleged.
Shalon, Aaron and Orenstein allegedly used personal IDs they had stolen to send out emails to unsuspecting investors to promote and pump up the price of publicly traded penny stocks that the three men and others owned. Once the price of the penny stock increased over the course of days or weeks, Shalon, Aaron and Orenstein dumped their shares, often resulting in millions of dollars in profits while exposing investors to significant losses.
The three were indicted on multiple felony counts of wire, computer and identity fraud.
Aaron, 32, was arrested in December at JFK International Airport. He had been on the run and lived in Russia. He has not entered a plea yet and remains in custody. He allegedly hacked into the networks of dozens of American companies, prosecutors said.
Shalon and Orenstein were also on the run in Israel and were arrested by authorities there in July 2015. They were extradited to the U.S. in June 2016. Legal proceedings are pending against them. Their legal proceedings are pending in U.S. District Court in Manhatten.
Trials for Gross and Lebedev, who both pleaded not guilty to felony charges, are scheduled to begin in February.
