Bitcoin-Powered Fake Auctions related case made 15 people face charges
The United States Department of Justice (DoJ) recently pointed out that fifteen people have faced charges of involvement in an international union that used fraud online auctions to dupe victims out of Bitcoin (BTC).
“The defendants allegedly orchestrated a highly organized and sophisticated scheme to steal money from unsuspecting victims in America and then launder their funds using Cryptocurrency,” said Assistant Attorney General Benczkowski.
Romania-Based international cyber fraud ring captured
On July 5, 2018, a federal grand jury in Lexington, Kentucky returned a 24-count indictment charging 15 foreign nationals with RICO conspiracy, wire fraud conspiracy, money laundering conspiracy, and aggravated identity theft.
he Defendants and others knew and unknown to the Grand Jury, were members and associates of a criminal organization, herein referred to as the “Alexandria Online Auction Fraud Network,” whose leaders, members, and associates engaged in, among other things, acts of mail and wire fraud, money laundering, identity theft, and counterfeit trademark trafficking.
The Alexandria Online Auction Fraud Network operated principally out of Alexandria, Romania, and other locations throughout Europe and the United States.
The indictment alleges that these defendants participated in a criminal conspiracy primarily located in Alexandria, Romania that engaged in a large-scale scheme of online auction fraud.
According to the indictment, these members would convince American victims to send money for the advertised goods by crafting persuasive narratives, for example, by impersonating a military member who needed to sell the advertised item before deployment.
The members of the conspiracy are alleged to have created fictitious online accounts to post these advertisements and communicate with victims, often using the stolen identities of Americans to do so. They are alleged to have delivered invoices to the victims bearing trademarks of reputable companies in order to make the transactions appear legitimate. Once victims were convinced to send payment, the indictment alleges that the conspiracy engaged in a complicated money laundering scheme wherein domestic associates would accept victim funds,
convert these funds to Cryptocurrency, and transfer proceeds in the form of Cryptocurrency to foreign-based associates.
Coinflux Romanian exchange laundered funds
Using Coinflux, the group allegedly laundered money from their criminal activities, including defrauding U.S. citizens.
The exchange was founded in 2015 and has since traded Cryptocurrency worth over $229 million, processing more than 203,000 transactions, according to its records. Last year the platform had a turnover of more than $3.4 million and made over 30,000 transactions. A warning on its website now reads “Trading disabled, bank account frozen.”
Coinflux going down in 2018
Vlad Nistor was arrested in December by Romanian law enforcement officials and Secret Service agents in Cluj, where his crypto business is based. He was released soon after that by the Bucharest Court of Appeal but not allowed to leave the city. The 29-year-old entrepreneur submitted an appeal against the U.S. extradition request for alleged money laundering and fraudulent activity. On Dec. 20, the court rejected his objections.
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