This case involves a transnational criminal organization (called the “Alexandria Online Auction Fraud Network” by U.S. authorities in the criminal indictment) which perpetrated online auction fraud (i.e., advertising and selling non-existent items) against U.S. victims on eBay, Craigslist, Amazon, and AutoTrader.com. The organization primarily operated in Alexandria, Romania, with some operations taking place in other areas of Eastern Europe, as well as the United States. The victims of the online auction fraud paid for the fake items with “reloadable prepaid cards, prepaid debit cards, and gift cards of varying types (collectively referred to herein as ‘prepaid debit cards’), including Green Dot Moneypaks, Visa One Vanilla prepaid debit cards, PayPal My Cash cards, and Amazon gift cards; United States postal money orders; cashier’s checks; MoneyGram and Western Union wires; and bank wires and deposits.”
The Alexandria Online Auction Fraud Network worked with others to launder criminal proceeds, by taking the money paid by victims for the fake items sold online, converting the money to Bitcoin, transferring the Bitcoin to members and associates in Eastern Europe, and using Bitcoin exchanges to convert the Bitcoin to fiat currency. Associates of the organizations in the United States, such as J.A.V., obtained victim payments, converted them to Bitcoins, and sent the Bitcoins to members of the organization who had perpetrated the online auction fraud. Third-party money launderers in the U.S. (i.e., A.E.N., D.A.B., and R.W.D.L.T) were also used to collect, redeem, and convert victim payment into cash or Bitcoins. Additionally, two Bitcoin exchangers were used by the Alexandria Online Auction Fraud Network. Particularly, a Bulgarian national (Rossen Iossifov) owner of a Bitcoin exchange (RG Coins), registered in Bulgaria, was charged and convicted for conspiracy to commit racketeering and conspiracy to commit money laundering in contravention of U.S. laws. A Romanian national (Vlad-Calin Nistor) owner of a Bitcoin exchange (Coinflux Services SRL), registered in Romania, pled guilty to conspiracy to commit racketeering.
In total, 20 individuals, 16 of which were foreign nationals, were charged in the United States, and 12 of the foreign nationals were extradited to the United States. At the time of writing, 17 individuals have been convicted for crimes relating to the online auction fraud perpetrated by members and associates of the criminal organization, including (but not limited to): conspiracy to commit racketeering, money laundering, and wire fraud, and well as identity-related fraud.
Bulgaria
RomaniaUnited States of AmericaA member of the network who engaged in money laundering operations became an informant. Through the use of the confidential informant critical information was obtained to identify members of the group, their roles, the operations of the group, and ultimately to use the information obtained from the informant to dismantle the network.
RomaniaUnited States of AmericaU.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
U.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
U.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
U.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
U.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
U.S. District Court for the Eastern District of Kentucky
The defendant entered a guilty plea.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals in order to obtain money and personal information. Specifically, the defendant defrauded U.S. targets into purchasing nonexistent items and fraudulently obtained the personal information of these targets.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to R.I. and other co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1028A
Aggravated Identity Theft
The defendant fraudulently possessed, used, and transferred identity-related information.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and conspiracy
The defendant engaged in conspiracy to defraud individuals in order to obtain money from them by enticing them to purchase nonexistent items online.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
The defendant was ordered to pay USD 93,854.44 in compensation.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online (i.e., EBay and Amazon) and persuading the targets to purchase these nonexistent items.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant collected payment information, recorded it, shared it with a co-conspirator, and was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
As part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant posted fake advertisements of nonexistent items on Craigslist accounts he had taken over. Once targets contacted him to purchase the item, the defendant would send invoices, collect target personal information, including payment data, and shared it with a co-conspirator. The defendant was aware that co-conspirators were processing money from the sale of non-existent items and converting these funds to bitcoins. Once converted to Bitcoins, the Bitcoins would be transferred to co-conspirators overseas, who would exchange the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1349
Attempt and Conspiracy
The defendant facilitated the commission of auction fraud on sites like eBay. Like his co-conspirators, he engaged in conspiracy to defraud individuals by posting advertisements of nonexistent items online (e.g., on eBay) and persuading the targets to purchase these nonexistent items
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The targets of the auction fraud sent payments for nonexistent items to co-conspirators located in the United States. These co-conspirators would then convert the payments to Bitcoins, which were subsequently sent overseas, particularly Eastern Europe, to be converted into fiat currency. Bogdan-Stefan Popescu, Florin Arvat, and Alin-Ionut Dobrica were responsible for negotiating the exchange of Bitcoins to fiat currency with Bitcoin exchangers overseas, such as Vlad-Calin Nistor.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The targets of the auction fraud sent payments for nonexistent items to co-conspirators located in the United States. These co-conspirators would then convert the payments to Bitcoins, which were subsequently sent overseas, particularly Eastern Europe, to be converted into fiat currency. Bogdan-Stefan Popescu, Florin Arvat, and Alin-Ionut Dobrica were responsible for negotiating the exchange of Bitcoins to fiat currency with Bitcoin exchangers overseas, such as Vlad-Calin Nistor.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The targets of the auction fraud sent payments for nonexistent items to co-conspirators located in the United States. These co-conspirators would then convert the payments to Bitcoins, which were subsequently sent overseas, particularly Eastern Europe, to be converted into fiat currency. Bogdan-Stefan Popescu, Florin Arvat, and Alin-Ionut Dobrica were responsible for negotiating the exchange of Bitcoins to fiat currency with Bitcoin exchangers overseas, such as Vlad-Calin Nistor.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The targets of the auction fraud sent payments for nonexistent items to co-conspirators located in the United States. These co-conspirators would then convert the payments to Bitcoins, which were subsequently sent overseas, particularly Eastern Europe, to be converted into fiat currency. Bogdan-Stefan Popescu, Florin Arvat, and Alin-Ionut Dobrica were responsible for negotiating the exchange of Bitcoins to fiat currency with Bitcoin exchangers overseas, such as Vlad-Calin Nistor.
18 U.S.C. § 1962(d)
Racketeer Influenced and Corrupt Organization (RICO) Conspiracy
The defendant was part of a criminal enterprise engaged in racketeering activities relating to fraud, money laundering, and trafficking in goods and services which bore counterfeit marks.
18 U.S.C. § 1956(h)
Laundering of monetary instruments
The defendant received bitcoins from the proceeds of the cybercrimes committed. Rossen Iossifov and other co-conspirators overseas, exchanged the cryptocurrencies into fiat currencies, such as EUR, and LEI, among other forms of fiat currency.
U.S. District Court for the Eastern District of Kentucky
United States of America v. Stoica et al., No. 5-18-CR-81-JMH (E.D. Ky. Jul. 5, 2018) (Indictment)
United States of America v. Ologeanu, et al., No. 0:19-CR-10-JMH (E.D. Ky. Feb. 6, 2019) (Superseding Indictment)
United States v. Ion, No. 5:18-CR-81-REW-MAS-6 (E.D. Ky. Oct. 10, 2019) (Guilty plea)
U.S. Department of Justice,Office of Public Affairs, “Fifteen Defendants Plead Guilty to Racketeering Conspiracy in International Cyber Fraud Scheme” 11 June 2020.
U.S. Department of Justice,Office of Public Affairs, “Owner of Bitcoin Exchange Convicted of Racketeering Conspiracy for Laundering Millions of Dollars in International Cyber Fraud Scheme” 28 September 2020.
U.S. Department of Justice,Office of Public Affairs, “United States and International Law Enforcement Dismantle Online Organized Crime Ring Operating out of Romania that Victimized Thousands of U.S. Residents” 7 February 2019.
Comments
Fiat and cryptocurrency, including Lei, USD, EUR, XRP, XEM, ARK, as well as real property were confiscated.