A convicted cryptocurrency money launderer has been accused of orchestrating the withdrawal and laundering of approximately $290,000 in digital assets that had already been seized and ordered forfeited to the United States, allegedly carrying out the scheme while serving a federal prison sentence.
Rossen G. Iossifov, a 53-year-old Bulgarian national, appeared in the Eastern District of Kentucky on charges connected to the removal of property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering.
TL;DR
- Prosecutors allege Iossifov and others removed approximately $290,000 in forfeited cryptocurrency from a Kraken account.
- The assets were allegedly routed through cryptocurrency exchanges and illicit mixing services before being converted into fiat currency.
- Iossifov was already imprisoned for laundering nearly $5 million connected to an online auction fraud network.
- He faces up to 25 additional years in prison if convicted.
The Justice Department said the cryptocurrency involved in the latest case had been restrained during an earlier criminal investigation and subsequently ordered forfeited as part of Iossifov’s 2021 sentence.
According to the indictment, between approximately January and December 2024, Iossifov allegedly conspired with other individuals to remove the assets from a cryptocurrency account registered in his name at Kraken.
The group allegedly conducted interstate and international financial transactions designed to prevent the United States from taking custody and control of the funds.
Prosecutors said the cryptocurrency was transferred through multiple exchanges and illicit mixing services, which can be used to make transactions more difficult to trace. The proceeds were allegedly converted into traditional currency and deposited into a foreign bank account.
“Having been convicted of a widespread online auction fraud scheme targeting U.S. victims, Iossifov is now charged with moving cryptocurrency that he obtained from that crime, in violation of a court’s forfeiture order,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division.
“The Department of Justice will take all steps to ensure that justice is served for victims of complex financial crimes,” Duva added.
Iossifov’s previous conviction stemmed from his involvement with the Alexandria Online Auction Fraud Network, a Romania-based criminal enterprise that targeted at least 900 Americans.
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Members of the network posted false advertisements for expensive products, typically vehicles, on platforms such as Craigslist and eBay. The advertised goods did not exist, but victims were persuaded to send payments after receiving fabricated invoices, false identities and convincing explanations from the sellers.
Domestic associates received the victims’ funds, converted the money into cryptocurrency and transferred the assets to foreign-based money launderers.
Iossifov owned and managed RG Coins, a cryptocurrency exchange headquartered in Sofia, Bulgaria. Trial evidence showed that he provided cryptocurrency services to members of the fraud network and laundered nearly $5 million in less than three years.
The Justice Department previously said Iossifov offered favorable exchange rates to criminal clients and allowed them to exchange cryptocurrency for cash without identification or documentation establishing the source of the funds.
He was ordered to pay $2,642,297.43 in restitution to victims. The court also ordered the forfeiture of the cryptocurrency now at the center of the new allegations.
“Iossifov’s alleged efforts to evade a lawful forfeiture order and obscure the movement of criminal proceeds represent a direct affront to the authority of the federal courts,” said Jason Parman, First Assistant U.S. Attorney for the Eastern District of Kentucky.
Robert Holman, Special Agent in Charge of the U.S. Secret Service’s Louisville Field Office, said the alleged attempt represented “a direct challenge to our justice system and a blatant disregard to his victims’ rights.”
The Secret Service conducted the investigation, with support from the Justice Department’s Office of International Affairs.
Iossifov faces a maximum sentence of 25 years if convicted. However, the indictment contains allegations only, and he is presumed innocent unless proven guilty beyond a reasonable doubt.
