United States prosecutors have charged a man serving a federal prison sentence in connection with the alleged removal and laundering of approximately $290,000 in crypto assets held in a Kraken account subject to a forfeiture order.
Department of Justice he said on Thursday that Rossen Iossifov, a Bulgarian national, conspired in January 2024 to withdraw and transfer cryptocurrencies that a federal court ordered forfeited following his conviction in 2021. Prosecutors say the assets were transferred through illegal mixing services and cryptocurrency exchanges before the United States could seize them.
The case shows how attempts to transfer cryptocurrencies after a forfeiture order has been issued can result in fresh criminal charges, even after a conviction.
Office of the U.S. Attorney for the Eastern District of Kentucky he said the cryptocurrency was held in an account registered to Iossifov at Kraken and was seized during the investigation. The Justice Department’s announcement did not say how the account was accessed or whether the funds were recovered.
Cryptocurrency laundering is subject to greater law enforcement scrutiny
Iossifov was there before convicted on racketeering and money laundering conspiracy charges for his role in an online auction fraud network that victimized at least 900 Americans.
Prosecutors said Iossifov owned and operated a cryptocurrency exchange called RG Coins, which converted criminal proceeds into cryptocurrencies and cash for the network. Previous evidence showed he laundered nearly $5 million in crypto in less than three years.
The court ordered Iossifov to pay over $2.6 million in damages and confiscate crypto assets. He is now charged with removing property to prevent seizure, aiding and abetting and conspiracy to commit money laundering. If convicted, the charges carry a maximum penalty of 25 years.
An indictment is an accusation and Iossifow is presumed innocent unless proven guilty.
Related: The US Department of Justice sentences a man to 70 months in prison for participating in a ring that extorted $263 million
The allegations come as authorities step up scrutiny of crypto infrastructure used to conceal illicit flows. On Thursday, Interpol reported that a wallet linked to a person suspected of money laundering in connection with a romance scam processed more than $122 million in 10 months by using cross-chain swaps to move online fraud proceeds.
The investigation was part of a wider operation covering 97 countries and territories. The campaign led to the arrests of 5,811 people and the seizure of assets worth $293 million linked to fraud and money laundering.
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