Pastor, Programmer Convicted of Conspiracy and Bribery in Bitcoin Exchange Scheme
A New Jersey pastor and a Florida software engineer were convicted on Friday of scheming to help an illegal bitcoin exchange avoid having banks and regulators look into its activities.
The bitcoin exchange, Coin.mx, was linked to an investigation of a data breach at JPMorgan Chase & Co, revealed in 2014, that exposed more than 83 million accounts.
Pastor Trevon Gross, 47, and programmer Yuri Lebedev, 39, were convicted of conspiracy and bribery charges by a jury in Manhattan federal court after a week of deliberations, according to a spokesman for federal prosecutors. Lebedev was also convicted of wire fraud and bank fraud.
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Henry Klingeman, Gross’s attorney, said in an email that he would seek an order overturning the verdict, “and — if and when the time comes — a fair and lenient sentence.”
Eric Creizman, a lawyer for Lebedev, had no immediate comment.
Prosecutors charged that Lebedev helped arrange bribes to Gross, including $150,000 in donations to his church. In exchange, they say, Gross helped the operator of Coin.mx, Anthony Murgio, take over a small credit union Gross ran from his church.
Murgio used the credit union to evade scrutiny of banks wary of processing payments involving the virtual currency, prosecutors say. Lebedev was accused of working for Coin.mx through a front called “Collectables Club.”
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Over the course of a four-week trial, lawyers for Lebedev and Gross tried to paint a different picture, saying their clients did not know that Murgio was running an illegal operation and never acted with corrupt intent.
The trial followed a probe rooted in the JPMorgan (JPM) data breach, which lead to charges against nine people.
Gross, Lebedev and Murgio were not accused of hacking. But prosecutors said Coin.mx was owned by an Israeli who was behind the breach, Gery Shalon.
Prosecutors say Shalon, together with Maryland-born Joshua Samuel Aaron, orchestrated cyber attacks that resulted in the theft of information from more than 100 million people.
Prosecutors said they carried out the hacks to further other schemes with another Israeli, Ziv Orenstein, including pumping up stock prices with promotional emails. Shalon, Aaron and Orenstein have pleaded not guilty.
Murgio pleaded guilty to charges related to Coin.mx in January. He is scheduled to be sentenced on June 16.