US prosecutors have charged Bulgarian national Rossen Iossifov with conspiring to launder approximately $290,000 in cryptocurrency while serving a federal prison sentence. According to the Department of Justice's July 9 statement, Iossifov allegedly conspired to move the funds in January 2024 while incarcerated. The charges include removal of property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering, with a potential sentence of up to 25 years in prison. As reported by the Justice Department, Iossifov allegedly moved the funds through several cryptocurrency exchanges and illicit mixing services to conceal their movement. The transfers allegedly prevented the U.S. government from taking possession of the assets, which had already been ordered forfeited to the United States following his earlier conviction.
Iossifov was convicted in 2021 in the Eastern District of Kentucky on racketeering and money laundering conspiracies. As reported by the Department of Justice, he owned RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria, that served the Alexandria Online Auction Fraud (AOAF) Network. The Romanian fraud ring defrauded at least 900 American victims through an online auction scheme. Court evidence showed Iossifov laundered nearly $5 million in cryptocurrency over less than three years, earning more than $184,000 in personal profit. Following his 2021 conviction, the court ordered Iossifov to forfeit the cryptocurrency at issue and pay $2.6 million in restitution to victims. His earlier conviction and sentence were later upheld on appeal.
Following his 2021 conviction, the court ordered Iossifov to forfeit the cryptocurrency at issue and pay $2.6 million in restitution to victims. According to the Department of Justice, the funds allegedly moved through several cryptocurrency exchanges and mixing services in January 2024, with prosecutors stating the transfers were designed to prevent US recovery of the money. The DOJ finalized the forfeiture of more than $400 million linked to crypto mixer Helix in January, highlighting the scale of operations involving such services. Mixers blend transactions to obscure fund trails, making them a common tool for money laundering operations. The Secret Service, which investigated both cases, framed the alleged conduct as an affront to the courts, with Special Agent in Charge Robert Holman stating that Iossifov's deliberate attempt to remove and launder lawfully seized funds represents a direct challenge to the justice system.
Assistant Attorney General A. Tysen Duva stated that Iossifov is accused of moving cryptocurrency obtained through the earlier fraud scheme "in violation of a court's forfeiture order." The DOJ will pursue defendants who disregard court orders tied to earlier criminal sentences, demonstrating their commitment to protecting forfeited assets. The Secret Service investigated the latest case, while the DOJ's Office of International Affairs also provided support. The case shows the operational challenge authorities face when taking control of digital assets, as a court can issue a forfeiture order but officials must still secure wallets, private keys and related accounts before funds can be transferred elsewhere. If convicted on the latest charges, Iossifov faces a maximum combined sentence of 25 years in prison, with the court determining any sentence after considering federal guidelines and other legal factors.
