Bitcoin exchange operator linked to ransomware hackers jailed
The Florida-based operator of an illegal bitcoin exchange suspected of laundering money for hackers and linked to a data breach at JPMorgan has been given a five-and-a-half-year sentence after pleading guilty to three counts of conspiracy including bank fraud and operating an unlicensed money transmitting business.
33 year old Anthony Murgio and co-conspirators were accused of processing millions of dollars from 2013 to 2015 into the virtual currency bitcoin through the unlicensed exchange Coin.mx.
Prosecutors said many transactions were conducted by victims of ransomware, malicious software that locks up data unless people pay a “ransom” to unlock it. Cybercriminals often demand that a ransom is paid in bitcoin.
The alleged schemes also involved the takeover of a since-liquidated New Jersey credit union to shield their activity.
“Mr. Murgio led an effort based on ambition and greed,” constructed on a “pyramid of lies,” US District Judge Alison Nathan in Manhattan said during the sentencing hearing.
Murgio unsuccessfully fought back tears and lost his composure several times in expressing “enormous regret” for his crimes, which the judge credited as genuine.
“I am wiser today than when the case began and I am sorry for all the damage I caused to so many people,” Murgio said. “Believing what I was doing was OK did not make it OK.”
Nathan cited Murgio’s generosity to friends and support to his family in imposing a term below the 10 to 12 1/2 years recommended by prosecutors and federal guidelines.
Murgio’s lawyer Brian Klein said he was pleased with the reduction, after telling the judge that Murgio had taken responsibility for his “grievous decision making.”
In contrast, Assistant U.S. Attorney Eun Choi faulted Murgio’s dealings with ransomware victims, saying, “He exploited their desperation to personally profit from them.”
Murgio’s father, Michael, pleaded guilty last October to an obstruction charge tied to the credit union.
Nine people have been criminally charged following an investigation into the JPMorgan breach, which exposed more than 83 million accounts.
Prosecutors said Coin.mx was owned by Gery Shalon, who pleaded not guilty to US charges after being extradited last June from Israel.
In March, a jury in Manhattan convicted Florida software engineer Yuri Lebedev and New Jersey pastor Trevon Gross of scheming to conceal Coin.mx’s activities from banks and regulators. They have yet to be sentenced.
Bitcoin is an online cryptocurrency based on blockchain technology that some predict could be used in the future as the basis for financial transactions or government systems.