CoinFlux owner pleads guilty to money laundering charges

In a new development, the owner of the crypto exchange CoinFlux, Vlad-Călin Nistor, recently pled guilty to money laundering. Nistor was not the only one, as 14 other defendants, including a car wash owner, all admitted to playing a role in laundering more than $1.8 million in Bitcoin.

A massive scheme unravels

The defendants participated in a multi-million dollar transactional scheme which had the goal to trick US residents out of their money. According to a recent announcement by the US Department of Justice, the guilty pleas were issued at the Eastern District Court at Kentucky.

The guilty pleas did not come simultaneously, however. Four of them were made over the past 24 days by Romanian nationals. Meanwhile, the last two came only in the 24 hours prior to the announcement's publication on Thursday.

The announcement also revealed that the defendants participated in an online auction fraud, racketeering conspiracy, as well as defrauding millions of dollars by selling goods that they did not possess.

How did the scheme work?

From what is known, the scheme seems to have started years ago, back in 2013. Back then, Bodgan-Stefan Popescu — the mentioned Romanian car wash owner — started managing the spread of fake advertisements, and account information for IP address anonymizing services. His goal was to defraud the American people.

He also connected them with other participants of the racketeering scheme. They would then contact the victims of the scheme via the phone, and impersonate different people, such as the eBay customer service, and even military members.

Meanwhile, Popescu himself collected BTC, most commonly via online scams. He allegedly sent the collected money to Nistor, who would then launder the funds that his exchange, CoinFlux, was generating. He exchanged digital coins for fiat currencies, which he proceeded to deposit into his bank accounts. The accounts were opened under the names of family members and employees.

The Department of Justice's statement quoted Michael D'Ambrosio, the Assistant Director at the US Secret Service, Office of Investigations. He said that “Through the use of digital currencies and trans-border organizational strategies, this criminal syndicate believed they were beyond the reach of law enforcement. However, as this successful investigation clearly illustrates, with sustained, international cooperation, we can effectively hold cyber criminals accountable for their actions, no matter where they reside.”