The owner of a now-closed Romanian cryptocurrency exchange called CoinFlux has pleaded guilty to laundering around $ 1,8 million in a fraudulent plan involving fake eBay ads and a car wash.
The fraud strategy
Vlad-Calin Nistor and 14 other defendants, including a car wash owner, have all admitted to being guilty in the Eastern District Court of Kentucky for their involvement in a poorly designed cyber-fraud plan that stole millions of dollars from residents in the United States, selling goods that didn't actually exist.
Beginning in 2013, defendants started running fake ads on sites like eBay and Craigslist for various items including cars. The group often pretended to be part of the United States military personnel who had to sell their assets before starting a period of service.
They even created a fake call center to buffer any concerns that victims might have about advertisements. After the victim sent the payment, the group began the process of transferring money from the United States to Romania.
Most of the time, this was done by converting illicit funds into cryptocurrencies, usually bitcoins, by transferring the sum to the CoinFlux cryptocurrency platform, where it would later be exchanged for local currency.
According to a statement released by the United States Department of Justice, the project leader was Bogdan-Stefan Popescu, the owner of the car wash in Bucharest. He provided instructions to Nistor and Coinflux for the transfer of illicit funds into bitcoins and selected bank accounts, which were usually set up with the names of his employees and family members.
The illusion of being untraceable thanks to digital currencies
"Through the use of digital currencies and cross-border organizational strategies, this criminal group believed it was beyond the reach of law enforcement agencies," said Michael D'Ambrosio, assistant director of the Secret Service Investigation Office. of the United States.
In December 2018, Nistor was arrested on an international warrant for charges of money laundering, fraud and involvement in organized crime. Together with the other defendants, he was promptly extradited to the United States the following month.
At the time of his arrest, Nistor's lawyer argued to the Romanian Court of Appeal that there was no way to prove that the bitcoins in question came from criminal activities.
CoinFlux advertised itself as a 24-hour market platform that provided a local fiat gateway for Romanian traders. The exchange was preparing to celebrate its third anniversary with zero transaction costs, less than a week before Nistor's arrest.
Five days later, following the arrest of Nistor, CoinFlux's Twitter account said it was "in the unfortunate situation of temporarily stopping any exchange of digital currency."
In a post, the CoinFlux marketing manager said that their bank accounts were frozen and temporarily denied access to the site for an "unexpected investigation". All 15 defendants now await sentencing.
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