NEW YORK -- Federal officials filed bribery charges on Thursday against the former chairman of a now-defunct New Jersey credit union linked to a bizarre and illegal bitcoin exchange conspiracy.
The U.S. Attorney’s Office for the Southern District of New Yok announced the indictment of Trevon Gross and charged him with accepting more than $150,000 in bribes while he served as chairman of Helping Other People Excel Federal Credit Union, an institution that primarily served low-income local residents and was based in Jackson, N.J.
Gross is charged with one count of corruptly accepting payments as an officer of a financial institution, which carries a maximum penalty of 30 years in prison.
Gross, 46 of Jackson, surrendered to the FBI earlier Thursday. He is the founder and lead pastor at the Hope Cathedral in Jackson. The church’s website states that Gross “was licensed to preach at the age of 14.”
According to the indictment, Gross was bribed by the operators of Coin.mx, an illegal internet-based Bitcoin exchange operated by co-defendant Anthony Murgio.
Sometime in 2014, in an effort to evade potential scrutiny from financial institutions and others about the nature of Coin.mx, Murgio, his colleague Yuri Lebedev, and their co-conspirators acquired control of Hope FCU. Gross, chairman of Hope, allowed Murgio, Lebedev, and their co-conspirators to take control of the CU and helped in their efforts in exchange for bribes, which Gross asked Murgio to pay to bank accounts under Gross’ control, according to the indictment.
Gross used the total bribe proceeds of $150,000 on personal expenses, including payments on his personal credit cards. Also, with Gross cooperation, Murgio placed his co-conspirators, including Lebedev, onto Hope FCU’s board and transferred Coin.mx’s banking operations to Hope FCU, the U.S. Attorney’s Office said.
Murgio and Lebedev, who have already been under arrest since July of last year, operated Coin.mx in violation of federal anti-money laundering laws and regulations. The government alleged that Murgio and his co-conspirators engaged in “substantial efforts” to evade detection of their unlawful bitcoin exchange scheme by operating through a phony front company called ‘Collectables Club,’ and by maintaining a corresponding phony website.
By committing these fraudulent acts, they sought to deceive the major financial institutions through which they operated into thinking their bitcoin exchange business was just a “members-only” association of individuals who discussed, bought, and sold collectable items, such as stamps and sports memorabilia, the indictment stated.
Murgio and his co-conspirators are also alleged to have deceived U.S. banks and credit card issuers into authorizing credit and debit card payment and Automated Clearing House transactions to buy bitcoins through Coin.mx. The indictment charged that Murgio and his co-conspirators “deliberately misidentified and miscoded” customers’ credit and debit card transactions, in violation of bank and credit card company rules and regulations, and limited the dollar amount of individual transactions engaged in by their customers, in order to deceive banks into allowing the transactions to be completed, and avoid arousing suspicion from the banks.
All told, Murgio, Lebedev, and their co-conspirators operated Hope FCU as a “captive bank” for their illegal bitcoin exchange until at least early 2015.
At that time, after discovering that “substantial” payment processing activity was conducted through Hope FCU, the National Credit Union Administration pressured the credit union to stop such activity. However, Murgio simply found new ways to conduct his illegal transactions through overseas channels.
In October 2015, NCUA placed
Gross is scheduled to be arraigned Friday.
Murgio and Lebedev are scheduled to face trial on October 31. Both have pled not guilty.
Reuters reported that Coin.mx was owned by an Israeli named Gery Shalon, who has been accused of perpetrating a massive hacking scheme against dozen companies’ networks – including those of JP Morgan -- and stealing the personal information of more than 100 million people.
