United States v. Iossifov, No. 21-5404 (6th Cir. 2022)Annotate this Case
A Romanian organization, the Alexandria Online Auction Fraud Network (AOAF), used fraudulent online advertisements on websites like eBay, Craigslist, and Amazon to convince unknowing U.S. purchasers to send payments for high-value items that did not actually exist. After receiving the payments through vehicles like gift cards and prepaid debit cards, AOAF money launderers in the U.S., including Brown, converted the payments into Bitcoin currency, which was then transferred back to Romania. Foreign Bitcoin exchange businesses including RG, Iossifov’s Bulgaria-based business, then transferred the Bitcoin balances to cash on behalf of AOAF fraudsters. About 900 victims never received the items for which they paid. The government learned about the scheme in 2014 when it discovered that an American citizen living in Kentucky was laundering funds on behalf of an online fraud organization; the individual became a confidential source.
The Sixth Circuit affirmed Iossifov and Brown’s convictions and sentences under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. 1962(d), and Iossifov’s additional conviction for conspiring to launder money 18 U.S.C. 1956(h). The court rejected venue, jurisdiction, and Due Process claims, a contention that Bitcoin does not fall under the money laundering statute, and challenges to sentencing enhancements and evidentiary rulings.