Already Behind Bars, Convicted Fraudster Now Charged with Stealing $290K in Seized Crypto from U.S. Government

LEXINGTON, Ky. – A Bulgarian national already serving a federal prison sentence for an online auction fraud scheme now faces new charges for allegedly stealing and laundering approximately $290,000 in cryptocurrency that had been forfeited to the United States—funds that were supposed to go toward restitution for his victims, federal prosecutors announced Thursday.

Rossen G. Iossifov, 53, made his initial appearance in federal court in the Eastern District of Kentucky on charges of destruction or removal of property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering. If convicted, he faces up to 25 years in prison.

“Having been convicted of a widespread online auction fraud scheme targeting U.S. victims, Iossifov is now charged with moving cryptocurrency that he obtained from that crime, in violation of a court’s forfeiture order,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Defendants who flout lawfully entered orders and portions of their criminal sentences in prior federal cases will be charged with such obstructive conduct. The Department of Justice will take all steps to ensure that justice is served for victims of complex financial crimes.”

According to court documents, Iossifov was convicted in 2021 in the Eastern District of Kentucky for a fraud scheme that victimized Americans. Evidence at his trial showed he had laundered nearly $5 million in cryptocurrency in less than three years. He was sentenced to 111 months in prison and ordered to pay $2,642,297.43 in restitution to victims, with specific cryptocurrency accounts ordered forfeited to the United States.

But in January 2024, while still serving that sentence, Iossifov allegedly conspired to remove $290,000 from the forfeited cryptocurrency accounts—transferring the funds through multiple cryptocurrency exchanges and illicit mixing services to prevent the government from taking possession, prosecutors said.

First Assistant U.S. Attorney Jason Parman for the Eastern District of Kentucky condemned the alleged conduct: “Iossifov’s alleged efforts to evade a lawful forfeiture order and obscure the movement of criminal proceeds represent a direct affront to the authority of the federal courts. Such conduct, if proven, reflects a calculated attempt to undermine the rule of law and to compromise the rights of victims who have already suffered significant financial harm.”

Special Agent in Charge Robert Holman of the U.S. Secret Service Louisville Field Office added: “Iossifov’s deliberate attempt to remove and launder lawfully seized funds is a direct challenge to our justice system and a blatant disregard to his victims’ rights. We are committed to ensuring that victims of online fraud receive justice, and that individuals who attempt to circumvent lawful court orders are held accountable.”

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

‘Ransomware Negotiator’s Double Life: He Helped Victims by Day, Extorted Them by Night’

MIAMI – A Florida ransomware negotiator who betrayed the very victims he was hired to protect—feeding their confidential negotiating positions to cybercriminals and even helping deploy ransomware against additional targets—was sentenced Thursday to 70 months in federal prison, prosecutors announced.

Angelo Martino, 41, of Land O’Lakes, Florida, pleaded guilty on April 14 to conspiring to interfere with interstate commerce through extortion. The sentence, handed down in the Southern District of Florida, caps a scheme that saw Martino abuse his position at a U.S.-based cyber incident response company to enrich himself while devastating multiple businesses.

“Angelo Martino’s victims shared heartbreaking accounts of how their businesses were nearly destroyed, while the people they hired to help them instead betrayed them to ransomware gangs,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Today’s sentence accounts for the harm Martino caused and demonstrates that the Department of Justice can and will identify and prosecute cybercriminals to the fullest extent of the law.”

According to court documents, beginning in April 2023, Martino conspired with operators of the notorious BlackCat/ALPHV ransomware variant to extort five different victims. He was paid by the attackers to provide confidential information about his employer’s clients’ negotiating positions and strategies—enabling the criminals to maximize the ransoms they demanded.

But Martino’s betrayal didn’t stop there. He also conspired with two former cybersecurity professionals—Kevin Martin, 36, of Texas, and Ryan Goldberg, 41, of Georgia—to successfully deploy BlackCat ransomware against additional victims across the United States between April and November 2023. After extorting one victim for approximately $1.2 million in Bitcoin, the three split their share and laundered the proceeds through various means.

“He was hired to help victims in a moment of crisis,” said U.S. Attorney Jason A. Reding Quiñones for the Southern District of Florida. “Instead, Martino betrayed them, fed their confidential negotiating positions to ransomware criminals, and helped squeeze them for more money. This case sends a clear message: we will pursue the hackers who deploy ransomware, the insiders who enable them, and the money they steal from American victims.”

Martin and Goldberg were each sentenced to 48 months in prison on May 1 by Judge K. Michael Moore.

FBI Cyber Division Assistant Director Brett Leatherman underscored the betrayal: “Angelo Martino sold out the very victims he was hired to represent, handing their confidential negotiating positions to BlackCat actors to drive up ransoms and enrich himself. Today’s sentence demonstrates that the FBI will pursue not just the criminals who deploy ransomware, but the insiders who enable them.”

‘Decade of Fraud’: EagleBank Admits to Allowing Clients to Run $6.3M Check Kiting Scheme, Pays $9.7M to Settle

WASHINGTON – EagleBank, a community bank operating in Maryland, Virginia, and the District of Columbia, has agreed to pay more than $9.7 million to resolve a federal investigation into years of willful Bank Secrecy Act violations—including allowing two favored clients to operate a check kiting scheme for more than a decade while compliance officers repeatedly tried to stop it, the Justice Department announced Tuesday.

The bank and its parent entity, Eagle Bancorp Inc., entered into a non-prosecution agreement and admitted to failing to establish an adequate anti-money laundering and countering the financing of terrorism (AML/CFT) program between 2010 and 2021, in violation of federal law.

“For more than a decade, EagleBank knowingly allowed favored clients to operate a check kiting scheme, even as compliance personnel repeatedly tried to stop it,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Financial institutions are the first line of defense against financial crimes and must be gatekeepers, not gateways, for criminal activity. As this resolution makes clear, when banks deliberately allow unlawful conduct to persist, the Criminal Division will ensure they are held accountable.”

According to the non-prosecution agreement, EagleBank admitted that senior bank executives repeatedly overrode the efforts of compliance personnel to close accounts and end the illicit conduct. In one instance, the bank allowed a father and son—the father being a friend and business partner of EagleBank’s former chairman and CEO, who resigned in 2019—to operate a check kiting scheme through their accounts.

Check kiting involves writing a check for an amount greater than the available balance and depositing it into an account at another bank, exploiting the delay in processing to create illusory funds. Fraudsters often write bad checks in a circular pattern among banks to cover overdrafts. In this case, EagleBank’s facilitation of the scheme resulted in a loss of nearly $6.3 million to another financial institution.

“It is simply unacceptable for financial institutions to permit fraud under their noses,” said U.S. Attorney Brian D. Miller for the Middle District of Pennsylvania. “Our office is determined to investigate corporate crimes and fight financial fraud.”

Under the terms of the agreement, EagleBank will pay a fine of $9,057,821.62 to the United States and forfeit $736,515—representing proceeds from overdraft fees generated by the kiting scheme. The bank has also agreed to implement additional remedial measures to strengthen its AML/CFT program, cooperate fully with the Department’s investigation, and report any future violations of federal criminal law.

FBI Criminal Division Assistant Director Heith Janke emphasized the broader impact: “EagleBank’s failure to stop major fraud weakened the financial system and enabled criminal activity. The FBI will continue working with partners to hold institutions accountable and protect the public.”

The Bank Integrity Unit focuses on investigating and prosecuting banks and other financial institutions whose actions threaten the integrity of the individual institution or the broader financial system.