Incarcerated Money Launderer Accused of Stealing Seized Cryptocurrency

A Bulgarian national, already serving a lengthy prison sentence for his role in laundering millions for American fraud victims, is now facing new charges for allegedly stealing $290,000 in government-seized cryptocurrency while incarcerated.

Rossen G. Iossifov, 53, appeared in federal court in Kentucky this week to face charges of removal of property to prevent seizure and conspiracy to commit money laundering. Prosecutors allege that in January 2024, Iossifov, while imprisoned, worked with accomplices to move the substantial sum of cryptocurrency from a seized account. The funds were reportedly routed through multiple cryptocurrency exchanges and mixing services in an attempt to obscure their origin and prevent them from being recovered by the government.

This latest accusation stems from Iossifov's previous conviction in 2021, which involved his operation of RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria. This exchange served clients who were members of the Alexandria Online Auction Fraud Network, a criminal group that defrauded at least 900 Americans. The network would post fake advertisements for high-value goods on platforms like Craigslist and eBay, and once victims paid, the funds were converted into cryptocurrency and laundered by individuals like Iossifov.

Evidence presented in the earlier case indicated that Iossifov specifically tailored his business to cater to criminal clients. He offered favorable exchange rates to fraudsters and allowed members of the criminal ring to exchange cash for cryptocurrency without requiring identification or demanding documentation regarding the source of the funds. Over a period of less than three years, he reportedly collected over $184,000 after laundering nearly $5 million for four members of the fraud network.

In addition to his prison sentence of 121 months for the initial conviction, the court had ordered Iossifov to pay more than $2.6 million in restitution to the victims of that scheme. The cryptocurrency at the center of the new charges was also ordered forfeited.

The U.S. Secret Service highlighted the severity of Iossifov's alleged actions. Special Agent Robert Holman stated that the attempt to remove and launder lawfully seized funds represents a direct challenge to the justice system and a blatant disregard for victims' rights. The agency emphasized its commitment to ensuring justice for victims of online fraud and holding accountable those who try to circumvent court orders.

If convicted of the new charges, Iossifov faces a potential maximum sentence of 25 years in prison. This case underscores the persistent challenges law enforcement faces in recovering illicitly obtained assets, particularly cryptocurrency, even when perpetrators are already incarcerated.