Rossen Lossifov already knew the consequences of laundering illegal crypto assets, as he'd spent nearly six years behind bars doing time for laundering millions in online action fraud proceeds. So it all came as a surprise when prosecutors revealed he tried to run the same scheme again, this time to drain a Kraken account the US government had already seized from him while still being locked up for the original crime.
The Justice Department unveiled new charges on July 9th against the 53 year old Bulgarian national, who’s currently serving a 111 month federal sentence conspired in January 2024 to withdraw and transfer crypto worth $290,000 out of a Kraken account that the federal court had ordered forfeited as part of his original sentence in 2021.
According to prosecutors the assets were allegedly passed through several exchanges and illicit mixing services and converted to Fiat before the US could regain possession. What makes this case a fragile matter is the timing as Lossifov’s 2021 conviction came with a forfeiture judgement and a restitution order of an estimated $2,242,297.43, owed to the roughly 900 Americans defrauded by the Alexandria Online Auction Fraud Network, a Romania-based ring that used fake Craigslist and eBay listings for vehicles that never existed.
Lossifov operated a crypto exchange called RG coins, a Sofia based exchange that converted the group's proceeds into crypto and cash, reportedly pocketing over $184,000 for himself in the process. Earlier evidence also revealed he laundered over $5 million in crypto in less than 3 years. Prosecutors now say he used the same cash out instincts to try to erase a forfeiture order while behind bars.
Assistant Attorney General A. Tysen Duva framed the new charges as a warning shot to anyone tempted to test a forfeiture order from prison, citing that defendants who ignore lawfully entered sentencing terms will be charged for the obstruction itself.
First Assistant US Attorney Jason Parman for the Eastern District of Kentucky went further, calling the alleged scheme a calculated attempt to undermine judicial authority. He has been ordered by the court to pay over $2.6 million in restitution and forfeit crypto assets.
The investigation was part of a bigger operation involving 97 countries and territories. The campaign led to 5,811 arrests and the interception of $293 million in assets tied to fraud and money laundering.
If convicted, Iossifov faces up to 25 years on top of the time he's already serving as he is now charged with removing property to prevent seizure, aiding and abetting and conspiracy to commit money laundering. Though the indictment is still being treated as an allegation, Lossifov is presumed innocent unless proven guilty.