NEW YORK – The former HOPE FCU board chair and CEO and a board member face lengthy prison sentences for their roles in taking control of the credit union and using it to conceal an illegal Bitcoin operation that ran tens of millions of dollars in ACH transactions.
A federal jury last week found Trevon Gross, the former board chair and CEO of the Helping Other People Excel Federal Credit Union in Lakewood, N.J., and former board member Yuri Lebedev guilty of several felony counts following a four-week trial in U.S. District Court in New York City.
Between 2013 and July 2015, Lebedev helped operate Coin.mx, an unlawful internet-based Bitcoin exchange, along with Anthony Murgio, the founder of Coin.mx. To conceal the Bitcoin exchange, they operated a fake front company to open bank accounts and trick financial institutions into believing the exchange was a members-only association of individuals who bought and sold collectible items and memorabilia.
They also deceived financial institutions by misidentifying and miscoding Coin.mx customers’ credit and debit card transactions. Through the illegal Coin.mx scheme, Lebedev and Murgio illegally processed more than $10 million in Bitcoin-related transactions, according to federal prosecutors.
In an effort to evade discovery when the financial institutions became suspicious, in 2014 Lebedev and Murgio gained control of HOPE FCU after making more than $150,000 in illegal bribes to Gross, who also was a pastor of the Hope Cathedral in Jackson. Gross directed Lebedev and Murgio to deposit the bribe money into the church’s bank accounts.
With Gross’ assistance, Murgio installed Lebedev and other co-conspirators on HOPE’s board of directors and transferred Coin.mx’s banking operations to the credit union. Gross also ceded operational control of the credit union to those board members according to court documents.
To cover up their control of the credit union, Gross, Lebedev and Murgio obstructed an NCUA examination, lied to examiners and manipulated the books to conceal the fact that the tiny cooperative founded to serve low-income members was processing tens of millions of dollars of transactions without required controls.
The following year NCUA placed the credit union into conservatorship and liquidated it.
Lebedev and Gross were found guilty of making corrupt payments to an officer of a financial institution and receipt of corrupt payments by an officer of a financial institution, respectively, each of which carries a maximum sentence of 30 years in prison.
They were also found guilty of conspiracy to make and receive corrupt payments, and obstructing NCUA’s examination and making false statements to the federal agency which carries a maximum sentence of five years in prison. Lebedev was also found guilty of wire fraud, bank fraud, and conspiracy to commit wire and bank fraud, each of which carries a maximum sentence of 30 years in prison.
Sentencing hearings are scheduled for July 20.
Murgio pleaded guilty in January to charges associated with operating Coin.mx. His sentencing hearing is pending.
in Credit Union News