We continue our top ten countdown of financial crimes prosecuted by IRS:CI during 2021. In case #5, the IRS continued to focus on tax crimes conducted with digital currency.
To recall, IRS:CI case #6 involved a California man sentenced to three years in prison for conducting unlicensed cyber coin transactions—often with drug traffickers and other criminal elements.
In this episode, the Criminal Investigation Unit of the IRS pursued a criminal network headquartered in Bulgaria. They victimized at least 900 Americans who paid money for online goods that were never delivered.
Rossen Iossifov is formerly of Bulgaria, but based his business, RG Coins, in that country. Mr. Iossifov worked loosely with approximately 20 others engaged in financial crimes that violate the U.S. federal Racketeer Influenced and Corrupt Organizations ACT (RICO). The group engaged in fraudulent sales and money laundering.
Mr. Iossifov is part of a Bulgarian criminal network known as the Alexandria Online Auction Fraud (AOAF) Network. The basic scheme of the AOAF network is to place fraudulent ads for high-ticket items on American sales and auction websites like eBay and Craigslist. The group lifted and used names and images found on the internet to give their ads credibility. The group often advertised cars that they advertised as needing to be sold prior to military deployment. Group members posted pictures of themselves dressed in military fatigues with the supposed cars for sale.
Once an American consumer forwarded money for a vehicle, it was received by network members living in the U.S. who converted the payment into cryptocurrency. The coins were then transferred to money launderers like Mr. Iossifov.
During his two-week trial, prosecutors presented evidence showing Mr. Iossifov offered discounts to AOAF Network members, and catered to criminal interests, allowing him to launder approximately $5 million in digital coins over three years. Mr. Iossifov’s portion of the crime added up to $7 million in money taken from unsuspecting Americans and netted him $184,000 from those transactions.
Mr. Iossifov, 53 years old, was convicted by a federal jury of conspiracy to commit a RICO offense as well as conspiracy to commit money laundering. Sentenced to 10 years in prison, he will be eligible for parole in about eight years.
Of the other 20 individuals identified as part of the AOAF network, three remain at large. The others have been convicted and sentenced to lengthy prison terms.
Criminal tax matters pay off rather badly. If you are involved in criminal tax fraud or believe you could be the subject of an IRS criminal investigation, speak with an experienced tax defense attorney as soon as possible.
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The tax lawyers at Robert J. Fedor, Esq., LLC help individuals and entities nationwide respond to challenges including criminal tax charges, IRS audits, and other tax controversies. When you need straightforward strategic advice locally or abroad, contact us or call 800-579-0997.
