Darknet’s Longest-Running Bitcoin Money Laundering Service Mastermind Convicted

Darknet’s Longest-Running Bitcoin Money Laundering Service Mastermind Convicted

A federal jury in Washington, D.C., has delivered a guilty verdict against Roman Sterlingov, a dual Russian-Swedish national, for orchestrating the operation of Bitcoin Fog, the longest-running bitcoin money laundering service on the darknet.

Deputy Attorney General Emphasizes Relentless Pursuit of Justice

Deputy Attorney General Lisa Monaco underscored the determination of the investigative team in capturing Sterlingov, stating that the relentless pursuit of justice involved tracing bitcoin through the blockchain.

She emphasized that irrespective of one’s location, adherence to U.S. law is imperative when cryptocurrency services extend their reach to the United States.

Decade-Long Operation: Bitcoin Fog Handled Over 1.2 Million Bitcoin

Court documents and trial evidence reveal that Sterlingov, aged 35, was actively involved in running Bitcoin Fog from 2011 to 2021. Functioning as a cryptocurrency “mixer,” Bitcoin Fog gained notoriety as a preferred money laundering service for criminals.

Over the ten-year span, it facilitated the movement of more than 1.2 million bitcoin, valued at approximately $400 million during the transactions.

The majority of these funds originated from darknet marketplaces and were linked to illegal activities such as narcotics, computer crimes, identity theft, and child sexual abuse material.

Acting Assistant Attorney General Highlights Mistaken Belief in Anonymity

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division emphasized the mistaken belief among Sterlingov and his customers that Bitcoin Fog could provide anonymity for their illicit transactions.

The guilty verdict, according to Argentieri, reflects the commitment of the Criminal Division to unveil and prosecute those exploiting technology to conceal criminal activities.

U.S. Attorney Affirms Commitment to Combatting Cyber Crimes

U.S. Attorney Matthew M. Graves for the District of Columbia asserted that darknet criminals, including operations like Bitcoin Fog, cannot ensure the anonymity claimed for cryptocurrency transactions.

The conviction stands as a demonstration of the United States’ determination to combat the use of technology for cyber crimes.

IRS Criminal Investigation and FBI Lead the Case

Chief Jim Lee of IRS Criminal Investigation (IRS-CI) highlighted the evidence presented during the trial, showcasing Sterlingov’s laundering of hundreds of millions in illicit funds from the dark web through Bitcoin Fog.

IRS-CI special agents, equipped to follow complex financial trails, are dedicated to holding individuals accountable for their crimes.

Guilty Verdict: Sterlingov Faces Maximum Penalties

The federal jury convicted Sterlingov on charges of money laundering conspiracy and sting money laundering, each carrying a maximum penalty of 20 years in prison.

Additionally, he was found guilty of operating an unlicensed money transmitting business and money transmission without a license in the District of Columbia, with each offense carrying a maximum penalty of five years in prison.

The sentencing will be determined by a federal district court judge, considering the U.S. Sentencing Guidelines and other statutory factors.

Collaborative Investigation: IRS-CI, FBI, and International Support

The IRS-CI District of Columbia Cyber Crime Unit and FBI Washington Field Office spearheaded the investigation, with valuable assistance provided by the Justice Department’s Office of International Affairs and FBI’s Virtual Asset Unit.

Collaborative support came from Europol, the Swedish Economic Crime Authority, Swedish Prosecution Authority, Swedish Police Authority, and the General Inspectorate of Romanian Police, Directorate for Combatting Organized Crime, and Directorate for Investigating Organized Crime and Terrorism.

Prosecution Team and Paralegal Specialists

Trial Attorneys Jeff Pearlman and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher B.

Brown for the District of Columbia led the prosecution. Pelker and Brown are members of CCIPS’ National Cryptocurrency Enforcement Team (NCET).

Paralegal Specialist Divya Ramjee and Paralegal Specialist Angela De Falco for the District of Columbia provided valuable assistance throughout the legal proceedings.*

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