Jailed crypto launderer allegedly moved $290K in forfeited coins — from his prison cell 🪙

Federal prosecutors have charged a Bulgarian man already serving a 10-year sentence for laundering money through a cryptocurrency exchange with running a second scheme from inside federal prison that allegedly moved roughly $290,000 in crypto a court had ordered him to forfeit.

Rossen Iossifov, 53, made his first appearance this week in the Eastern District of Kentucky on charges of removing property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering, the Department of Justice said. According to prosecutors, Iossifov conspired in January 2024 to withdraw and transfer the forfeited cryptocurrency through multiple exchanges and mixing services — tools that pool funds to obscure their trail — in an effort to keep the assets out of the government's reach.

"Defendants who flout lawfully entered orders from earlier cases will be charged for that obstruction," Assistant Attorney General A. Tysen Duva of the Justice Department's Criminal Division said in a statement. The U.S. Secret Service, which investigated both cases, described the alleged transfers as a "direct challenge" to the courts and to his victims.

Iossifov owned and operated RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria. He was convicted in 2021 of racketeering and money-laundering conspiracies tied to the Alexandria Online Auction Fraud network, a Romanian ring that posted fake listings for cars and other high-value goods on sites including eBay and Craigslist. Trial evidence showed the scheme collected payments from at least 900 American victims and funneled the proceeds to overseas launderers, with Iossifov converting the crypto to cash at the end of the chain. He was ordered to pay more than $2.6 million in restitution and to forfeit the digital assets now at the center of the new case, and had been serving a 111-month term when the alleged transfers took place.

If convicted on the new charges, Iossifov faces up to 25 additional years in prison on top of his current sentence. The Justice Department's computer crime section, which has handled the prosecution, said it has secured convictions of more than 180 cyber and intellectual-property criminals since 2020 and court orders returning over $350 million to victims. The Secret Service is leading the investigation into the alleged prison-era transfers.