When Bad People Do Bad Things

March 9, 2016 at 8:35 am Leave a comment

News broke more than a year ago that HOPE FCU, a low-income credit union based in New Jersey, was being used to facilitate an illegal Bitcoin exchange.  It has never been clear to me precisely how the credit union was taken over by the exchange operators.  According to an indictment by the U.S. Attorney’s Office for the Southern District of New York (i.e. Manhattan) issued last week, we now know the answer.

The Bitcoin might be cutting edge technology, but in the end it took a good old-fashioned bribe, totaling $150,000, to Trevon Gross, the chairman of the credit union’s board.  As covered in a previous blog, in July of 2015 the FBI arrested Anthony Murgio and Yuri Lebedev on charges of running an unlicensed Bitcoin operation.  According to the FBI, the two conspired to run an exchange in which people who wanted to keep their transactions quiet could convert their money into Bitcoins.  Remember, the Bitcoin is ideal for money laundering since transactions are made computer to computer.  At first, the two opened up an account at a bank for a “collectibles club.”  But business was booming, so eventually they came up with the idea of taking over a credit union to facilitate the transactions. 

This is where Mr. Gross came in.  The FBI alleges that in 2014, Mr. Lebedev and his co-conspirators worked with Mr. Gross “to take control of HOPE FCU.”  According to the FBI, in exchange for bribes, Mr. Gross helped Murgio and Lebedev take control of the board of directors and then the credit union.  The NCUA placed HOPE in conservatorship in October 2015 after which it was liquidated.     

Entry filed under: General, Legal Watch, technology. Tags: , .

NY Courts Begin to Grapple with Dodd-Frank The Good and The Bad of the Matz Years

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed

Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 511 other followers