A Russian citizen has been nailed for crypto fraud in one of the highest-profile cybercriminal cases on record. Sergey Medvedev, a Russian national who owned and ran a crypto escrow service, has pleaded guilty to fraud and racketeering charges in the United States.
Liberty Reserve and the Infraud Organization
The 33-year-old admitted in a plea before the United States District Court for Nevada on June 26 that he had established and operated the Infraud Organization, an international criminal enterprise that facilitated the sale of equipment and credit cards. The company worked for about eight years, and it trafficked in items such as stolen identity information, malware, and much more.
The Infraud Organization started to operate in 2010. In the years that it operated, the forum conducted over $560 million in transactions. In total, the forum helped to facilitate the sale of 4 million compromised payment card numbers. Several of the company’s victims included top credit card manufacturers and payment processors like MasterCard, American Express, and VISA.
Medvedev also admitted that he ran the Liberty Reserve, an exchange and escrow service that facilitated Bitcoin transactions for the members of his criminal enterprise. At the time the Infraud Organization shut down, it had about 10,900 members.
In February 2018, the Department of Justice indicted Medvedev – as well as several of his partners – on for one count of racketeering and seven counts of aiding and abetting fraud. The indictment stated that the Infraud Organization members used the Liberty Reserve, Bitcoin and several other digital assets, to launder their funds.
Medvedev himself was arrested in Thailand later that year. At the time, the Bangkok Post reported that law enforcement agencies found about 100,000 BTC in his possession.
His recent plea didn’t mention the extent to which his service conducted Bitcoin transactions. However, he pocketed $1.04 million in digital currencies from the exchange. The sentencing hearing for the Russian cybercriminal has been scheduled for December 9.
Aleksei Burkov: Dark Web Criminal Par Excellence
Medvedev is only the second Russian cybercriminal to get sentencing in as many weeks. On the same day that he entered his plea, the Department of Justice sentenced famous criminal Aleksei Burkov to nine years in prison. According to the sentencing document, Burkov ran Cardplanet, a platform on the Dark Web, where people could place ads and sell information gotten from stolen credit cards. The Justice Department alleged that most of the cards whose information was being transacted belonged to Americans. The data sold on the platform has helped to facilitate about $20 million in fraudulent credit card purchases.
The cybercriminal also allegedly ran an exclusive club for fellow criminals. Participants in the club could advertise their stolen goods and illegal activities. Each prospective member had to pay $5,000 to gain access to the platform, and they all needed to offer three existing members to act as references.
Authorities eventually seized him in 2015 while he was in Israel. The Russian government tried to get him out through a hostage swap with the Israelis, but when both parties agreed to a deal, the latter had sent him to the United States to face justice.