Approved;    

NicoiE YOUNG CHOI
Assistant United States Attorneys

Before: THE HONORABLE RONALD L. ELLIS
United States Magistrate Judge
Southern District of New York

MAG

UNITED STATES OF AMERICA SEALED COMPLAINT

V. Violations of 18 U.S.C
371, 1956, 1960 and
ANTHONY R. MURGIO, 2; 31 U.S.C. 5318(g)
and 5322(a)
Defendant.

COUNTY OF OFFENSE:
NEW YORK

SOUTHERN DISTRICT OF NEW YORK, 88.:

JOEL DECAPUA, being duly sworn, deposes and says that he is
a Special Agent with the Federal Bureau of Investigation 
and charges as follows:

COUNT ONE
(Conspiracy to Operate an
Unlicensed Money Transmitting Business)

1. From at least in or about April 2013 to at least in or
about July 2015, in the Southern District of New York and
elsewhere, ANTHONY R. MURGIO, the defendant, and others known
and unknown, unlawfully, willfully and knowingly, did combine,
conspire, confederate, and agree together and with each other to
commit an offense against the United States, to wit, to violate
18 U.S.C. 1960.

2. It was a part and an object of the conspiracy that
ANTHONY R. MURGIO, the defendant, and others known and unknown,
unlawfully, willfully and knowingly would and did conduct,
control, manage, supervise, direct, and own all and part of an
unlicensed money transmitting business, to wit, Coin.mx, d/b/a

 

?Collectables Club,? d/b/a ?Currency Enthusiasts? (?Coin.mx?) in
violation of Title 18, United States Code, Section 1960.

Overt Acts

3. In furtherance of the conspiracy and to effect the
illegal object thereof, the following overt acts, among others,
were committed in the Southern District of New York and
elsewhere:

a. On or about April 30, 2013, ANTHONY R. MURGIO,
the defendant, established an account at a particular financial
institution 

b. On or about October 17, 2013, MURGIO registered
the domain name ?Coin.mx? with a domain registrar;

c. Between at least in or about October 2013 and at
least in or about February 2015, a co?conspirator not named as a
defendant herein exchanged emails and other electronic

communications with MURGIO regarding Coin.mx;

d. On or about May 9, 2014, agreed to join the
board of a credit union in part to oversee a financial account
through which Coin.mx processed customer transactions;

e. From in or about December 2013, through at least
in or about November 2014, in an effort to promote Coin.mx and
expand its customer base, MURGIO exchanged numerous emails with
a company located in New York, New York.

(Title 18, United States Code, Section 371.)

COUNT TWO
(Operation of an Unlicensed Money Transmitting Business)

4. From at least in or about April 2013 to at least in or
about July 2015, in the Southern District of New York and
elsewhere, ANTHONY R. MURGIO, the defendant, willfully and
knowingly did conduct, control, manage, supervise, direct, and
own all or part of an unlicensed money transmitting business
affecting interstate and foreign commerce, to wit, Coin.mx, an
internet-based Bitcoin exchange business, which failed to comply
with the money transmitting business registration requirements
set forth in federal law and regulations.

(Title 18, United States Code, Sections 1960 and 2.)

 

 

 

COUNT THREE
(Money Laundering)

5. From at least in or about October 2013 to at least in
or about July 2015, in the Southern District of New York and
elsewhere, ANTHONY R. MURGIO, the defendant, in an offense
involving and affecting interstate and foreign commerce, did
transport, transmit, and transfer, and attempt to transport,
transmit, and transfer a monetary instrument and funds from a
place in the United States to and through a place outside the
United States and to a place in the United States from and
through a place outside the United States, with the intent to
promote the carrying on of specified unlawful activity, to wit,
to promote the operation of the unlawful money transmitting
business Coin.mX, in violation of Title 18, United States Code,
Section 1960, MURGIO transferred hundreds of thousands of
dollars from bank accounts within the United States to bank
accounts outside of the United States, and caused others to
transfer hundreds of thousands of dollars to bank accounts
within the United States from bank accounts outside of the
United States, including via certain wire transfers which
cleared through New York, New York.

(Title 18, United States Code, Section 1956.)

COUNT FOUR
(Willful Failure to File a Suspicious Activity Report)

6. From at least in or about October 2013 to at least in
or about July 2015, in the Southern District of New York and
elsewhere, ANTHONY MURGIO, the defendant, willfully failed to
report suspicious transactions relevant to possible violations
of laws and regulations, as required by the Secretary of
Treasury, to wit, MURGIO failed to file any Suspicious Activity
Report as required by federal law and regulation with respect to
numerous Bitcoin purchases conducted through Coin.mx by
individuals who claimed they were being forced to make such
purchases by cybercriminals who had gained remote control of
their computers and were demanding ?ransom? payments in Bitcoins
to relinquish control of those computers.

(Title 31, United States Code, Sections 5318(g) and 5322(a); and
Title 31, Code of Federal Regulations, Section 1022.320)

The bases for my knowledge and the foregoing charges are,
in part, as follows:

 

 

7. I am a Special Agent with the FBI. I am currently
assigned to the Computer Intrusion Squad of the New York
Division of the FBI, and have received training in computer
technology, computer fraud, intellectual property crimes, and
white collar crimes. I am familiar with the facts and
circumstances set forth below from my personal participation in
the investigation, including my examination of reports and
records, interviews I have conducted, and conversations with
other law enforcement officers and other individuals. Because
this affidavit is being submitted for the limited purpose of
establishing probable cause, it does not include all the facts
that I have learned during the course of my investigation.
Where the contents of documents and the actions, statements and
conversations of others are reported herein, they are reported
in substance and in part, unless noted otherwise.

OVERVIEW

8. Since at least late 2013, ANTHONY R. MURGIO, the
defendant, and his co?conspirators have knowingly operated
Coin.mx, a Bitcoin exchange service, in violation of federal
anti?money laundering laws and regulations, including
those requiring money services businesses like Coin.mx to meet
registration and reporting requirements set forth by the United
States Treasury Department.

9. As set forth below, through Coin.mx, MURGIO and his
co?conspirators enabled their customers to exchange cash for
Bitcoins, charging a fee for their service. In doing so, they

knowingly exchanged cash for people whom they believed may be
engaging in criminal activity, as set forth below. MURGIO and
his co?conspirators have also knowingly exchanged cash for
Bitcoins for victims of ?ransomware? attacks, that is,
cyberattacks in which criminals electronically block access to a
victim?s computer system until a sum of ?ransom? money,
typically in Bitcoins, is paid to them. In doing so, MURGIO and
his co?conspirators knowingly enabled the criminals responsible
for those attacks to receive the proceeds of their crimes, yet
in violation of federal anti?money laundering laws, MURGIO never
filed any suspicious activity reports regarding any of the
transactions. In total, between approximately October 2013 and
January 2015, Coin.mx exchanged at least $1.8 million for
Bitcoins on behalf of tens of thousands of customers.

10. ANTHONY R. MURGIO, the defendant, and his co?
conspirators engaged in substantial efforts to evade detection

 

 

of their scheme by operating through a phony front-company,
?Collectables Club,? and maintaining corresponding phony
?Collectables Club? websites. In doing so, they sought to trick
the major financial institutions through which they operated
into believing their unlawful Bitcoin exchange business was
simply a members-only association of individuals who discussed,
bought, and sold collectable items, such as sports memorabilia.
More recently, in an effort to evade potential scrutiny from
these institutions and others, MURGIO and his co?conspirators
acquired a federal credit union (the ?Credit Union"), installed
and other co?conspirators on the Credit Union?s Board of
Directors, and transferred Coin.mx?s banking operations to the
Credit Union, which they operated, at least until early 2015, as
a captive bank for their unlawful business.

BACKGROUND ON BITCOINS, THE REGULATION OF BITCOIN EXCHANGERS,
and FAILURE TO REGISTER WITH THE U.S. TREASURY
DEPARTMENT

 

 

11. Based on my experience and participation in this
investigation, I am aware of the following:

a. Bitcoins are an anonymous, decentralized form of
electronic currency that exist entirely on the Internet and not
in any physical form. Bitcoins are not illegal in and of
themselves and have known legitimate uses. However, given the
ease with which they can be used to move money anonymously,
Bitcoins are also known to be used to facilitate illicit
transactions and for money laundering purposes.

b. In order to acquire Bitcoins in the first
instance, a user typically must purchase them from a Bitcoin
?exchanger.? Typically, in exchange for a fee, Bitcoin
exchangers accept payments of currency in some conventional form
(cash, wire transfer, etc.) and exchange the money for a
corresponding amount of Bitcoins (based on a fluctuating
exchange rate); similarly, they typically exchange Bitcoins for
conventional currency. Once a user acquires Bitcoins from an
exchanger, the Bitcoins are kept in an electronic ?wallet?
associated with a Bitcoin ?address,? designated by a complex
string of letters and numbers. (The ?address? is analogous to
the account number for a bank account, while the ?wallet? is
analogous to a bank safe where the money in the account is
physically stored.) Once a Bitcoin user funds his wallet, the
user can use Bitcoins in the wallet to conduct financial
transactions by transferring Bitcoins over the Internet from his
Bitcoin address to the Bitcoin address of another user.

12. Based on my training and experience, I know the
following about regulation of Bitcoin exchangers:

a. Exchangers of virtual currency, including Bitcoin
exchangers, are considered money transmitters under federal law
and are subject to federal AML regulations if they do
substantial business in the United States. See 31 C.F.R. 
see also Department of the Treasury Financial
Crimes Enforcement Network, Guidance on the Application of
Regulations to Persons Administering, Exchanging, or
Using Virtual Currencies, March 18, 2013, 
available at 
2013?GOOl.html.

b. Specifically, federal regulations require a
virtual currency exchanger to register with the Department of
Treasury's Financial Crimes Enforcement Network as a
money services business and to develop and maintain an effective
AML program. See 31 C.F.R. 1022.210, 1022.380.

c. Maintaining an effective AML program requires
filing Suspicious Activity Reports with when appropriate,
including reporting substantial transactions or patterns of
transactions involving the use of the money services business to
facilitate criminal activity. See 31 C.F.R. 1022.320.

13. In or about July 2015, I searched a United States
Treasury Department database containing the names of money
services businesses lawfully registered to do business in the
United States. From that search, I know that Coin.mx,
?Collectables Club? and ?Currency Enthusiasts? are not
registered, and have never been registered, as a money services
business with the United States Treasury Department. In
addition, I have also searched that database for the surname
?Murgio? and learned that no one with that surname has
registered a money services business.

THE DESIGN OF COIN.MX AS AN ILLEGAL BITCOIN
EXCHANGE BUSINESS

 

14. I have reviewed emails and ?chats? (another form of
electronic communication) obtained pursuant to a search warrant
authorized in this investigation for an email account registered
in the name of ?Anthony Murgio? Email Account?). I
believe Email Account to be an email account of ANTHONY
MURGIO, the defendant, for many reasons, including because the

 

user of the account identifies himself as MURGIO, is referred to
by others as MURGIO (including with reference to 
education and employment history, with which I am familiar based
on this investigation), and provides others with a copy of his
driver?s license, which based on my review matches that
registered to MURGIO with the Florida Department of Motor
Vehicles. From this review, I learned, in substance and in
part, that:

a. Beginning in or about 2013, with various
individuals, MURGIO discussed his plan to develop an internet?
based Bitcoin exchange, sought funding for this new business,
and thereafter explained that he had obtained funding to develop
"it. MURGIO also recruited managers and employees for his new
Bitcoin exchange, including as set forth below. Among
other things, these communications reveal that MURGIO and his
financial backers recognized from the outset that MURGIO
intended to operate an illegal business. For example:

i. On or about September 30, 2013, MURGIO
described his new business to an individual from whom he sought
to obtain funding, explaining that it would be ?for buying and
selling? Bitcoins, ?like a transmitter service.?l Later that
day, the individual explained that he would not risk investing
in business because, while like BTC [Bitcoin]. . . I
don?t want to lose investment to the gov[ernment]. . . [It]
would sting to [sic] bad if something happened.?

1 ii. On or about October 14, 2013, MURGIO told
another individual that while he had obtained a funding
commitment from certain overseas investors, those investors
?don?t think the U.S. will like it, and they would not sleep if
something would happen to me.?2

 

MURGIO described his business on numerous other occasions as a

Bitcoin exchange business, including with reference to his
understanding that U.S. law required it to be licensed. For
example, in April 2014, in communicating with a particular
overseas business, MURGIO described Coin mx as ?a digital
money/bitcoin exchange? that was ?interested in offering margin
trading as well as having the ability to transfer money in and
out of our members banks accounts [sic]. In the US the licenses
would be a broker dealer and money transmitting."

2In January 2015, in an email in which he sought to convince a
particular payment processor to do business with Coin.mx, MURGIO

7

 

 

b. In or about late September 2013, MURGIO recruited
to manage the development of a computer programming
platform to support MURGIO's new Bitcoin?exchange business. For
example, on or about October 17, 2013, MURGIO told that
?Coin.mx is going to be the brand,? and that ?it?s mine now.
and yours.? MURGIO anticipated that Coin.mx would exchange
?every currency and every digital currency,? envisioning it as
?a worldwide payment system with immediate funds availability.?
For his part, expressed that he hoped to be ?the founding
father and the architect? of the Coin.mx electronic platform.

c. In exchange for payments, agreed to, and
did, become the ?architect? of the Coin.mx electronic platform.
For example, in certain of the communications:

. i. discussed his plan to rent, and his
actual rental of, computer servers in the United States and
abroad through which Coin.mx would and (based on my review of
other evidence obtained in this investigation) did operate;

ii. discussed his design of requisite
programming specifications for the Coin.mx electronic exchange
platform;

Beginning in or about November 2013, MURGIO
and discussed hiring computer programming contractors whom
recommended to assist them in developing the Coin.mx
platform, and whom would and did manage and communicate
with in order to develop that platform; and

 

suggested that he had ?authority? to do business without a
license because Coin.mx was a so?called ?private member
association,? and that he notified unspecified federal and state
authorities of the operation of his business ?by certified
mail.? Contrary to this claim that MURGIO believed he had
authority to run an unlicensed Bitcoin exchange, substantial
evidence shows that MURGIO knowingly operated an unlawful
business, including, as set forth herein, MURGIO and CC-l?s
various references to the unlawful nature of their business,
lies to Bank?l and Bank?2 about the nature of his
business, and MURGIO and CC?l?s creation of a phony front?
company ?Collectables Club? website to create the false
appearance that they were operating a collectables trading
association instead of an illegal Bitcoin exchange.

8

 

iv. After Coin.mx began operating in or about
November 2013, communicated regularly with MURGIO about
maintaining, and resolving issues associated with, the
programming operations of Coin.mx, and and MURGIO continued
to discuss potential changes to Coin.mx?s computer programming
infrastructure. For example, on or about February 1, 2014, 
emailed MURGIO, for discussion, a diagram showing the Coin.mx
technical infrastructure for a ?Regular User? and an ?Advanced
Trader.?

d. Like MURGIO, recognized that Coin.mx was
operating illegally. In addition, MURGIO and recognized
that their customers could be using Coin.mx's services to
facilitate or launder the proceeds of criminal activity, and
were excited by this prospect because, in their view, it
represented the possibility of additional business for Coin.mx.
For example:

i. On October 25, 2013, in discussing the
development of Coin.mx, complained that ?the challenge? is
that the is not allowing funding for its own citizens,?
which, based on my experience and participation in this
investigation, appears to be a reference to the fact that
Coin.mx was operating in violation of federal law.

ii. In or about late 2013, and MURGIO
discussed configuring the Coin.mx programming infrastructure to
keep a particular major Internet search engine from learning
that Coin.mx was operating through multiple connected sites.
Based on the evidence set forth below regarding the phony
?Collectables Club" websites, I believe this is a reference to
avoiding detection of the fact that the Collectables Club
websites were phony front?companies for Coin.mx.

On or about November 14, 2013, in a series
of chats, proposed that Coin.mx begin offering exchange
services through Russia?based payment processors because ?then a
lot of [R]ussians can buy!!. . . and wash money as well.? In
response, MURGIO stated, in sum, that Coin.mx was already doing
business with one or more such processors, in reply to which 
I wrote, ?wow. . . how cool is that." Based on my training,
experience, and participation in this investigation, I believe
that in suggesting that Coin.mx enter into certain business
arrangements that would encourage individuals in Russia to ?wash
money? through Coin.mx, was expressing his hope that such
arrangements would lead to Russia-based criminals using Coin.mx
to launder the proceeds of their crimes.

e. While supervised the computer programming
functions of Coin.mx, MURGIO maintained financial and
operational control of the company, including through his
beneficial ownership and control of the company?s financial
accounts (aspects of which MURGIO discussed and directed through
these emails and chats, and as further set forth below regarding
control of Coin.mx's bank accounts), and through his
oversight and control of the day?to?day management of the
business, as reflected in numerous communications through which
MURGIO recruited and hired employees, answered employees?
questions about operating the Bitcoin exchange, and answered
certain Bitcoin exchange customers? questions directly.

THE COIN.MX WEBSITE AND THE UNDERCOVER COIN.MX PURCHASES

 

15. From speaking with another federal agent involved in
this investigation (?Agent?1?), I learned that on multiple
occasions between approximately late 2014 and July 2015, Agent?
1 visited the website (the ?Coin.mx Website,? last
visited July 16, 2015). According to the Coin.mx Website,
Coin.mx was an ?international . . . exchange that allows you to
securely buy, use, and accept bitcoin and other digital
currencies,? and that accepts WIRE BANK as well
as CREDIT The website further claimed that Coin.mx
?is open to ?anyone?? and that, as of in or about October 2014,
Coin.mx had over ?70,000 members!?

16. From reviewing records of an internet domain registrar
(the ?Domain Registrar?) for the domain name ?coin.mx,? I
learned that on or about October 17, 2013, an individual
purporting to be named ?Anthony Murgio? with a certain address
in Florida (the ?Florida Address?) registered the internet
domain name ?coin.mx? using MURGIO's Email Account. The Florida
Address is the same as the address R. MURGIO, the
defendant, on file with the Florida Department of Motor
Vehicles. Accordingly, I believe that MURGIO registered the
domain name ?coin.mx? used by the Coin.mx Website.

17. From speaking with Agent~1, I have learned, in
substance and in part, that in or about November 2014, acting in
an undercover capacity in New York, New York, Agent-1 attempted
to exchange U.S. dollars for Bitcoins through the Coin.mx
Website, in the process of which he was asked through the
website to sign a ?Collectables Club Membership Agreement.?
According to the agreement, which I have reviewed, ?Collectables
Club? members ?seek to help each other achieve information and

10

education pertaining to collection and trading of memorabilia.?
After Agent?1 agreed electronically through the Coin.mx Website
to abide by that agreement, Coin.mx enabled Agent?1 to exchange
U.S. dollars for Bitcoins through the Coin.mx Website, which
Agent?1 subsequently did, as directed through the Coin.mx
Website, in a successful undercover transaction. Several days
later, through the Coin.mx Website, Agent?1 exchanged a portion
of those Bitcoins back to U.S. dollars, which he successfully
sent via wire transfer to, and then withdrew from, an undercover
bank account. For each of these exchange transactions, Coin.mx
charged Agent?1 a fee.

18. From speaking with Agent?1, I learned that in or about
January 2015, Agent?1 again successfully exchanged U.S. dollars
for Bitcoins through the Coin.mx Website. In addition, in or
about July 2015, through the Coin.mx website, Agent?1 accessed
Agent?1?s Coin.mx account, and observed that it appeared to be
functioning.

THE EFFORTS TO EVADE DETECTION OF HIS SCHEME THROUGH
THE PHONY 

 

 

19. From reviewing bank and other records obtained in this
investigation, I have learned that ANTHONY R. MURGIO, the
defendant, and attempted to evade detection of their
unlawful Bitcoin exchange business by operating through a phony
frontecompany, ?Collectables Club," for which MURGIO maintained
bank accounts and maintained phony websites. These records
further reveal that MURGIO has transferred hundreds of thousands
of dollars between bank accounts in the United States and bank
accounts overseas for the purpose of promoting his illegal
Bitcoin exchange business.

20. From reviewing records of the Florida Department of
State, Division of Corporations, I learned that ANTHONY R.
MURGIO, the defendant, registered ?Collectables Club? as a
?doing business as? name with the State of Florida on or about
July 15, 2013.

21. From reviewing bank records obtained in this
investigation, I learned the following:

a. In or about August and October 2013,

respectively, ANTHONY MURGIO, the defendant, opened bank
accounts, on which he was the sole signatory, at Bank-1 and

11

another major U.S. financial institution each in the
name ?Collectables Club? (collectively, the ?Bank?l and ?2
Collectables Club Accounts?), which in each case MURGIO claimed
was a members?only association of collectables trading
enthusiasts. For example, Bank~2 records reflect that in
opening the Bank-2 Collectables Club Account, MURGIO informed
Bank?2 that he was the founder and President of Collectables
Club, which existed ?to discuss various collectible items, items
such as cars, coins, stamps, sports memorabilia, music

 

instruments, etc.,? and to exchange advice ?on memorabilia
trading, buying, selling, and information on events and meetings
across the United States.? Further, in terms of the purpose for

which he would use the account, MURGIO told Bank?2 that ?a small
fee is charged for joining the club which is used to pay for
meetings or retreat[s] the club would have on an annual basis.

this account is use[dJ to collect the membership dues and pay
for gatherings.?

b. In truth and in fact, MURGIO, and their co?
conspirators used the Bank-l and -2 Collectables Club Accounts
solely to operate Coin.mx. Specifically, between approximately 1
September 2013 and mid?2014, through these accounts, MURGIO, 

1 and their co?conspirators exchanged well over $1 million for
Bitcoins on behalf of Coin.mx customers. In particular, among
other things, the Bank?l and -2 Collectables Club Account
records show thousands of incoming deposits in varying amounts
from individuals, some of whom, in wire transfer instructions,
noted that their payment was ?for Bitcoins.? Similarly, the
records show numerous payments to entities which I know, based
on my training and experience, sell Bitcoins in exchange for
U.S. dollars and other currency.

c. From the Bank?l and ?2 Collectables Club
Accounts, MURGIO transferred hundreds of thousands of dollars in
total to bank accounts in Cyprus, Hong Kong, and Eastern Europe
in the names of one or more entities including, according to the
records, as payment for ?programming? and other services.4

 

3 The Bank?2 records reflect that MURGIO opened and operated more
than one such account at Bank?2. For ease of reference, these
accounts are referred to collectively herein as the ?Bank?2
Collectables Club Account.?

4 Further, communications in the MURGIO Email Account reflect
that one or more of these accounts were owned by or for the
benefit of Coin.mx and/or others working to operate the Coin.mx
business. Specifically, in or about January 2014, an employee
of Coin.mx asked MURGIO, in response to a customer?s question,

12

MURGIO also received hundreds of thousands of dollars in total
into the Bank?l and *2 Collectables Club Accounts from bank
accounts in Cyprus and the British Virgin Islands in the names
of other entities. In addition to using money received into
these accounts to exchange U.S. dollars for Bitcoins, as set
forth above, MURGIO used the money to pay the operating expenses
of Coin.mx. For example, the records show numerous periodic
payments to individuals who I have learned, from my review of
the MURGIO Email Account, were employees of Coin.mx.

22. In addition to the fact that ANTHONY R. MURGIO, the
defendant, caused the Bank?l and ?2 Collectables Club Accounts
to engage in the overseas transfers set forth above, emails in
the MURGIO Email Account reflect that MURGIO directed certain of
those transfers specifically in an effort to evade detection of
his unlawful scheme. For example, by email dated November 28,
2013, a particular customer informed MURGIO that
he was wiring $100,000 to the Bank-l Collectables Club Account.
In response, MURGIO wrote, ?can you see if you can put a stop to
it? . . . You may wire 20k to [Bank?l], it will be credited
immediately. The rest must go to bulgaria please. We hope you
understand the concernsdamn screwed up
about this stuff, we wouldn?t have to deal with this.? Based on
my training and experience, and my participation in this
investigation, I believe that in providing these instructions,
MURGIO demonstrated concern that due to its substantial size, a
wire transfer of $100,000 could cause Bank?l to scrutinize the
transaction more closely, and thereby to discover that MURGIO
was using the Collectables Club Account to operate an unlicensed
Bitcoin exchange, and not a small collectables trading
association, as MURGIO had falsely represented to Bank?l.

23. The MURGIO Email Account contains additional evidence
that ANTHONY MURGIO, the defendant, sought to avoid detection of
his unlawful scheme. For example, based on MURGIO Email Account
communications that I have reviewed, in or about November 26,
2013, Customer?l indicated that, in order to purchase thousands
of dollars worth of Bitcoins, Customer-l intended to instruct
Customer?1?s bank to wire money to Bank?l for the benefit of
?Collectables Club which had the ?nickname? of

 

whether a wire transfer into the customer?s account from a
particular entity?s bank account was a wire ?from us?? MURGIO
responded, ?yes.? The Bank?l and ?2 Collectables Club Account
records reflect wires of tens of thousands of dollars from and
to bank accounts in the name of this particular entity located
in Cyprus and the British Virgin Islands.

13

?Coin.mx.? MURGIO replied, would not put coin.mx in there.
Put Collectpma.com? (emphasis in original). In doing so, I
believe, based on my training, experience, and participation in
this investigation, that MURGIO demonstrated his knowledge that
Bank-l did not know that the Bank?l Collectables Club Account
was being used to operate MURGIO's illegal Coin.mx business, as
well his intent to prevent Bank?l from learning that fact.

24. I have learned that in a further effort to trick
financial institutions and others into believing they were
operating a collectables trading association, instead of an
unlawful Bitcoin exchange business, ANTHONY R. MURGIO, the
defendant, and maintained phony ?Collectables Club?
websites. For example:

a. From reviewing the MURGIO Email Account, I
learned that in or about April 2014, MURGIO referred a
representative of Bank?l to the website 
?so you can have a look at how everything works and the items
that are available.? In or about June 2015, I visited that
website (the ?Collectables Club Website?) and observed that it
stated prominently that it was the website of ?Collectables
Club,? purportedly a members?only club that enables members to
?buy and sell" antiques, ?sports cards and memorabilia,? ?coins
and currency,? and other items through an online auction
process. The website further claimed that the ?Association?
made money by charging 15 percent of the value of the
transactions conducted through it, and contained purported links
enabling website visitors to sign up with, and become members
of, Collectables Club. However, at that time, after I completed
and electronically submitted the purported online Collectables
Club membership form, the website displayed an error message,
and I was unable to become a member. Further, at that time, I
viewed the images and product descriptions of certain items
purportedly offered for sale on the Collectables Club Website,
and observed that they were identical to items offered for sale
on certain other online auction websites for which bidding had
closed in or about late 2014. Based on my training, experience,
and participation in this investigation, I believe MURGIO and
his co?conspirators created this website, using photographs of
items offered for sale on actual auction websites in the past,
to create the false appearance to Bank?l that MURGIO was
operating a legitimate collectables trading association, instead
of an illegal Bitcoin exchange.

b. I have reviewed emails obtained pursuant to a
search warrant authorized in this investigation for an email

14

acCount registered in the name of Email Account").
I believe CC?l?s Email Account to be an email account used by
for many reasons, including because the user of the account
identifies himself by CC-l's name, and is referred to by others,
including MURGIO, as (including with reference to CC?l?s
employment history, with which I am familiar based on this
investigation). From these emails, I learned, among other
things, that was tasked by MURGIO with maintaining the
phOny Collectables Club Websites in furtherance of the unlawful
Coin.mx business, and that did, in fact, maintain those
websites, including by making changes to the websites at
direction.

 

FAILURE TO FILE A SAR REGARDING HIS PROCESSING OF
RANSOM PAYMENTS FOR CYBERCRIMINALS

 

25. I have reviewed a report that a particular business
(the ?Victim?) submitted to the FBI on or about August 15, 2014,
spoken with another agent who interviewed a representative of
the Victim (the ?Victim?s Representative?), and examined bank
records for the Bank?2 Collectables Club Account. Based on that
information, I learned that the Victim?s computer network became
infected with a particular type of ransomware,
when one of the Victim?s employees, using a company computer,
clicked on a particular advertisement on a particular website.
Once installed, the ransomware a large portion of the
documents on the Victim?s computer server. Along with the
ransomware, a text file (.txt) appeared on the Victim?s computer
which stated, in sum and substance, that the Victim?s files had
been rendered inaccessible) and which referred
the Victim to other computer sites for instructions. The
instructions on those sites directed the Victim to pay ransom,
in the form of one Bitcoin, in order to obtain 
software that would render the Victim?s computer network
accessible again, and provided a list of websites including
Coin.mx where the Victim could purchase the Bitcoin.
Following the instructions, the Victim's Representative
contacted Coin.mx and engaged in online chats with different
Coin mx employees. When the Victim?s Representative explained
to one Coin.mx employee that ?I?m just trying to pay the stupid
ransomware,? the employee replied, ?Ok please don?t
say anymore [sic] about that because then we cannot help you.?
Instead, the Coin.mx employee instructed the Victim?s
Representative to send a certain dollar amount and one cent
to the Bank?2 Collectables Club account, as
payment for one Bitcoin to be provided by Coin.mx.

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26. From reviewing communications from Coin.mx employees
to ANTHONY MURGIO, the defendant, which were recovered from
Email Account, I learned that MURGIO and Coin.mx
knowingly processed payments from ransomware victims from at
least in or about April 2014, through at least in or about June
2014. However, as set forth above, based on my review of a
particular Treasury Department database in or about July 2015, I
learned that at no time did ANTHONY MURGIO, the defendant, or
anyone else on behalf of Coin.mx, file a SAR regarding Coin.mx?s
participation in this unlawful activity, as they were otherwise
required to do by federal law.

ACQUISITION OF A FEDERAL CREDIT UNION IN FURTHERANCE OF
THE UNLAWFUL SCHEME

 

27. As further discussed below, based on certain emails in
MURGIO's Email Account, and information obtained from the
National Credit Union Administration, I learned that in or about
late 2014, ANTHONY R. MURGIO, the defendant, obtained beneficial
control of the Credit Union, a small credit union in New Jersey
with primarily low?income members, in order to process Automated
Clearing House transactions electronic credit and
debit transactions) for the unlawful Coin.mx scheme, among other
things. To do so, among other things, MURGIO made a payment to
a senior executive at the credit union (the ?Executive?), as
reflected in bank records which I have reviewed, and also
installed certain individuals close to him, including on
the Credit Union's board of directors. Below, except as
otherwise noted, are relevant portions of some of the relevant
communications from Email Account:

a. In or about mid?2014, MURGIO engaged in numerous
emails and chats with certain other individuals about acquiring
a small credit union through which he could operate his Bitcoin
exchange business. On or about May 9, 2014, MURGIO sent an
email to in which MURGIO described the Credit Union as ?a
small credit union 107 members no full time employees,? and
further noted that he met with Credit Union representatives and
?came to an agreement that we would be able to have control of
the credit union.? MURGIO then invited to become an
advisory member on the board, for which would be paid
$5,000. responded, am most definitely in!? and won't
disappoint 

b. Thereafter, as reflected in numerous emails and

chats in the MURGIO Email Account, MURGIO and began to
process ACH transactions for Coin.mx through a payment processor

16

 

(the ?Payment Processor?) which, with assistance,
opened an account at the Credit Union, and used that account to
process ACH transactions for Coin.mx and other purported
businesses.

c. In October 2014, in a conversation which MURGIO
recorded (a copy of which was maintained in an electronic file?
storage account connected to the MURGIO Email Account, and which
I reviewed pursuant to a judicially authorized search warrant),
the Executive privately admitted to MURGIO that notwithstanding

the Executive's titular role, ?I?m going to say it. . .it?s your
credit union. . . I believe how I?ve operated from day one is
it?s your credit union.? The Executive further worried about

the ?tap dancing" he and others were doing to avoid raising
concern among federal regulators about the payment processing
activity that MURGIO and others were conducting through the
Credit Union. As the Executive further admitted, ?We can?t
certify that all the people we let [pass] money through this
credit union. . . weren?t doing something illegally with the
money.? The Executive further acknowledged, in sum and
substance, that with respect to such payment processing
activity, the Credit Union had not performed appropriate Bank
Secrecy Act procedures procedures that are required under
federal law and designed in part to enable law enforcement to
detect money laundering and other unlawful activity by bank
customers], and as a result, the Credit Union's account may have
been used in furtherance of money laundering and other crimes.

28. From speaking with representatives of the National
Credit Union Association and reviewing NCUA records, I
learned that while the Credit Union normally handled the modest
banking needs of a small group of primarily low?income local
residents, and had little or no experience with the business of
ACH processing, by October 2014, the Payment Processor was
processing over $30 million a month in ACH transactions through
its account at the Credit Union. The NCUA learned of the
unusual size and scope of the activity and, in part because the
Credit Union did not have the AML policies or procedures in
place to handle such voluminous payment processing, forced the
Credit Union to stop allowing such processing; the NCUA
separately required the Credit Union to remove the new Board
members. Thereafter, based on emails in the MURGIO Email
Account which I have reviewed, MURGIO found other ways to

17

 

process payments for his unlawful Coin.mx business, including
through an overseas payment processor.

WHEREFORE, deponent prays that an arrest warrant be issued
for the above?named defendant, and that he be imprisoned or

bailed, as the case may be.
OM 

JOEL CAPUA 
Spec' Agent
Federal Bureau of Investigation

Sworn to before me this
17th day of July, 2015

 

HONORABLE RONALD L. ELLIS
UNITED STATES MAGISTRATE JUDGE
SOUTHERN DISTRICT OF NEW YORK

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