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US prosecutors have indicted Bulgarian national Rossen Iossifov on new money laundering charges, alleging he tried to move $290,000 in already-forfeited cryptocurrency while serving an 111-month sentence for his original fraud conviction.
The alleged crypto laundering plot took place in January 2024 while Iossifov was serving a 111-month prison sentence in the United States for his role in a large-scale online fraud scheme.
Prosecutors say the crypto laundering plot involved using cryptocurrency exchanges and transaction mixers to conceal the movement of the funds and prevent the US government from recovering the assets. An indictment has been filed, but Iossifov is presumed innocent unless proven guilty in court.
The latest crypto laundering plot charges stem from Iossifov’s previous conviction in 2021 in the US District Court for the Eastern District of Kentucky, where a federal jury found him guilty of racketeering conspiracy and money laundering conspiracy.
Before his conviction, Iossifov owned RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria. According to US prosecutors, the exchange played a key role in processing illicit cryptocurrency transactions for the Alexandria Online Auction Fraud (AOAF) Network, a Romanian criminal organization responsible for defrauding hundreds of victims across the United States.
Court records showed the fraud ring deceived at least 900 Americans through fake online auction listings. Victims were persuaded to send payments for goods that were never delivered, while stolen proceeds were converted into cryptocurrency and routed through RG Coins.
During the criminal proceedings, prosecutors presented evidence showing that Iossifov laundered nearly $5 million in cryptocurrency over a period of less than three years. Authorities also alleged that he personally earned more than $184,000 from facilitating the illegal transactions.
Following his conviction, the court sentenced him to 111 months in prison, ordered the forfeiture of cryptocurrency connected to the case, and directed him to pay approximately $2.6 million in restitution to victims.
Federal prosecutors allege the latest crypto laundering plot began in January 2024, despite the assets already being under a court forfeiture order.
According to the Department of Justice, Iossifov conspired to transfer approximately $290,000 in forfeited cryptocurrency through multiple cryptocurrency exchanges before routing the assets into cryptocurrency mixers.
Mixers are privacy-enhancing services designed to combine digital asset transactions from multiple users, making it significantly more difficult for investigators to trace the origin and destination of funds on public blockchains.
Authorities allege the transfers were intended to obscure the ownership trail and prevent the United States from recovering assets that had already been legally forfeited following his earlier conviction.
The investigation was conducted by the US Secret Service, which also handled the original fraud case.
The alleged crypto laundering plot has now resulted in two additional federal charges against Iossifov: removal of property to prevent seizure and conspiracy to commit money laundering.
If convicted on both counts, he could face up to 25 additional years in federal prison.
Federal investigators described the alleged crypto laundering plot as a direct attempt to undermine judicial authority and deny compensation to victims of financial crime.
“Iossifov’s deliberate attempt to remove and launder lawfully seized funds is a direct challenge to our justice system and a blatant disregard to his victims’ rights.” — Robert Holman, Special Agent in Charge, US Secret Service Louisville Field Office
The indictment underscores the growing focus of US authorities on cryptocurrency-related financial crimes, particularly cases involving attempts to evade court-ordered forfeiture.
While blockchain technology provides transparency, investigators say criminals continue experimenting with privacy tools such as cryptocurrency mixers in efforts to disguise illicit transactions. Prosecutors argue that such techniques do not place digital assets beyond the reach of law enforcement when supported by coordinated investigations and forensic blockchain analysis.
The crypto laundering plot also illustrates that federal authorities continue monitoring financial activity linked to convicted offenders even after sentencing. Officials maintain that court-ordered asset forfeitures remain enforceable and that attempts to circumvent them can result in new criminal prosecutions.
Although prosecutors have outlined their allegations in the indictment, the case remains at an early stage. Under the US legal system, the indictment serves only as an accusation, and Iossifov retains the presumption of innocence unless the government proves its case beyond a reasonable doubt in court.
Primary source: US Department of Justice press release.
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