The U.S. Department of Justice said on July 9 that federal inmate Rossen G. Iossifov, a Bulgarian national already serving time for an earlier fraud case, now faces new charges tied to the alleged removal of cryptocurrency that had been ordered forfeited to the United States. Prosecutors say the amount involved was about $290,000.
Prosecutors say the crypto was moved after a court forfeiture order
Iossifov, 53, made an initial appearance in federal court in the Eastern District of Kentucky. The new case includes charges of destruction or removal of property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering. According to court documents, prosecutors allege that in January 2024 he joined a scheme to remove cryptocurrency that a court had already ordered forfeited following his 2021 conviction in the same district.
The government alleges the funds were withdrawn and transferred without authorization, then routed through multiple exchanges and illicit mixing services to keep U.S. authorities from taking possession of them. The DOJ said the conduct resembles other crypto laundering matters it has pursued involving exchanges and mixers.
Earlier case involved nearly $5 million in laundered cryptocurrency
At the time of the alleged new conduct, Iossifov was serving a 111-month sentence tied to his 2021 conviction in a fraud scheme that targeted American victims through online auctions. Evidence introduced in that earlier trial showed that he had laundered nearly $5 million in cryptocurrency in less than three years.
The court in that case also ordered him to pay $2,642,297.43 in restitution and to forfeit the cryptocurrency that is now central to the latest indictment. The new prosecution focuses on whether those assets were intentionally moved and concealed after the forfeiture order was in place.
Secret Service led the investigation, penalty could reach 25 years
First Assistant U.S. Attorney Jason Parman for the Eastern District of Kentucky said the alleged conduct challenged the authority of the federal courts. Robert Holman, Special Agent in Charge of the U.S. Secret Service Louisville Field Office, said the alleged laundering of seized funds showed disregard for victims’ rights.
The investigation was conducted by the U.S. Secret Service with support from the Justice Department’s Office of International Affairs. The prosecution is being handled by Senior Counsel Vasantha Rao of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Kathryn M. Dieruf for the Eastern District of Kentucky. The DOJ said an indictment is only an allegation, and every defendant is presumed innocent unless and until proven guilty in court.
If convicted, Iossifov faces a maximum sentence of 25 years in prison. The charges were announced during a period of continued U.S. enforcement activity involving digital assets, including violent robbery cases targeting crypto holders and extradition efforts in hacking cases tied to large ransom payments.