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Man Charged in Bitcoin Scheme Appears in New York Court
Anthony Murgio leaving Federal court in Manhattan today.Credit Michael Appleton for The New York Times

Anthony Murgio, a Florida man who was charged last month by federal prosecutors in Manhattan with running an illegal bitcoin money exchange firm and is thought to have information about last summer’s hacking attack against JPMorgan Chase, seemed to be taking the unfolding criminal case against him in stride during a court appearance on Monday morning.

Mr. Murgio, 31, made small talk with the two federal agents in the hallway of the federal court in Lower Manhattan, while waiting to appear on those charges before the United States magistrate judge, James C. Francis IV. At one point, he even rushed to see if a woman who had fallen in the hallway was hurt and needed help getting up.

But when he appeared in court, Mr. Murgio said nothing, letting his lawyer, Gregory W. Kehoe of the big law firm Greenberg Traurig, do the talking. The hearing was brief and the judge allowed Mr. Murgio, who has run a number of less-than-successful businesses since graduating from Florida State University, to remain free on $100,000 bond.

Mr. Murgio posted the bond a week ago after his arrest on July 21 in Tampa after spending a few nights in the Pinellas County jail while he and his family secured the money.

Both Mr. Murgio and his lawyer declined to comment after the proceeding in federal court.

Federal authorities contend that Mr. Murgio’s company, Coin.mx, allowed online criminals to illegally exchange the digital currency bitcoin for cash as part of a money-laundering scheme. Mr. Murgio could be sentenced to up to 20 years in prison if convicted on the money-laundering charges.

The judge, at the request of Eun Young Choi, a federal prosecutor assigned to the case, ordered Mr. Murgio not to talk to anyone associated with his company and not to work for any other money-transfer firm.

Mr. Murgio’s partner in running the small bitcoin firm, Yuri Lebedev, who also lives in Florida and was similarly charged by prosecutors, is out on $25,000 bond.

Neither man has been charged with any wrongdoing in connection with the hacking at JPMorgan that compromised the personal contact information of 83 million customer accounts at the bank.

But federal authorities are particularly interested in what Mr. Murgio may know about the attack, as his name surfaced early in the inquiry by the Federal Bureau of Investigation, people briefed on the investigation have said. Joshua Aaron, a friend of Mr. Murgio and one of his college classmates from Florida State, also came to the attention of the F.B.I. early on.

Mr. Aaron was one of three men charged by prosecutors in Manhattan with operating a series of schemes to pump up the prices of otherwise worthless stocks who also is said to have some link to the JPMorgan attack. Two of those men were arrested in Israel on the day that Mr. Murgio and Mr. Lebedev were arrested in Florida.

Mr. Aaron, who moved to Israel several years ago, could not be arrested at his home in Tel Aviv because he was out of the country. Mr. Aaron, 31, is thought to be staying in Russia with his wife, Alona Chaim Aaron, an Israeli citizen, based on social media posts from several weeks ago. The authorities have not formally declared him a fugitive, but people briefed on the matter said it was being considered.

On Monday, the two men arrested in Israel, Gery Shalon and Ziv Orenstein, appeared in a Jerusalem court and were ordered by a judge to remain in custody until at least Sept. 1. Both men have been detained by Israeli authorities at the request of federal prosecutors since their arrest on July 21.

Lawyers for Mr. Shalon and Mr. Orenstein had asked for the men to be released from prison and confined to home arrest. Israeli prosecutors had wanted both men held for an additional 40 days.

Federal prosecutors are beginning to seek to extradite Mr. Shalon and Mr. Orenstein to New York. But the process could take months.

As with Mr. Murgio and Mr. Lebedev, neither Mr. Aaron nor his associates in Israel are facing any charges arising out of apparent theft of information from JPMorgan.

The authorities have declined to discuss what led them to conclude Mr. Murgio and Mr. Aaron might have some information about the JPMorgan attack. People briefed on the matter said that Mr. Aaron might have used information gathered in the breach, like purloined email addresses and customer home addresses, to put together a list of potential victims to pitch the stocks for their various schemes.

People familiar with stock manipulation schemes said a high-quality list of email addresses — like the customer contact information taken from JPMorgan — could sell for several million dollars on the black market.

Mr. Murgio and Mr. Aaron were known to have visited Russia in the last few years. The authorities suspect the actual hackers may be in Russia or another European country.

Federal authorities are under some pressure to develop information that could lead to the filing of charges related to the breach, especially against Mr. Aaron, Mr. Shalon and Mr. Orenstein, now that charges have been filed against them with regards to the stock manipulation. Legal experts said once a defendant was extradited from a foreign country it was difficult to file new charges against that person, especially if the charges arose from a different offense.

The time constraint facing authorities then would seem to give leverage to anyone charged in either case but willing to take a plea and provide evidence linking the crimes to the attack.

Read more http://rss.nytimes.com/c/34625/f/640387/s/48df358f/sc/7/l/0L0Snytimes0N0C20A150C0A80C110Cbusiness0Cman0Echarged0Ein0Ebitcoin0Escheme0Eappears0Ein0Enew0Eyork0Ecourt0Bhtml0Dpartner0Frss0Gemc0Frss/story01.htm


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