Federal inmate allegedly moved $290K in forfeited crypto while serving fraud sentence
Rossen Iossifov, already doing 111 months for laundering $5 million, now faces 25 more years for allegedly conspiring to drain a Kraken account the court had seized.
Here’s something you probably don’t expect a federal prisoner to be doing from behind bars: orchestrating cryptocurrency transfers through multiple exchanges and mixing services to drain an account the government already seized.
Yet that’s exactly what prosecutors say Rossen G. Iossifov, a 53-year-old Bulgarian national, managed to pull off over the course of nearly an entire year while serving a 111-month sentence for fraud and money laundering.
The scheme inside the scheme
On July 9, US prosecutors charged Iossifov with destruction or removal of property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering. The charges stem from an alleged plot to withdraw and transfer roughly $290,000 in cryptocurrency from a Kraken account that had been court-ordered forfeited as part of his earlier conviction.
According to prosecutors, Iossifov conspired with associates between January and December 2024 to move the funds through various crypto exchanges and illicit mixing services. The proceeds were eventually converted into fiat currency and deposited into a foreign bank account.
If convicted on the new charges, Iossifov faces a maximum sentence of 25 years in prison. That would stack on top of the time he’s already serving.
A familiar name in crypto fraud circles
He previously operated RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria. In 2020, he was convicted of laundering nearly $5 million tied to an online auction fraud ring that targeted at least 900 Americans over three years. The scheme involved posting fake listings on popular auction sites, collecting payments, and then laundering the proceeds through his exchange.
That conviction resulted in the 111-month sentence he’s currently serving, along with a restitution order of $2,642,297.43. The Kraken account at the center of the new charges was restrained and ordered forfeited as part of that original case.
The investigation was led by the US Secret Service, with support from the Department of Justice’s Office of International Affairs.