A federal jury in Washington, D.C., convicted a dual Russian-Swedish
national today for his operation of the longest-running bitcoin money
laundering service on the darknet.
“Roman Sterlingov thought he could use the shadows of the internet to
launder hundreds of millions of dollars in bitcoin without getting
caught. But he was wrong,” said Deputy Attorney General Lisa Monaco.
“Our team of agents, analysts, and prosecutors were relentless in their
pursuit of justice, painstakingly tracing bitcoin through the
blockchain to hold Sterlingov and his Bitcoin Fog enterprise to
account. Today, a jury returned guilty verdicts on all counts — showing
that no matter where you operate, if your cryptocurrency service
reaches the United States, you must abide by U.S. law.”
According to court documents and evidence presented at trial, Roman
Sterlingov, 35, was involved in operating Bitcoin Fog from 2011 through
2021. Bitcoin Fog was the longest-running cryptocurrency “mixer,”
gaining notoriety as a go-to money laundering service for criminals
seeking to hide their illicit proceeds from law enforcement. Over the
course of its decade-long operation, Bitcoin Fog moved over 1.2 million
bitcoin, which was valued at approximately $400 million at the time of
the transactions. The bulk of this cryptocurrency came from darknet
marketplaces and was tied to illegal narcotics, computer crimes,
identity theft, and child sexual abuse material.
“Roman Sterlingov operated Bitcoin Fog, a cryptocurrency ‘mixing’
service that allowed criminals to launder hundreds of millions of
dollars in illicit funds from darknet marketplaces. The defendant and
his customers believed they could use Bitcoin Fog to conceal these
illicit transactions,” said Acting Assistant Attorney General Nicole M.
Argentieri of the Justice Department’s Criminal Division. “As the
jury’s guilty verdict shows, that belief was mistaken. The Criminal
Division is committed to unmasking and prosecuting those who use
technology to hide their crimes, no matter how sophisticated the scheme
may be.”
“Darknet criminals should know by now that operations like Bitcoin Fog
cannot provide the anonymity for cryptocurrency transactions that they
claim they can,” said U.S. Attorney Matthew M. Graves for the District
of Columbia. “This conviction demonstrates that the United States can
and will combat the use of technology to carry out crimes in
cyberspace.”
“Evidence presented at trial clearly showed that the defendant
laundered hundreds of millions of illicit funds from the dark web
through Bitcoin Fog in an attempt to conceal the origin of those
funds,” said Chief Jim Lee of IRS Criminal Investigation (IRS-CI). “IRS
Criminal Investigation special agents are specially equipped to follow
the complex financial trail left by criminals, and we are dedicated to
holding those accountable for crimes committed.”
The jury convicted Sterlingov of money laundering conspiracy and sting
money laundering, which each carry a maximum penalty of 20 years in
prison, and of operating an unlicensed money transmitting business and
money transmission without a license in the District of Columbia, which
each carry a maximum penalty of five years in prison. A federal
district court judge will determine any sentence after considering the
U.S. Sentencing Guidelines and other statutory factors.
The IRS-CI District of Columbia Cyber Crime Unit and FBI Washington
Field Office investigated the case. The Justice Department’s Office of
International Affairs and FBI’s Virtual Asset Unit provided invaluable
assistance. Additional assistance was provided by Europol; the Swedish
Economic Crime Authority, Swedish Prosecution Authority, and Swedish
Police Authority; and the General Inspectorate of Romanian Police,
Directorate for Combatting Organized Crime, and Directorate for
Investigating Organized Crime and Terrorism.
Trial Attorneys Jeff Pearlman and C. Alden Pelker of the Criminal
Division’s Computer Crime and Intellectual Property Section (CCIPS) and
Assistant U.S. Attorney Christopher B. Brown for the District of
Columbia are prosecuting the case. Pelker and Brown are members of
CCIPS’ National Cryptocurrency Enforcement Team (NCET). CCIPS Paralegal
Specialist Divya Ramjee and Paralegal Specialist Angela De Falco for
the District of Columbia provided valuable assistance.
