Inmate Accused of Moving $290K Forfeited Crypto From Prison

Rossen Iossifov, 53, a Bulgarian national serving a 111-month federal sentence for laundering nearly $5 million, has been charged with conspiring to transfer $290,000 in cryptocurrency that a court ordered forfeited. Prosecutors allege the transfers were carried out from inside federal prison in January 2024.

Iossifov made his first appearance this week in U.S. District Court for the Eastern District of Kentucky. The indictment includes counts of removing property to prevent seizure, aiding and abetting, and conspiracy to commit money laundering.

According to court filings, prosecutors say Iossifov conspired to withdraw and route the forfeited crypto through several exchanges and through mixing services that pool funds to obscure transaction histories. Investigators reported they traced withdrawals and transfers tied to accounts and services used to break the forensic link to the original holders.

Iossifov was convicted in 2021 for operating RG Coins, a cryptocurrency exchange based in Sofia, Bulgaria, and for participating in racketeering and money-laundering conspiracies tied to an online auction fraud ring. Prosecutors say the ring posted fake listings for cars and other goods, collected payments from at least 900 U.S. victims, and funneled proceeds to overseas launderers; Iossifov is accused of converting cryptocurrency into cash at the end of the chain.

At sentencing he received a 111-month prison term, was ordered to forfeit the cryptocurrency now at issue, and was ordered to pay more than $2.6 million in restitution. Prosecutors state the January 2024 transfers took place while he was already serving that sentence.

If convicted on the new charges, Iossifov faces up to 25 additional years in prison. The Department of Justice’s computer crime section noted it has secured convictions in more than 180 cyber and intellectual-property cases since 2020 and obtained court orders returning over $350 million to victims.

The U.S. Secret Service described the alleged transfers as a “direct challenge” to the courts and to victims. Assistant Attorney General A. Tysen Duva warned that defendants who “flout lawfully entered orders” will face obstruction charges.

No trial date has been set. Prosecutors and investigators note the case involves enforcement challenges in tracing and seizing digital assets that move across multiple platforms and jurisdictions.