Financial Crime Weekly: Darknet Money Laundering, Crypto Scams, Invesco Pays $17.5M SEC Penalty

Man Sentenced To 12 ½ Years For Bitcoin Money Laundering On The Darknet 

Roman Sterlingov was sentenced last Friday to 12 years and six months in prison for his operation of the longest-running Bitcoin BTC/USD money laundering service on the darknet. 

Sterlingov was also ordered to pay a forfeiture money judgment in the amount of $395,563,025.39 and forfeiture of seized cryptocurrencies and monetary assets valued at approximately $1.76 million. Additionally, he was ordered to forfeit his interest in the Bitcoin Fog wallet, totaling approximately 1,345 bitcoin and currently valued at more than $103 million.

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According to court documents and evidence presented at trial, from 2011 through 2021, Sterlingov was involved in operating Bitcoin Fog, the darknet's longest-running cryptocurrency "mixer." Bitcoin Fog became known as a money laundering service for criminals and processed transactions involving over 1.2 million bitcoin, valued at approximately $400 million at the time the transactions occurred. 

"Roman Sterlingov ran the longest-running bitcoin money laundering service on the darknet, and today he paid the price," said Deputy Attorney General Lisa Monaco. 

"In the deepest corners of the internet, he provided a home for criminals of all stripes, from drug traffickers to identity thieves, to store hundreds of millions of dollars in illicit proceeds," Monaco said. 

Man Pleads Guilty To Conspiracy To Launder Cryptocurrency Scam Proceeds

Daren Li, a dual citizen of China and St. Kitts and Nevis, pleaded guilty on Tuesday to one count of conspiracy to commit money laundering for his role in a scheme to launder millions of dollars in proceeds of cryptocurrency investment scams.

According to court documents, Li admitted that he conspired with others to launder funds obtained from victims through cryptocurrency scams and related fraud. Li instructed co-conspirators to open U.S. bank accounts on behalf of shell companies and would then monitor the receipt interstate and international wire transfers of victim funds. 

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Li and his co-conspirators received victim funds in financial accounts they controlled, and then monitor the conversion of victim funds to virtual currency, specifically Tether USDT/USD, and the eventual distribution of the virtual currency to cryptocurrency wallets controlled by Li and his co-conspirators.

"Financial criminals and the money launderers who enable them wreak untold harm, ruining lives in the process," said United States Attorney Martin Estrada for the Central District of California. 

"Investors should be diligent and on guard against anyone offering quick riches via new, exotic investments. A healthy dose of skepticism could prevent financial ruin down the road," Estrada said. 

SEC Charges Invesco Advisers For Misleading Statements About ESG Investments

Last Friday, the Securities and Exchange Commission (SEC) charged Invesco Advisers, Inc. for making misleading statements about the percentage of company-wide assets under management that integrated environmental, social, and governance (ESG) factors in investment decisions. 

According to the SEC's order, from 2020 to 2022, Invesco told clients and stated in marketing materials that between 70% and 94% of its parent company's assets under management were "ESG integrated." However, these percentages included a substantial amount of assets that were held in passive ETFs that did not consider ESG factors in investment decisions. The SEC's order also found that Invesco lacked any written policy defining ESG integration.

"As stated in the order, Invesco saw commercial value in claiming that a high percentage of company-wide assets were ESG integrated. But saying it doesn't make it so," said Sanjay Wadhwa, Acting Director of the SEC's Division of Enforcement. 

"Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords," Wadhwa added. 

Invesco agreed to cease and desist from violations of the charged provisions, be censured and pay a $17.5 million civil penalty to settle the SEC's charges. 

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