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Pastor, Former CU CEO Sentenced to Five Years.

Byline: Peter Strozniak

In 2014 when Pastor Trevon Gross and former chair and CEO of a credit union took a $150,000 bribe from criminals to use the cooperative as a front to operate an illegal Bitcoin operation, the New Jersey clergyman appeared on a national television Christian program and preached about the sin of pride.

But Pastor Gross won't be preaching on a national television stage any time soon after he was sentenced Monday to five years in federal prison by U.S. District Court Judge Alison J. Nathan in New York City. On Oct. 20, Judge Nathan also sentenced a co-conspirator, Yuri Lebedev, to 16 months in prison. While he was a board member of the $626,529 Helping Other People Excel Federal Credit Union, Lebedev bribed Gross who was the board chair and CEO of the Lakewood, N.J.-based cooperative.

Gross remains listed as the founding and lead pastor of the Hope Cathedral in Jackson, according to the church's website. The church did not respond to a CU Times request for comment Wednesday.

Judge Nathan also ordered Gross to pay $194,293 in restitution to the NCUA.

In a victim statement filed with the court, the NCUA noted that had the illegal operations not taken place, the credit union would not have expended its equity to support the unlawful Bitcoin scheme and could have survived.

"Gross and Lebedev's illegal actions brought about the demise of a once healthy credit union that had been in existence for 36 years," the NCUA board wrote in its letter. "The demise of this credit union affected approximately 110 credit union members causing innumerable hardships."

In March, Gross and Lebedev were convicted after a four-week jury trial of conspiring to make corrupt payments to an officer of a financial institution, to receive corrupt payments by an officer of a financial institution, to obstruct an NCUA examination of a financial institution, and to make false statements to the NCUA. Gross was also convicted of the receipt of corrupt payments by an officer of a financial institution. Lebedev was also convicted of making corrupt payments to an officer of a financial institution, wire fraud, bank fraud, and conspiring to commit wire fraud and bank fraud.

In addition, during the sentencing hearing, Judge Nathan also ruled that Gross committed perjury when he testified under oath at trial.

Between 2013 and July 2015, Lebedev, who was a computer programmer, helped operate Coin.mx, an unlawful internet-based Bitcoin exchange, along with Anthony Murgio, the founder of Coin.mx. In June, Murgio was sentenced to more than five years in prison.

To conceal the Bitcoin exchange, they initially operated a fake front company to open bank accounts and tricked financial institutions into believing the exchange was a members-only association of individuals who bought and sold collectible items and memorabilia. They also deceived financial institutions by misidentifying and miscoding Coin.mx customers' credit and debit card transactions. Through the illegal Coin.mx scheme, Lebedev and Murgio illegally processed more than $10 million in Bitcoin-related transactions, according to prosecutors.

In 2014, in an effort to evade scrutiny from the banks, Lebedev and Murgio gained control of HOPE FCU after making more than $150,000 in illegal bribes to Gross, He also directed Lebedev and Murgio to deposit the bribe money into the church's bank accounts.

With Gross' assistance, Murgio installed Lebedev and other co-conspirators on HOPE FCU's board of directors and transferred Coin.mx's banking operations to the credit union. Gross also ceded operational control of the credit union to the board members installed by Murgio, including Lebedev, according to court documents.

Gross, Lebedev, and others worked to run tens of millions of dollars of ACH transactions through the credit union without adequate controls, thus putting its financial condition at risk. HOPE FCU was operated as a captive bank through the end of 2014.

To cover up their control of the credit union, Gross, Lebedev and Murgio obstructed an NCUA examination, lied to examiners and manipulated the books to conceal the fact that the tiny cooperative founded to serve low-income members was processing tens of millions of dollars of transactions without adequate controls.

By October 2015, the NCUA placed HOPE FCU into conservatorship and liquidated it.
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Publication:Credit Union Times
Date:Nov 2, 2017
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