## Facts

- Federal prosecutors charged Anthony R. Murgio, Yuri Lebedev, Trevon Gross, and Michael Murgio based on an alleged scheme involving Coin.mx, an online Bitcoin exchange.
- The indictment alleged that, from about October 2013 to July 2015, Coin.mx exchanged millions of dollars for Bitcoin for customers across the United States.
- The government alleged Coin.mx used front entities, including “Collectables Club,” to mislead financial institutions into believing Coin.mx was a members-only collectables association and to obtain bank accounts used to run the exchange.
- The government alleged Trevon Gross, an official at HOPE Federal Credit Union, accepted bribes and related payments routed through Gross-controlled organizations in exchange for assisting Coin.mx’s banking operations at the credit union.
- Defendants filed pretrial motions attacking the third superseding indictment, including motions to dismiss the unlicensed money-transmitting business counts under 18 U.S.C. § 1960 and motions concerning venue, duplicity/multiplicity, severance, and requests for a bill of particulars.

## Issues

1. Whether Bitcoin qualify as “funds” under 18 U.S.C. § 1960 such that operating a Bitcoin exchange can constitute operating an unlicensed money-transmitting business.
2. Whether the indictment sufficiently alleged the elements of the charged offenses to survive dismissal under Rule 12 and Rule 7(c).
3. Whether defendants were entitled to severance, dismissal for duplicity or multiplicity, or expanded particulars and discovery beyond what was pleaded.

## Decision

- The court denied motions to dismiss the § 1960 counts, holding that Bitcoin qualify as “funds” within the meaning of § 1960.
- The court largely denied other motions to dismiss, finding the indictment adequately pleaded the charged schemes and elements.
- The court granted in part limited requests for a bill of particulars where additional specificity was needed to prepare for trial and avoid surprise, but denied requests seeking evidentiary detail or the government’s proof.
- The court denied severance, finding joinder proper and potential prejudice manageable through trial instructions.
- The court rejected duplicity and multiplicity challenges, concluding the counts were structured as single offenses without improper multiple punishment for the same conduct.
- The court largely denied discovery-related motions while reiterating the government’s disclosure duties for exculpatory and impeachment material.

## Legal Principles

- Under 18 U.S.C. § 1960, “funds” is interpreted broadly to cover assets that function as a medium of payment or transferable store of value; it is not limited to government-issued currency.
- Statutory purpose and context may confirm a technology-neutral reading where Congress sought to address methods of transferring value outside regulated financial channels.
- Agency classifications under other statutory or regulatory schemes do not control the meaning of “funds” in § 1960; regulatory treatment of virtual-currency exchangers as money services businesses can be consistent with § 1960’s coverage.
- The rule of lenity applies only when, after using traditional interpretive tools, a criminal statute remains grievously ambiguous; it does not apply where text, context, and purpose resolve the question.
- An indictment is sufficient if it states the elements of the offense, fairly informs the defendant of the charges, and permits a double-jeopardy bar; it need not provide evidentiary detail.
- A bill of particulars may be ordered to enable trial preparation and prevent surprise, but it cannot be used to force disclosure of the government’s evidence or legal theories.
- Severance is not required merely because defendants prefer separate trials; prejudice must outweigh the benefits of joint trial where charges arise from a common series of acts or transactions.

## Conclusion

The court held that Bitcoin are “funds” for purposes of 18 U.S.C. § 1960 and that the indictment adequately alleged an unlicensed money-transmitting business and related schemes; it denied most pretrial challenges while ordering limited additional particulars to aid trial preparation.


United States v. Murgio, 209 F. Supp. 3d 698 (S.D.N.Y. 2016)