New York; International Fugitive And Disbarred Attorney Charged In Over $5 Million Cryptocurrency Fraud | USAO-SDNY
(STL.News) – Audrey Strauss, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a Complaint in Manhattan federal court charging RANDY CRAIG LEVINE, a/k/a “Viktor Lapin,” a/k/a “Andre Santiago Santos Galindo,” a/k/a “Alexander Martinez Lavrov,” a/k/a “Alexander Kozlov,” a/k/a “Hristo Danielov Marinov,” and PHILIP REICHENTHAL with commodities fraud, wire fraud, and money laundering offenses. As alleged, LEVINE induced others to send millions of dollars to REICHENTHAL, who was at the time a licensed attorney, to fund the purchase of Bitcoin after falsely representing that he intended to sell large quantities of Bitcoin to buyers. REICHENTHAL, who was purportedly acting as an escrow agent for the transactions, then sent a substantial portion of the money to LEVINE, before any Bitcoin was provided by LEVINE to investors. Neither LEVINE nor REICHENTHAL ever provided any Bitcoin or refunded the investors’ money.
LEVINE, a U.S. citizen, fled the United States in or about 2005 after learning that he was under investigation for passport fraud and that his residence had been searched. On or about May 19, 2005, a federal grand jury sitting in the Southern District of Florida returned an indictment charging LEVINE with passport fraud and perjury. In 2018, LEVINE was arrested in Guatemala with a Russian passport containing the alias “Viktor Lapin.” In June 2020, he was arrested in Austria with a Bulgarian passport containing the alias “Alexander Koslov.” Extradition proceedings are pending.
Acting Manhattan U.S. Attorney Audrey Strauss said: “Randy Levine and Philip Reichenthal allegedly engaged in a scheme to take over $5 million in investor funds under the pretense of offering cryptocurrency for sale. In reality, when investors’ funds were transferred to Reichenthal, a licensed attorney at the time, for ‘escrow’ at Levine’s behest, the two allegedly pocketed the money. They never completed the Bitcoin transactions promised to their victim investors. Today’s arrest of Philip Reichenthal ensures that he and his co-defendant, Randy Levine, will face justice for this alleged scheme.”
FBI Assistant Director-in-Charge Sweeney said: “As alleged, Levine and Reichenthal operated two fraudulent schemes involving Bitcoin transactions. In both cases, investors wired money to the defendants to fund the purchase of Bitcoin. In neither case did these purchases actually take place. The money was funneled, as alleged, to overseas bank accounts controlled by Levine. While the charges brought today against Levine and Reichenthal are fairly detailed and laden with allegations of complex criminal activity, the truth is much more simple: they were con artists who finally got caught in the act.”
As alleged in the Complaint unsealed today in Manhattan federal court:
The charges against LEVINE and REICHENTHAL involve two fraudulent schemes. In the first fraudulent scheme, in approximately June and July 2018, LEVINE induced another individual, the principal of a purported cryptocurrency escrow firm (“Individual-1”), to wire to REICHENTHAL over $3 million of funds from an over-the-counter cryptocurrency broker (“Company-1”) to fund the purchase of Bitcoin after falsely telling Individual-1 that LEVINE would sell thousands of Bitcoin, when in truth and in fact, LEVINE never intended to sell Bitcoin. After receiving the $3 million, REICHENTHAL, in turn, wired over $2 million to bank accounts in Guatemala held in the name of one of LEVINE’s aliases. LEVINE then lied to Individual-1 for days about why the deal had not worked out, the status of the purported Bitcoin, and the location of Company-1’s money, which was never returned.
In the second fraudulent scheme, from approximately February 2019 to May 2019, LEVINE induced a Florida resident involved in brokering Bitcoin transactions (“Individual-2”) to cause investors to send to REICHENTHAL over $2 million of the investors’ money to fund the purchase of Bitcoin. Again, LEVINE told Individual-2 that LEVINE would sell Bitcoin, when in truth and in fact, LEVINE never had any intention of selling Bitcoin to the investors. After receiving the funds from the investors, REICHENTHAL, in turn, sent over $1.9 million to bank accounts in Mexico controlled by LEVINE; the money was then wired to a bank account in Russia held in the name of one of LEVINE’s aliases. LEVINE then lied to Individual-2 and an investor (“Investor-1”) about the status of the investors’ funds, which were never returned. After Individual-2 sought the return of the funds, LEVINE sent one electronic message threatening to “bring [Individual-2] into all My Legal Problems here in Guatemala including Money Laundering as I have open investigation a d [sic] I will alert the American Authorities you were involved in my operations before just to stick it up your a**.”
In connection with the above transactions, LEVINE used, among other things, various false aliases to communicate with the individuals sending funds to REICHENTHAL and foreign bank accounts held in his false names. REICHENTHAL used bank accounts held in the name of his law firm and an attorney trust account to receive the funds and the pass them to LEVINE, before he or investors received the Bitcoin, contrary to REICHENTHAL’s and LEVINE’s promises.
On or about October 31, 2019, the Supreme Court of the State of Florida granted REICHENTHAL’s own petition for voluntary disciplinary revocation of his bar license after approximately 12 attorney disciplinary charges were filed against him related to his “receipt of approximately $2,125,000.00 in escrow funds and subsequent failure to disburse in accordance with the escrow agreement,” as stated in the court documents.
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LEVINE, 53, formerly of Coral Springs, Florida, and REICHENTHAL, 76, of Homestead, Florida, are each charged with one count of conspiring to commit commodities fraud, which carries a maximum term of 5 years in prison, one count of conspiring to commit wire fraud, which carries a maximum sentence of 20 years in prison, two counts of commodities fraud, each of which carries a maximum sentence of 10 years in prison, two counts of wire fraud, each of which carries a maximum sentence of 20 years in prison, and one count of money laundering, which carries a maximum sentence of 10 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
Ms. Strauss praised the investigative work of the Federal Bureau of Investigation and also thanked the Commodity Futures Trading Commission and the Florida Office of Financial Regulation’s Bureau of Financial Investigations for their assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Jordan Estes and Drew Skinner are in charge of the prosecution.