Rare White Collar Psych Eval Sought In Bitcoin Scheme Case

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Rare White Collar Psych Eval Sought In Bitcoin Scheme Case

By Chris Villani
Law360, Boston (June 5, 2019, 5:01 PM EDT) —

Lawyers for a man charged with participating in an unidentified website’s multimillion-dollar scheme to swap bitcoins for personal payment card information took the rare step Wednesday of asking for a psychiatric evaluation of their client, saying he is showing signs of instability.

Vitalii [A], a New York man who was charged by federal prosecutors in Massachusetts, is having trouble communicating with his lawyers and is making concerning statements, including insinuating that he is secretly working for the CIA, according to his attorney Edward V. Sapone of Sapone & Petrillo LLP. A’s mother has shared similar concerns, Sapone said, and the government has agreed to the evaluation so that it can be determined if a full-blown competency hearing is needed.

“When people are charged with crimes, we don’t leave the concern for psychological wellness at the courthouse steps,” Sapone told Law360 on Wednesday. “There is a strong belief among his legal team and family that Mr. [A] should be evaluated. We are equally confident that the court will properly decide our motion.”

Sapone agreed that a motion of this kind is uncommon in a white collar case, which typically involves a defendant with means and better access to treatment, relative to other types of crimes.

“While it is unusual in these kinds of cases, our only goal is to get him a proper evaluation and any necessary treatment,” Sapone said.

Authorities charged [A] in a criminal complaint with one count of conspiracy to commit money laundering in connection with an investigation by the U.S. Secret Service into the online sale of stolen payment card data and personally identifiable information.

The criminal proceeds of those sales have been linked to accounts and bitcoin wallets in [A]’s name, according to the complaint. “[A] had no identified source of income that would account for these large dollar bitcoin transfers to and from wallets that he controlled, or for substantial cash deposits into traditional bank accounts that he held during this period,” the complaint said.

In his motion, Sapone said his client is showing signs of “concerning personality changes, including excessive paranoia, secrecy and abandonment of all communications with his family.”

The motion is necessary, Sapone said, to ensure counsel can provide [A] with effective representation.

Investigations by undercover agents into two “bitcoin wallets” that were used in transactions totaling $94 million led them to [A], the complaint said.

More than $140,000 from both wallets was ultimately funneled to wallets controlled by [A], according to senior special agent Peter Gannon.

Starting in 2014, [A] would regularly transfer bitcoins he received from the wallets to an unidentified person who either gave [A] U.S. currency in person or deposited it into accounts belonging to the defendant, the complaint alleges.

Investigators reviewed a diary belonging to the unnamed person, who the government said pled guilty last July in California federal court to one count of operating an unlicensed money transmitting business and one count of money laundering.

Gannon said it appeared that the person was purchasing bitcoins from [A] below the prevailing market price, leading the agent to suspect that [A] was laundering the proceeds from the unnamed website.

A representative for the U.S. Attorney’s Office declined to comment.

The government is represented by Seth B. Kosto of the U.S. Attorney’s Office for the District of Massachusetts.

Antonenko is represented by Edward V. Sapone of Sapone & Petrillo LLP and by Jesse J. Bousquet.

The case is U.S. v. Antonenko, case number 1:19-mj-04153, in the U.S. District Court for the District of Massachusetts.


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