Florida programmer sentenced to 16 months for bitcoin exchange scheme

NEW YORK (Reuters) - A Florida software engineer was sentenced to 16 months in prison on Friday after being found guilty of scheming to help an illegal bitcoin exchange avoid having banks and regulators look into its activities.

Yuri Lebedev was sentenced by U.S. District Judge Alison Nathan in Manhattan, according to Nicholas Biase, a spokesman for federal prosecutors.

The bitcoin exchange involved in the case,, was linked to an investigation of a data breach at JPMorgan Chase & Co, revealed in 2014, that exposed more than 83 million accounts.

“We are dismayed that Mr. Lebedev has been sentenced to prison,” Lebedev’s lawyer, Eric Creizman, said in an email. Federal sentencing guidelines called for up to 97 months.

Lebedev was convicted in March along with Trevon Gross, a New Jersey pastor.

Prosecutors charged that Lebedev helped arrange bribes to Gross, including $150,000 in donations to his church. In exchange, they said, Gross helped the operator of, Anthony Murgio, take over a small credit union Gross ran from his church.

Murgio used the credit union to evade scrutiny of banks wary of processing payments involving the virtual currency, prosecutors said. Lebedev was accused of working for through a front called “Collectables Club.”

Gross is scheduled to be sentenced later this month. Murgio pleaded guilty in January, and was sentenced to five-and-a-half years in prison in June.

The trial followed a probe rooted in the JPMorgan data breach, which lead to charges against nine people.

Gross, Lebedev and Murgio were not accused of hacking, but prosecutors said was owned by an Israeli, Gary Shalon, who was behind the JPMorgan hack.

Prosecutors have said that Shalon, together with Maryland-born Joshua Samuel Aaron, orchestrated cyber attacks that resulted in the theft of information from more than 100 million people.

Prosecutors said they carried out the hacks to further other schemes with another Israeli, Ziv Orenstein, including pumping up stock prices with promotional emails.

Shalon, Aaron and Orenstein pleaded not guilty to criminal charges.

Reporting By Brendan Pierson in New York; editing by Grant McCool