By Nate Raymond
NEW YORK (Reuters) - A Florida software engineer and a New Jersey pastor engaged in lies and corruption to facilitate an illegal bitcoin exchange business whose operators wanted to take over a small credit union to evade scrutiny, a federal prosecutor said on Wednesday.
At the start of a trial in Manhattan federal court, Assistant U.S. Attorney Won Shin told jurors that programmer Yuri Lebedev schemed with others to bribe Trevor Gross, the pastor and head of a Jackson, New Jersey-based credit union housed in his church.
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Shin said Gross accepted bribes including a $150,000 church donation in exchange for helping unlicensed bitcoin exchange Coin.mx's operator take over Helping Other People Excel Federal Credit Union.
Coin.mx, which employed Lebedev while running through a front called "Collectables Club," in exchange could use the credit union to evade scrutiny of banks wary of processing payments by individuals buying the virtual currency.
"The bribes and lies had a simple, shared purpose: For the defendants Lebedev and Gross and their co-conspirators to make money," Shin said.
But lawyers for Lebedev, 39, and Gross, 52, said they did nothing wrong and were being blamed due to actions by Anthony Murgio, who ran Coin.mx and who they said manipulated people while trying to illegally grow the business.
"Yuri was in the wrong place at the wrong time with the wrong people," said Eric Creizman, Lebedev's lawyer.
Kristen Santillo, Gross' lawyer, said he was tricked into believing Coin.mx was a memorabilia club, and thought there was nothing wrong about a donation to the church, and which did not benefit him personally.
"He didn't know anything about what they were up to," she said.
The trial followed an investigation rooted in a data breach that JPMorgan Chase & Co <JPM.N> disclosed in 2014 that exposed over 83 million accounts, leading to charges against nine individuals.
Gross, Lebedev and Murgio were not accused of hacking. But prosecutors said Coin.mx was owned by an Israeli behind the breach, Gery Shalon.
Prosecutors say Shalon, together with Maryland-born Joshua Samuel Aaron, orchestrated cyber attacks that resulted in the theft of over 100 million peoples' information.
Prosecutors said they carried out the hackings to further other schemes with another Israeli, Ziv Orenstein, including pumping up stock prices with promotional emails. Shalon, Aaron and Orenstein have pleaded not guilty.
Regulators took the credit union into conservatorship in 2015. Murgio pleaded guilty to charges related to Coin.mx in January.
(Reporting by Nate Raymond in New York; Editing by Bernard Orr)