How a Money Laundering Crew Allegedly Moved Millions Through FanDuel
While sports betting has opened up for fans around the country, it has also introduced a greater attack surface for money laundering.
By Joseph Cox
This article was produced in collaboration with 404 Media, a new independent technology investigations site.
Alex Bogomolny ensured his new clients that he was working on cleaning $20,000 of their drug money. “We have a big team,” he told the clients in a text message on December 6, 2023. “BlackSnake Team,” he added.
The plan was to create accounts with different casinos and sportsbooks and in particular FanDuel, a very popular betting platform that has led the charge in the legitimization and surging popularity of sports betting in the U.S. Fresh accounts had limits on how much money they could deposit, but Bogomolny sent the clients screenshots of what established accounts were eventually capable of. They showed the accounts’ total winnings: $883,072.28 in one. $2,786,797.39 in another. The idea was that dirty money went in, legitimately gambled winnings came out.
Across multiple meetings and text exchanges, Bogomolny and an associate explained to their new clients how the scheme worked. The coconspirator said the crew was able to withdraw $8,000 a day, 5 times a week. Bogomolny said the group had controlled the FanDuel account with more than $2 million dollars worth of winnings for “a long time.” And his team was working on new software that would make the whole process faster, he said.
For the new clients, Bogomolny said they had set up three FanDuel accounts and had two people working on it.
“We’re open to ideas, we just need it clean,” the clients texted at one point, to which Bogomolny replied with “😎.” Over the coming weeks, leading up to last month, Bogomolny dutifully transferred the clients’, now purportedly clean, $20,000 back to them, minus a 6 percent cut for his washing services. He then agreed to launder another $50,000.
But they were no ordinary customers. Instead, they were undercover FBI agents investigating a sprawling money laundering enterprise. New court records and reporting from 404 Media peel back the curtain on how at least one professional money laundering crew has turned to FanDuel as a way to wash other criminals’ ill gotten gains, with Bogomolny potentially pushing millions of dollars through the betting service, according to an FBI-written criminal complaint unsealed this week.
Bogomolny’s alleged scheme highlights that while sports betting has opened up for fans around the country, it has also introduced a greater attack surface for money laundering. The U.S. Treasury Department warned in February of such risks; now the FBI alleges those risks have become a reality. Bogomolny’s machinations also allegedly involve a dizzying array of CashApp and PayPal accounts, Bitcoin transfers, massage parlors, and even a hacked gym in Ohio.
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Before his recent arrest, Bogomolny crossed paths with law enforcement multiple times. Around August 2013, Immigration and Customs Enforcement arrested Bogomolny in JFK airport while he was waiting to board a connecting flight to Russia. Then 41 years old, Bogomolny was wanted on multiple counts of fraud and illegal use of credit cards, CBS News reported at the time. The report said Bogomolny had been opening credit accounts under other peoples’ names.
Since then, Bogomolny’s fraud methods have only gotten more elaborate and now include FanDuel, according to the complaint. The plan generally involved having someone take a compromised credit card or CashApp account and load funds into a FanDuel account. Sometimes people opened these FanDuel accounts under their names and then provided Bogomolny or an associate with the login credentials. In one case, Bogomolny’s associate met someone in the lounges of Atlantic City, New Jersey. The associate told them to open a FanDuel account; in exchange, they would get a cut of the laundered funds.
Once a FanDuel account is loaded, a member of the group would then withdraw money at a physical casino’s cage cashier. One casino mentioned in the complaint is the Golden Nugget, also in Atlantic City. The complaint also includes examples of FanDuel accounts being digitally emptied via ACH and PayPal transfers, with some accounts seeing hundreds of thousands of dollars move through them.
Bogomolny’s associate is not named in the complaint, with the FBI instead describing them as “Coconspirator 1” and an Uzbekistan national. 404 Media took an email address included in the complaint, and found an associated LinkedIn profile of somebody based out of Atlantic City. That person did not respond to a request for comment.
Towards the end of 2023 is when the FBI went undercover against Bogomolny. He proceeded to spill all sorts of details: how he used casinos, CashApp, and transfers to launder funds; how he sold Bitcoin; and specifics of his FanDuel scheme. He also told one agent he had created a company called “Massages By Ashley.” 404 Media obtained business records for a company called Massages By Ashley LLC incorporated in New Jersey. The person listed as the manager of that entity did not respond to a request for comment.
In one of those undercover meetings with the FBI, Bogomolny agreed to launder the agents’ $20,000, according to the complaint. In that same meeting, Bogomolny mentioned a “hacking forum,” and later mentioned the username “BlackSnake Team” in a text message.
The transcript of that conversation with the undercover agents doesn’t name the specific hacking forum. But the FBI searched Bogomolny’s Brooklyn residence in August 2022 after he was allegedly caught receiving money from a hacked Ohio gym’s PayPal account. Among the wealth of evidence they gathered, including a mass of Social Security Numbers and credit card information, the FBI found a password for Verified.sc, a top-tier Russian language crime forum.
A user called BlackSnake, similar to the moniker that Bogomolny mentioned to the undercover agents, was active on Verified.sc, Alexander Leslie, threat intelligence analyst from cybersecurity firm RecordedFuture, told 404 Media. “This user advertised and discussed a variety of money laundering and fraud topics on the forum, both publicly and in private chats, including the purchase of banking logs and compromised credit cards, sending and receiving SMS messages in the European Union, UK, and US, and using Social Security number and date of birth lookup services,” he said.
Leslie said another user called “BlackSnakeTeam” was active on multiple other forums, where they offered a ransomware-as-a-service program. It is unclear if this user is connected to Bogomolny, but he did tell the undercover investigators that he would “put encryption for that database. Until they pay me,” referring to FanDuel and a seeming reference to the practice of encrypting files until a ransom is paid, according to the complaint.
When asked for comment, FanDuel declined to speak specifically about this case. The company pointed 404 Media to its policies on deposits and withdrawals which says that “All money that you withdraw from your Account is free from and unconnected to any illegality and, in particular, does not originate from any illegal activity or source.” The policies also say “you accept that all transactions may be checked for the detection of money laundering” and that FanDuel may report suspicious transactions to the authorities. The Golden Nugget directed 404 Media to FanDuel, but added “Golden Nugget does not control, or have anything to do with, FanDuel accounts—other [than] their guests being able to withdraw funds from their accounts at our casino cage.”
CashApp told 404 Media that money laundering is against its terms of service and the company takes action on violating accounts.
PayPal did not provide a response in time for publication.
Over the last several years, sites like FanDuel and its competitor DraftKings have had increasingly visible and lucrative deals with sports leagues, sports teams, and sports media, which has led to sports betting’s meteoric rise as an industry. NHL and NBA viewers are now exposed to roughly 3 gambling ads per minute during live game broadcasts, a recent study found. This surge in popularity has come alongside two massive scandals. Ippei Mizuhara, the former interpreter for MLB megastar Shohei Ohtani, has been accused of stealing $16 million from Ohtani to place sports bets with an illegal bookie in California (the indictment mentions Mizuhara also had accounts on FanDuel, DraftKings, and MGM.) NBA player Jontay Porter, meanwhile, is facing a potential lifetime ban from the league following the discovery of highly suspicious bets on DraftKings related to his specific performance in games.
404 Media has previously reported on how members of the Com, the nebulous online community, sometimes use online casinos such as Stake to gamble mountains of cryptocurrency they steal from victims.
Assistant U.S. Attorney Peter K. Glenn-Applegate, who is working on the Bogomolny case, declined to comment. No lawyer representing Bogomolny was listed on the docket.
Oh there's a third scandal. I don't know why nobody has cared about it yet. It involves how the online books target their advertising at kids, allow kids to open accounts without properly verifying identity/age (even though they're supposed to do so), allow kids to bet, lose, keep their money, and only verify the account if the account wins and tries to cash out, at which time they close the account and confiscate the funds. So the books entice kids to gamble, get them addicted, and put them in a situation where the only result is that they lose all of the money that (probably) they stole from their parents. And we have a generation of boys who now are addicted to sports betting, largely because the books are allowed to run incessant advertising about how betting is free money and how much their loser-bet parlays pay and how you can make live bets during the game, with these ads during the pre-game and during the game itself, when many of the viewers are kids. It's despicable and should have been reined in a long time ago.