Law enforcement agencies have shut down an e-Note service operated by Russian citizens, which served cybercrime groups targeting U.S. healthcare systems and critical infrastructure.
Federal prosecutors in Michigan, in coordination with international partners, have dismantled an online cryptocurrency money laundering service called E-Note and announced indictments against the alleged operator of the service – a Russian national accused of assisting cybercriminals in transferring illicit funds across borders.
The U.S. Attorney's Office for the Eastern District of Michigan announced that the FBI, Michigan State Police, and foreign law enforcement agencies seized E-Note's entire online infrastructure as part of a coordinated operation. The network is alleged to have been used by transnational cybercrime organizations, including those that have attacked the U.S. healthcare system and critical infrastructure.
Prosecutors announced charges against Mykhalio Petrovich Chudnovets, 39, who allegedly ran an e-Note service and participated in a money laundering conspiracy. Chudnovets is charged with conspiracy to launder monetary instruments, carrying a maximum sentence of up to 20 years in prison. The initial indictment, filed in September, was officially released on Wednesday.
Sophisticated money laundering network dating back to 2010
The indictment states that Chudnovets collaborated with financially motivated cybercriminals to transfer illicit profits across international borders and convert cryptocurrency gains into fiat currency. Initially, Chudnovets offered the service personally, using individual intermediaries to transfer funds. Since around 2017, he has provided these services through an online business called E-Note.
Since 2017, the FBI has identified more than $70 million in illicit profits generated from ransomware attacks, account hijacking, and other cyber-technological crimes that were channeled through the E-Note payment service and its associated money mule network.
According to court documents, Chudnovets began providing money laundering services to cybercriminals in 2010. Prosecutors allege he subsequently formalized and expanded the operation through E-Note – a platform he controlled and operated – allowing clients to transfer illicit profits internationally and convert crypto assets into various fiat currencies.
Authorities seized the servers hosting E-Note's operations, mobile applications, as well as the websites e-note.com, e-note.ws, and jabb.mn. Investigators also obtained copies of the servers containing customer databases and transaction records, which are expected to aid in the ongoing investigations.
Despite the alleged massive scale of the money laundering operation, E-Note appears to maintain a relatively low public profile. Several blockchain crime investigators have stated they are unfamiliar with the service. An older version of the website shows the service to be operated by E Note International FZ-LLC, a business structure commonly used by entities based within the Free Trade Zones of the United Arab Emirates (UAE).
This crackdown comes as the US intensifies its campaign to crack down on cryptocurrency-related crimes. According to Chainalysis, approximately $3.4 billion worth of cryptocurrency has been stolen since the beginning of the year, with actors linked to North Korea accounting for about 59% of the total losses.
