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- Former deputy used badge to support crypto linked extortion scheme
- Authorities uncover staged arrest plot tied to crypto disputes case
- DOJ highlights misuse of power in multi million crypto targeting operation
A federal court has sentenced a former Los Angeles County Sheriff’s deputy to 63 months in prison for his role in a crypto-linked extortion scheme. The case centers on a law enforcement officer who used his position to engage in coercive acts in connection with a financial conflict. The U.S. Department of Justice said that Michael David Coberg, a 44-year-old man, was admitted to conspiracy to commit extortion and conspiracy against rights. As a result, the court also ordered him to pay the victim 127,000 in restitution.
According to the prosecutors, Coberg was connected to Adam Iza, a cryptocurrency entrepreneur, who identified himself as Crypto Godfather. Additionally, officials reported that the two targeted individuals were involved in business disputes in the crypto sphere. Consequently, the scheme was a mixture of financial strain and coercion. Also, authorities explained how Coberg was funding these activities with his badge. At one event, he escorted armed associates in a tussle with a victim. The prosecutors claimed that the person was transferred to make the payment of $127,000 due to threats of violence. Moreover, the group took away the passport of the victim upon leaving.
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Staged Arrest Scheme Used to Pressure Target
The authorities also disclosed another operation: a planned fake arrest. The DOJ stated that the group enticed one of the victims, who was residing in Miami, to Los Angeles under some pretenses. Thereafter, they ordered the person to get narcotics and then set up the scene to authorize a traffic stop. After that, the arrest was conducted by law enforcement officers who considered it legitimate. The prosecutors, however, explained that the situation had been premeditated. As a result, the arrest turned out to be a weapon to coerce the victim in a raging conflict.
Additionally, the authorities noted that Coberg was an active participant in such actions, not a spectator. According to prosecutors, he breached the duties that were associated with his oath as a deputy. This, they observed, was an abuse of power for profit. In the meantime, Adam Iza remains in the middle of the larger case. He has been in detention since September 2024 and has already confessed to various crimes, such as fraud and conspiracy against rights. His sentence has yet to be handed down.
Moreover, prosecutors claim that Iza was the head of an organization of associates and off-duty officers. This group was reported to be involved in arbitration, fraud, and crypto-related conflicts. One of the stages of the operation was meant to recover up to $100 million of digital assets, authorities assert.
Coberg’s sentencing highlights the legal consequences of abusing law enforcement authority in financial disputes. Law enforcement agencies are still seeking accountability from all persons involved in the broader crypto extortion.
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