Bitcoin News Today: Gunpoint and Bitcoin: LA Deputies’ $37M Crypto Extortion Pleas

Los Angeles County Sheriff’s Department (LASD) deputies and a cryptocurrency businessman have pleaded guilty to federal charges in a conspiracy involving extortion, illegal search warrants, and tax evasion. The case, which implicates multiple law enforcement officials and Adam Iza—a self-proclaimed “Godfather” of the crypto world—has drawn scrutiny for the misuse of police authority and the exploitation of digital asset-related schemes. Michael Coberg, 44, and Christopher Cadman, 33, both former LASD deputies, admitted to aiding Iza in intimidating business rivals and orchestrating sham arrests. Coberg faces up to 30 years in prison, while Cadman could receive 13 years, according to court records. Eric Chase Saavedra, another LASD deputy, also pleaded guilty to conspiring with Iza to violate civil rights and commit tax fraud, with sentences pending for multiple defendants LASD Deputy Pleads Guilty to Federal Conspiracy Charges^[1].

The conspiracy unfolded through a series of coordinated abuses of power. Prosecutors allege that Iza, 24, hired LASD deputies as private enforcers to extort money from adversaries. In one instance, Coberg and other deputies held a victim at gunpoint at Iza’s Bel Air mansion, coercing a $127,000 transfer to Iza’s account. A separate scheme involved a staged traffic stop in Paramount, where Cadman and co-conspirators lured a victim to Los Angeles under false pretenses, leading to an unlawful arrest and the seizure of narcotics. Iza’s security team, including active deputies, recorded the arrest and shared it with the victim as a taunt. Court documents reveal that Iza paid Coberg up to $20,000 monthly for his services, while Saavedra’s private security firm charged Iza $100,000 per month for round-the-clock protection Former LA deputy pleads guilty to conspiracy charges^[2].

The case highlights systemic vulnerabilities in law enforcement oversight. Saavedra, a former federal task force officer, admitted to using his LASD credentials to access sensitive databases, obtaining personal information on Iza’s rivals and facilitating illegal search warrants. One such warrant, obtained under false pretenses, targeted a victim’s phone location to aid Iza’s attempts to recover a stolen laptop allegedly containing $100 million in cryptocurrency. Saavedra’s actions included fabricating affidavits and colluding with narcotics detectives to execute raids on individuals linked to Iza’s disputes. These tactics underscore the intersection of digital crime and institutional corruption, with prosecutors emphasizing the need for stricter accountability in law enforcement practices Crypto ‘Godfather’ and LASD Detective Agree to Plead Guilty^[3].

Tax evasion and financial misconduct further complicated the case. Iza and Saavedra admitted to concealing millions in income, with Iza evading approximately $6.8 million in federal taxes in 2021 and Saavedra failing to report $373,146 in earnings. Iza’s plea agreement also disclosed a $37 million fraud involving unauthorized access to Meta Platforms Inc. business manager accounts. IRS-CI played a pivotal role in unraveling the financial trail, leveraging its expertise in cryptocurrency transactions to trace illicit gains. The agency’s involvement underscores growing regulatory focus on crypto-related crimes, with officials warning that digital assets leave “trails” that are increasingly difficult to conceal IRS-CI Annual Report Highlights Crypto Enforcement^[4].

The fallout has prompted broader discussions about law enforcement integrity. U.S. Attorney Martin Estrada condemned the deputies’ actions as a betrayal of public trust, while the LASD relieved six deputies of duty amid the investigation. The case mirrors historical patterns of corruption, such as the Silk Road era, where law enforcement complicity enabled criminal enterprises. Experts note that while the incident reflects individual misconduct rather than systemic crypto exploitation, it highlights the need for robust oversight in both digital finance and law enforcement operations. As sentencing hearings approach, the case serves as a cautionary tale about the risks of conflating official authority with private gain in the rapidly evolving crypto landscape ‘A thief and a crooked cop’: L.A. deputy^[5].