Deputy abused police powers to back a crypto figure’s extortion and staged arrest plans targeting rivals.
Ties between law enforcement and crypto figures have come under fresh scrutiny after a U.S. court ruling. A former Los Angeles County sheriff’s deputy has been sentenced for helping a crypto entrepreneur target business rivals. Prosecutors said the case shows how authority was used to pressure victims and control financial outcomes. Events linked to the scheme included forced transfers, threats, and a staged arrest.
$127K Forced Transfer Tied to Deputy and Crypto Entrepreneur Scheme
Michael David Coberg, 44, was sentenced to 63 months in prison and ordered to pay $127,000 in restitution. He pleaded guilty to conspiracy to commit extortion and conspiracy against rights, according to the Department of Justice. Authorities said Coberg worked with Adam Iza, a cryptocurrency entrepreneur known as the “Crypto Godfather.”
As contained in a recent disclosure, Coberg’s role went beyond security duties. He acted as a partner and advisor while still serving as a deputy and helicopter pilot. Court filings show Iza paid him at least $20,000 each month. Both men also discussed starting a business tied to anabolic steroids.
Prosecutors said financial gain was the main motive. Their filing stated Coberg broke his oath and used his badge to support private interests.
One key incident in October 2021 involved a victim linked to a financial dispute with Iza. Coberg joined security personnel who brought the victim to Iza’s home. Iza displayed firearms during the meeting, including an assault rifle placed near a desk.
Coberg told the victim he was an active-duty officer and questioned him about the dispute. While Coberg stood nearby, Iza forced the victim to transfer $127,000 to an account under his control. A video of the transaction was recorded. Afterward, guards took the victim’s passport and returned him to his hotel.
Pressure on the victim continued the next day as Coberg again questioned him and asked about his business partner’s location. He later took both men to a shooting range inside the residence. At that point, Iza held the victim at gunpoint and demanded another payment from the partner.
False Arrest Scheme Highlights Dark Side of Digital Asset Rivalries in U.S. Case
Another scheme, more structured in setup, targeted a second victim in September 2021. Coberg and others planned to bring the victim from Miami to Los Angeles. The goal was to stage a drug-related arrest that could be used as leverage.
A co-conspirator contacted the victim, posing as an ex-girlfriend. After arrival, the victim was picked up in a white Tesla and taken to obtain drugs. The group then drove to a planned stop location.
Christopher Michael Cadman, another deputy, assisted in the plan. Coberg falsely reported that a suspect in a white Tesla had drugs and an active warrant. Officers stopped the car, found cocaine and psilocybin mushrooms, and arrested the victim.
During the arrest, Coberg drove past the scene with Iza in the vehicle. Iza recorded the incident and later sent images to mock the victim. Messages exchanged after the event showed coordination between those involved.
“Coberg swore an oath to uphold the Constitution and laws of the United States. Instead, [he] betrayed that oath and those he swore to protect, abusing the awesome power of his badge. And he did so for an all-too-common reason: greed,” prosecutors said.
Federal agencies, including the FBI and IRS Criminal Investigation, led the case. The Los Angeles County Sheriff’s Department also provided support. Cadman pleaded guilty in August 2025 and is awaiting sentencing.
