A bitcoin ATM operator has been sent to federal prison for two years for running an illegal cryptocurrency exchange operation. US authorities have seized 17 bitcoin ATMs with some cryptocurrencies, including bitcoin.
Illegal bitcoin ATM operator sent to jail
The US Department of Justice (DOJ) announced on Friday that a California man, Cass Mohammed, has been sentenced to “two years in federal prison for operating an illegal ATM network for criminals to rob bitcoin and cash.”
The Justice Department said the 37-year-old operates an illegal crypto business “that exchanges up to $ 25 million”, some of which are “personal transactions on behalf of criminals and through a network of bitcoin ATM-type kiosks”. Were.
The DOJ reported, a Yorba Linda resident, pleaded guilty in September last year to “a three-count criminal information charge of failing to maintain an unlicensed money transfer business, money laundering and an effective anti-money laundering program” I went.”
Mohammed has agreed to seize 17 Bitcoin ATMs, $ 22,820 cash, 18.4 bitcoins and 222.5 Ethereum cryptocurrencies to the government.
Mohammed owned and operated HiroCoin from December 2014 to November 2019 using the nickname “Superman 29”. The DOJ stated that HerCoin was a crypto exchange business, charging a commission of up to 25%, “well above the current market rate.”
He usually met his clients in a public place and exchanged currency for them. “Mohammed generally did not inquire about the source of clients’ funds and on some occasions, he knew the money was proceeds of criminal activity. Mohammed knew that at least one of his heroin clients engaged in illegal activities on the Dark Web Was, ”the Department of Justice said.
Mohammed also processed cryptocurrencies deposited at bitcoin ATMs, supplied machines with cash to withdraw customers, and maintained server software that operated the machines.
The Justice Department said that Mohammed “intentionally failed to register his company with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN)”, although he was aware of the need for registration. They have “no … developed and maintained an effective anti-money laundering program, filing currency transaction reports for currency exchanges of more than $ 10,000, due diligence on customers, and transactions of more than $ 2,000. Chosen to file a suspicious activity report in which he knew, or had reason to suspect, was involved in criminal activity, “the DOJ detailed, adding:
With respect to its bitcoin ATM network, Mohammed’s machines allowed customers to conduct financial transactions without any identification requirement and customers had multiple, frequent transactions of up to $ 3,000 without ever reporting suspicious activity to regulators or law enforcement. permitted to.
According to the DOJ, FinCEN contacted Mohammed in July 2018 and they subsequently registered with the regulator, but “failed to fully comply with federal law related to money laundering, due diligence, and reporting suspicious customers.” . “
Mohammed also made several personal transactions with undercover agents, enabling him to exchange cash in bitcoins. The agents represented that they worked at a karaoke bar, which employs women from Korea who entertain men in various ways, including engaging in sexual activities. The DOJ stated, “Mohammed never filed a currency transaction report or suspicious activity report for these transactions.”
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