Strategic Federal And State Criminal Defense

California man admits to using Bitcoin kiosk to launder money

On Behalf of | Sep 4, 2019 | Federal Crimes |

Federal prosecutors in California have announced that a 25-year-old Westwood man has admitted to using a Bitcoin kiosk to launder approximately $25 million for a list of clients that included drug dealers who used illicit websites to sell narcotics on the dark web. According to an Aug. 23 press release from the U.S. Attorney’s Office for the Central District of California, the man has entered guilty pleas to four felony counts including operating a money transmitting business without a license and distributing methamphetamine. He is scheduled to make his first court appearance in September.

Federal agents took the man into custody in June 2017 after gathering evidence during a sting operation. A federal agent posing as a drug dealer asked the man to launder about $400,000. The man is said to have told the federal agent that he routinely performed such transactions. He is also accused of selling the agent about two pounds of methamphetamine for $6,000.

U.S. attorneys say the man concealed his illegal activities by putting the money he made in bank accounts bearing the names of fake businesses. His clients allegedly exchanged cash for virtual currency and vice versa using a kiosk that federal prosecutors referred to as a virtual money laundering ATM machine. The kiosk was not fitted with cameras and did not verify the identity of users before performing transactions according to court documents.

The rules restricting the behavior of government agents during undercover operations are strict, and experienced criminal defense attorneys might seek to have the charges against individuals accused of committing federal crimes dismissed when official reports suggest that they may have been violated. Attorneys may argue the affirmative defense of entrapment when the preponderance of the evidence reveals that federal agents used coercion or other overbearing techniques to induce suspects to act in ways that they otherwise would not have.