A Baja California resident pleaded guilty Monday in San Diego to operating an unlicensed money transmitting business in connection with the sale of hundreds of thousands of dollars in Bitcoin to more than 1,000 customers throughout the United States from January 2015 to April 2016.
According to his plea agreement, Jacob Burrell-Campos, 21, admitted to operating a Bitcoin exchange without registering with the Financial Crimes Enforcement Network of the U.S. Treasury Department, and without implementing the required anti-money laundering safeguards.
Burrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications, according to the plea agreement.
Burrell negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram. Burrell admitted that he had no anti-money laundering or “know your customer” program, and performed no due diligence on the source of his customers’ money, according to the U.S. Attorney’s Office.
The defendant initially purchased his supply of Bitcoin through a U.S.- based, regulated exchange, but his account was soon closed because of the large number of suspicious transactions. He then resorted to a cryptocurrency exchange in Hong Kong, where he purchased a total of $3.29 million in Bitcoin, in hundreds of separate transactions, between March 2015 and April 2017, according to federal prosecutors.
Burrell also admitted that he exchanged his U.S. currency, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer. Between late 2016 and early 2018, Burrell and others imported more than $1 million in U.S. currency on almost a daily basis. Burrell admitted that they did this in amounts slightly below the $10,000 reporting requirement.
Castillo pleaded guilty to making a false statement on his federal tax returns, and is scheduled to be sentenced on Dec. 13.
According to his plea agreement, Burrell agreed to forfeit more than $823,000 to the United States. His sentencing is set for Feb. 11.
— City News Service