A 21-year-old bitcoin dealer from Baja California was ordered held without bail Friday in connection with a 31-count indictment charging him with international money laundering and other financial crimes related to his digital-currency transactions.
Jacob Burrell-Campos, of Rosarito, was arrested Monday as he tried to enter the U.S. from Mexico through Otay Mesa Port of Entry.
During a bond hearing Friday in federal court in San Diego, Assistant U.S. Attorney Robert Ciaffa described Burrell-Campos as a prolific bitcoin dealer who sold about $750,000 worth of the cryptocurrency to hundreds of buyers throughout the United States.
The defendant conducted 971 transactions with more than 900 customers, accepting cash in person, through his bank accounts and via MoneyGram, according to prosecutors.
As a bitcoin “exchanger” whose activities constituted a money-transmitting business, Burrell-Campos was required to register with the U.S. Department of Treasury and comply with all anti-money-laundering requirements, including reporting suspicious cash transactions, Ciaffa told U.S. Magistrate Judge Karen Crawford.
Burrell-Campos, however, accepted cash “with no questions asked” and, in return for a 5 percent fee, supplied hundreds of people with an easy way to evade money-laundering laws applicable to all financial institutions, even those dealing in bitcoin, the assistant U.S. attorney alleged.
Burrell-Campos’ activities “blew a giant hole” through the framework of U.S law by soliciting and introducing into the nation’s banking system close to $1 million in unregulated cash, Ciaffa said.
Burrell-Campos, charged with 28 counts of money laundering, sent 28 wire transfers totaling over $900,000 from his bank accounts in the U.S. to a bank account in Taiwan in the name of Bitfinex, according to the indictment.
The defendant resorted to buying bitcoin through Bitfinex, a Hong Kong cryptocurrency exchange, after his account was closed by a U.S.-based bitcoin exchange for circumventing its identification-verification processes.
The defendant, who was born in San Diego, allegedly conspired with others to smuggle over $1 million in U.S. currency into the U.S. from Mexico in amounts slightly less than $10,000 in order to avoid currency-reporting requirements.
In all, the indictment charges the defendant with operating an illegal money-transmitting business, international money laundering, failing to maintain an anti-money-laundering program and conspiracy to structure monetary transactions.
In ordering Burrell-Campos held without bail, the judge found that he posed a substantial risk of flight due to his significant ties to Mexico, citizenship in three countries, access to large sums of cash, lack of steady employment in the U.S. and alleged disdain for American laws.
–City News Service