On Monday (April 8), 22-year-old Bitcoin dealer Jacob Burrell-Campos was sentenced by a U.S. district court judge to "serve two years in prison and forfeit $823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States."
The news was announced via a press release issued by the U.S. Attorney's Office for the Southern District of California. According to the press release, American citizen Jacob Burrell Campos, (officially) a resident of Rosarito, Baja California, Mexico, was sentenced yesterday by U.S. District Judge Marilyn L. Huff.
As CryptoGlobe reported last year, on 17 August 2018, the U.S. Attorney’s Office for the Southern District of California announced via a press release that Jacob was "ordered held without bail today in connection with a 31-count indictment charging him with operating an illegal money transmitting business, failing to maintain an anti-money laundering program, international money laundering and conspiracy to structure monetary transactions." He had been arrested on 13 August 2018 when he had tried to re-enter the United States from Mexico.
Per Monday's press release, Jacob "has been in custody without bail since his arrest." He had been denied bail since he was considered a flight risk, the court having found out that he had close ties to Mexico, three citizenships, and no steady job in the U.S.
Jacob pleaded guilty on 29 October 2018, "admitting that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards."
His plea agreement says that Jacob "advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications." Apparently, he "negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram." Furthermore, it seems that he confessed to not having an anti-money laundering (AML) program and not performing " due diligence on the source of his customers’ money."
Also, it looks like Jacob further admitted that "at first, he 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," which made him resort 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."
Finally, he admitted that" he exchanged his U.S. cash, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer, and that between late 2016 and early 2018, he and others imported into the United States, on an almost daily basis, a total of over $1 million in U.S. currency, in amounts slightly below the $10,000 reporting requirement."
U.S. Attorney Robert Brewer said:
“The federal government will continue to investigate and prosecute all white collar criminals who refuse to comply with the anti-money laundering laws of the United States, and who assist others in avoiding scrutiny of their ill-gotten gains. I applaud the excellent work of prosecutor Robert Ciaffa and federal agents who investigated these crimes.”
And David Shaw, Special Agent in Charge for Homeland Security Investigations in San Diego, had this to say:
“Today’s sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions. HSI Special Agents are proud to work with our law enforcement partners to ensure the integrity of the U.S. financial system."
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