Business

Gerald Fenech

21-year-old ‘prolific Bitcoin dealer’ indicted on money laundering charges

The number of persons who are getting caught up in all sorts of cryptocurrency-related scams and frauds continues to increase almost by the day. The latest arrest happened in the United States, where an alleged Mexico-based “prolific Bitcoin dealer” has been indicted and held without bond on an impressive number of money laundering charges.

Jacob Burrell Campos, 21, was arrested last week while he was entering the U.S. from Mexico at the Otay Mesa Port of Entry 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.

Assistant U.S. Attorney Robert Ciaffa, of the U.S. Attorney’s Office of Southern District of California, said Burrell sold an estimated $750,000 worth of BTC to over 900 customers across the country in 971 separate transactions—an activity that allegedly blew a giant hole through the legal framework of U.S. anti-money laundering laws. Burrell accepted cash in person or through his bank and MoneyGram accounts.

Because Burrell operated as a “bitcoin exchanger” and his activities constituted a ”money transmitting business,” Ciaffa said he’s required to register with the Department of Treasury and comply with all anti-money laundering requirements including “reporting suspicious cash transactions.”

Ciaffa claimed that Burrell accepted cash “with no questions asked,” adding that he “supplied hundreds of individuals with an easy outlet to avoid the anti-money laundering laws applicable to all financial institutions, including licensed and registered bitcoin exchanges,” for a 5% fee.

The indictment states that Burrell sent 28 wire transfers totalling over $900,000 from his bank accounts in the U.S. to a bank account in the name of Bitfinex in Taiwan. Ciaffa added: “Burrell sent the money from the United States to buy bitcoin and fund his business. With these and other funds, Burrell bought over $3 million worth of [BTC] in over 2,600 transactions. Burrell resorted to buying bitcoin through Bitfinex after his account was closed by Coinbase, a U.S.-based bitcoin exchange, for circumventing its ID verification process.”

The indictment also charged Burrell with conspiracy to structure the importation of monetary instruments. Ciaffa told the court that “Burrell agreed with others to smuggle over $1 million in U.S. dollars into the United States from Mexico, in amounts slightly less than $10,000, in order to avoid the currency reporting requirements.”

U.S. Magistrate Judge Karen S. Crawford ordered Burrell to be held without bail, citing that he has “significant ties to Mexico, citizenship in three countries, no steady employment in the United States, the ability to access large sums of cash, and a disdain and unwillingness to comply with U.S. laws.” Crawford noted that “Burrell posed a substantial risk of flight.”

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Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.

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