The U.S. Department of Justice (DoJ) has announced the sentencing of three people accused of operating an illegal BTC business that allegedly allowed its clients to launder money through digital asset exchanges. The three were also ordered to pay a $200,000 in U.S. dollars and BTC as penalties.
Christopher Boden, Daniel Reynold DeJager, and Leesa Beth Vogt were leaders of The Geek Group, a non-profit entity, which according to the DoJ, was a front for BTC money laundering activities.
In a press release, the DoJ said the three would buy BTC from registered exchanges, launder it and then sell it to clients, many of whom were allegedly criminals. The suspects also structured deposits of the cash proceeds to avoid detection of their operation. In total, between March 2017 and December 2018, the three sold more than $740,000 in BTC to their clients.
The DoJ said that the three knew that many of their clients were criminals, including drug dealers, and were happy to serve them. They even touted themselves to be money launderers who could sell ‘clean BTC,’ which they believed law enforcement authorities couldn’t trace. They also told their customers that they didn’t collect Know Your Customer information, making their services even more untraceable to their clients.
For the three, making money wasn’t the only motivation, as they told the Western District of Michigan District Court. They credited their business to their ‘anarchy streak,’ saying they were drawn to the possibility of making money “while deposing government controlled currency with one that was anonymous.”
However, BTC isn’t anonymous. The BTC blockchain is public and immutable, making it easy to track transactions and nab those who use it to launder proceeds of illicit activities.
Boden also solicited the services of an undercover agent to collect money from one of his debtors, “using violence if necessary,” federal authorities said.
Thinking the agent was a cocaine dealer, Boden reportedly told him, “If all I wanted to do was f*** him up, his head in burlap is easy to do. I want my money. I don’t give a f*** about him; I don’t give a f*** about his family. I want my money.”
The three pleaded guilty to their charges back in October 2021. Judge Robert Jonker of the Western District of Michigan sentenced Boden to 30 months in custody and ordered him to pay $75,000 and forfeit BTC, among other penalties, on charges of money laundering, operating an unlicensed money transmitting business, and structuring deposits to evade financial institutions’ reporting requirements.
DeJager, 35, from Washington, pleaded guilty to conspiracy to operate an unlicensed money transmitting business and money laundering. He received 10 months behind bars and was ordered to pay $25,000.
Vogt, a Grand Rapids, Michigan native, pleaded guilty to structuring while operating the unlicensed money transmitting business. She was sentenced to four years of probation and ordered to pay $62,711 to the government.
Collectively, the three were ordered to pay and forfeit over $200,000 in BTC and U.S. dollars.
Commenting on the case, agents from the Internal Revenue Service (IRS) and Homeland Security Investigations shot a warning to criminals who believe that using digital assets gives them anonymity, reminding them that the U.S. government will stamp crime out from the burgeoning industry.
“These defendants knew they were breaking the law and ran their illegal money transmitting business anyway. […] My hope is the Court’s sentences will deter others who think cryptocurrency operates in a lawless environment from committing similar financial crimes,” U.S. Attorney Andrew Birge added.
In recent weeks, the DoJ has cracked down on major digital asset crimes, including arresting the couple alleged to be behind the $4.5 billion Bitfinex hack and money laundering scandal. It has also prosecuted BitMEX operators for violating the Bank Secrecy Act and indicted the BitConnect Ponzi scheme founder, although the latter remains at large.
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