A Yorba Linda man was sentenced to 2 years in federal jail after he admitted to working an unlicensed digital foreign money enterprise and laundering thousands and thousands in Bitcoin and money, federal authorities stated.
Kais Mohammad, 37, pleaded responsible to working an unlicensed cash transmitting enterprise, cash laundering and failing to keep up an efficient anti-money laundering program in September 2020, the U.S. Legal professional’s Workplace stated. He was handed the sentence Friday by Choose Josephine Staton.
Mohammad owned and operated Herocoin, an unlawful virtual-currency cash companies enterprise, from December 2014 to November 2019, and provided Bitcoin-cash change companies, Ciaran McEvoy, spokesman for the U.S. Legal professional’s Workplace stated. He charged commissions of as much as 25%, effectively above the market charge.
The corporate operated a community of kiosks at numerous malls, fuel stations and comfort shops all through Southern California, the place prospects may both purchase Bitcoin with money, or promote Bitcoin in change for money that will be distributed via the machines, McEvoy stated.
Mohammad additionally knew that a few of his purchasers’ funds got here from criminality, McEvoy stated. In all, his firm exchanged between $15 million and $25 million each in particular person and on the kiosks.
A former financial institution worker, Mohammad knew he was required to register his firm with the U.S. Treasury Division’s Monetary Crimes Enforcement Community, that he wanted to keep up an efficient anti-money laundering program and that he wanted to report numerous digital foreign money exchanges, however selected to not, McEvoy stated.
He ultimately registered the corporate after he was contacted in July 2018 by FinCEN, however nonetheless did not conduct due diligence and report suspicious prospects, McEvoy stated.
Over a seven-month interval, ending in August 2019, Mohammad additionally performed in-person transactions with undercover brokers, who stated they labored for a karaoke bar that employed ladies from Korea who entertained males in numerous methods. Mohammad took $16,000 in money in change for Bitcoin even after the brokers stated the funds have been from criminality, McEvoy stated.
As a part of the plea settlement, Mohammad forfeited 17 kiosks and an unspecified amount of money and cryptocurrency, officers stated final 12 months.