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 millions in Bitcoin and cash, federal authorities stated.
Kais Mohammad, 37, pleaded responsible to working an unlicensed cash transmitting enterprise, cash laundering and failing to take care of an efficient anti-money laundering program in September 2020, the U.S. Attorney’s Office stated. He was handed the sentence Friday by Judge Josephine Staton.
Mohammad owned and operated Herocoin, an unlawful virtual-currency cash providers enterprise, from December 2014 to November 2019, and supplied Bitcoin-cash alternate providers, Ciaran McEvoy, spokesman for the U.S. Attorney’s Office stated. He charged commissions of as much as 25%, nicely above the market fee.
The firm operated a community of kiosks at varied malls, gasoline stations and comfort shops all through Southern California, the place prospects might both purchase Bitcoin with cash, or promote Bitcoin in alternate for cash that will be disbursed by means of 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 Department’s Financial Crimes (*2*) Network, that he wanted to take care of an efficient anti-money laundering program and that he wanted to report varied 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 didn’t conduct due diligence and report suspicious prospects, McEvoy stated.
Over a seven-month interval, ending in August 2019, Mohammad additionally carried out in-person transactions with undercover brokers, who stated they labored for a karaoke bar that employed ladies from Korea who entertained males in varied methods. Mohammad took $16,000 in cash in alternate 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 quantity of cash and cryptocurrency, officers stated final yr.