14 DAY TRIAL // Jacob Burrell Campos pleaded guilty in a U.S. federal court to the operation of a Bitcoin exchange he failed to register with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury.
Burell confessed to selling "hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States from January 2015 to April of 2016."
Besides not registering his Bitcoin exchange operation, Burell also did not implement any of the required anti-money laundering safeguards demanded by U.S. Department of Treasury regulations, and "performed no due diligence on the source of his customers’ money."
Moreover, Burell admitted to advertising his Bitcoin business using the localbitcoins.com platform, using often encrypted email and text messaging communication means to contact his customers.
"He negotiated a commission of 5% above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram," said Department of Justice, U.S. Attorney’s Office's press release.
After buying his initial Bitcoin supply using a U.S. regulated cryptocurrency exchange, Burell had his account disabled because of the sheer volume of shady looking transactions he was recording.
Burell conceded to operating an unlicensed Bitcoin exchange and illegally importing over $1 million to the U.S. on a daily basis
Afterward, Burell moved to a Hong Kong-based cryptocurrency exchange which allowed him to buy $3.29 million worth of Bitcoins, from March 2015 to April 2017 suing hundreds of transactions.
"Finally, Burrell admitted that he exchanged his U.S. currency, which he kept in Mexico, with Joseph Castillo, a San Diego-based precious metals dealer," confessed Burell. "Between late 2016 and early 2018, Burrell and others imported over $1 million in U.S. currency on almost a daily basis."
While Burell was moving his funds by staying below the $10,000 limit which required reporting to the U.S. financial authorities and he also made false statements on his federal tax returns to avoid detection.
Burell awaits its sentence on February 11, 2019, he will forfeit to the United States a total of $823,357.00 as per his plea agreement, and is facing a maximum of five years behind bars.
"The Department of Justice will continue to investigate and prosecute all individuals and businesses that seek to evade the licensing and anti-money laundering requirements under federal law," said U.S. Attorney Adam Braverman.