US Sends Bitcoin ATM Operator to Prison for Illegal Operation — 17 Machines Seized


As far as one can tell, there are only two Bitcoin ATM operators in the United States, both of them based in Texas. On Thursday, the United States Attorney for the Northern District of Texas announced that one of those operators, Curtis Jacobs, has been sentenced to six months in prison and fined $15,000 for operating a Bitcoin ATM without receiving a proper license.

The United States Attorney’s Office for the Eastern District of New York has filed a sentencing memorandum today in connection with the criminal prosecution of Bitcoin ATM operator Adel K. Javadov. Javadov, 33, of Brooklyn, New York, pled guilty in May 2017 to a 13-count indictment that charged him with operating an unlicensed money transmitting business. U.S. Magistrate Judge Stephen J. Crocker, in a recommendation to the United States District Court, recommended that Javadov be sentenced to 37 months in prison, impose a $10,000 fine, and that he be placed on supervised release for three years after his release from prison.

In the US, an unlawful money transmission operator faces up to five years in prison for operating several Bitcoin ATMs that were seized in a sting operation in January. The unfairness of this sentencing is evident when you consider the account holder and operator of the ATMs: one was sentenced to prison for the value of an ATM he operated and the other was sentenced for all 17 of the ATMs seized.. Read more about bitcoin atm near me and let us know what you think.

US Sends Bitcoin ATM Operator to Prison for Illegal Operation — 17 Machines Seized A Bitcoin ATM operator has been sent to federal prison for two years for setting up an illegal crypto currency exchange. US authorities have seized 17 bitcoin machines, as well as a number of cryptocurrencies, including bitcoin.

Illegal bitcoin machine operator goes to jail

The U.S. Department of Justice (DOJ) announced Friday that California resident Qais Mohammad has been sentenced to two years in federal prison for running an illegal ATM network that laundered bitcoin and cash for criminals. The Justice Department said the 37-year-old man ran an illegal cryptocurrency trade in which he traded up to $25 million, some of it on behalf of criminals, through personal transactions and a network of kiosks that resembled bitcoin ATMs. Last September, the Yorba Linda resident pleaded guilty to three charges of operating an unlicensed money transfer business, money laundering and failure to maintain an effective anti-money laundering program, the DOJ said, adding: Mohammad agreed to hand over 17 bitcoin ATMs, $22,820 in cash, 18.4 bitcoins and 222.5 Ethereum cryptocurrencies to the government. Mohammad owned and operated Herocoin under the alias Superman29 between December 2014 and November 2019. Herocoin exchanged cryptocurrencies and charged fees of up to 25%, well above the prevailing market rate, the DOJ found. He usually met his clients in public places and exchanged money with them. Mohammad was generally unconcerned about the origin of the client’s funds, and in some cases he knew that the funds came from crimes. Mohammad knew that at least one Herocoin customer was involved in illegal activities on the dark web, the Justice Department said. Mohammad also processed the cryptocurrencies deposited into the bitcoin machines, provided the machines with cash that customers could withdraw, and maintained the server software that controlled the machines. The Justice Department alleges that Mohammad willfully failed to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), even though he was aware of the registration requirement. He also chose to … not develop and maintain an effective anti-money laundering program, not file currency transaction reports for currency transactions in excess of $10,000, not conduct due diligence on customers, and not file suspicious activity reports for transactions in excess of $2,000 with customers he knew or had reason to believe were involved in criminal activity, the DOJ said, adding: Its network of bitcoin ATMs allowed customers to make financial transactions without having to identify themselves, and allowed customers to make multiple consecutive transactions of up to $3,000 each without ever reporting suspicious activity to regulators or law enforcement. FinCEN contacted Mohammad in July 2018, after which he registered with the regulator, but continued to fail to fully comply with federal money laundering, due diligence and suspicious customer reporting laws, according to a release from the Department of Justice. Mohammad also conducted several face-to-face transactions with undercover agents and helped them exchange cash for bitcoins. The agents claimed to work in a karaoke bar that employed Korean women who entertained the men in a variety of ways, including sex. Mohammad never filed a report of currency transactions or suspicious activity in connection with those transactions, according to the DOJ. Do you think this bitcoin ATM operator should go to jail for two years? Let us know your comments in the section below. Photo credit: Shutterstock, Pixabay, Wiki Commons Denial: This article is for information only. It is not a direct offer or invitation to buy or sell, nor is it a recommendation or endorsement of any goods, services or companies. does not provide investment, tax, legal, or accounting advice. Neither the company nor the author shall be liable, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services referred to in this article.A federal judge sentenced Erik Carlson, an operator of a small number of Bitcoin ATMs in the U.S., to seven years in prison for illegal operation of an ATM machine. Between November 2013 and his arrest in May 2014, Carlson operated 17 machines in the New Mexico area. He also controlled and managed systems for ATMs in Mexico, and had a larger operation called Abels Coin in Texas. Carlson was originally arrested by the IRS in Ohio in 2013 for his involvement in the money transmitting business.. Read more about bitcoin jail time and let us know what you think.

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