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Man Sentenced for Running an Illegal Bitcoin Exchange

U.S. Attorney Annette L. Hayes announced that Louis Ong, 37, had been sentenced for effectively laundering millions of dollars in Bitcoin for undercover agents who had indicated their money originated from a successful drug distribution operation. U.S. District Judge Robert S. Lasnik sentenced the man to three years of supervised release, suspended with 20 days in jail and a $1 million forfeiture. Ong was arrested in July 2017 for Operating an Unlicensed Money Transmission Business.

Ong, however, registered as a currency exchanger with FinCEN, the government agency responsible for regulation regarding money laundering, terrorist financing, and various financial fraud activities. Many know of the “Know Your Customer” (KYC) or “Anti-Money Laundering” (AML) laws that make dealing with some cryptocurrency exchanges a complicated mess. FinCEN, or the Financial Crimes Enforcement Network, established those laws, including those that cover the regulation of cryptocurrency.

U.S. Attorney Annette L. Hayes reminded the public that the darknet was not a “free pass for crime and mayhem.” She failed to connect the dots between Bitcoin exchanges and “mayhem.” The attorney added, “this defendant knew full well [that] the laws and rules apply to crypto currency dealings just as they [apply] to other types of financial transactions.” Throughout the course of the operation, Homeland Security Investigations agents told Ong what he needed in order to legally—or legitimately—exchange Bitcoin for cash.

Court documents revealed that federal agents began their investigation into Ong in 2016. Federal agents had found an advertisement on the internet where he had offered to exchange Bitcoin for cash. For a fee. In February and in March 2017, Ong met with Homeland Security Investigations agents to exchange their Bitcoin. Even though Ong repeatedly informed the agents that he did not want to know where their Bitcoin had come from, the agents repeatedly informed him that they had earned the Bitcoin through drug distribution.

Months later, Homeland Security Investigations informed Ong that if he planned to continue exchanging currencies, he needed to register as a currency exchanger with FinCEN. Ong registered and informed Homeland Security that he had indeed taken the steps needed for legitimizing his growing business. (A business growing due to the influx of Bitcoin from Homeland Security Investigations agents.)

After he had registered with FinCEN, Ong reportedly “failed” to report transactions deemed “suspicious” by the HSI agents behind the transactions. The agents wrote that they had informed Ong several times that they needed their funds laundered, and they were from drug related crimes. He maintained that he had no interest in knowing the origin of their funds. He wanted, in his own words, “plausible deniability.”

The agents conducted three transactions prior to the FinCEN registration. After the sixth transaction, HSI agents arrested Ong. He was indicted on August 27, 2017. He pleaded guilty to Operating an Unlicensed Money Transmission Business on February 15, 2018.

In court in May, U.S. District Judge Robert S. Lasnik listened to Ong’s apology and apparent remorse. He sentenced the man to a suspended sentence and a fine of $1 million.

 

5 comments

  1. America sucks….Period!

    Can not afford healthcare or good schools, but can always find time to waste tax payers money chasing small fish exchanging bitcoins.

    If they are not putting you in jail and stealing your money they are busy bombing other nations.

    Americans in general are a bunch of wimps, they let their Governemnt push everyone around and do nothing. Instead of organizing and fighting, they fight amongst themselves over who has better cars or lifestyles.

    BUNCH OF LOSERS!!!

    • Anything the central government touches goes to shit. We spend more money per person on healthcare and education than any other country in the world, yet the quality keeps going down and costs keep increasing. Why? Because the government regulates and even outright controls everything in those businesses, which creates legal monopolies and cartels. These are the same losers who can’t even run the post office or the DMV correctly and yet they think they can successfully run every facet of everybody’s life.

    • There’s a saying that goes “The way only way to win is to not play”. In the case of the U.S., it’s fully accurate, especially with the whole financial aid mess with colleges and all.

      Your words are worthy of noting.

  2. Yo What The F*ck do you know , Amerikka, I struggle against the foreign influence in my country all the time. The Entire world has always wanted to resources of America. Our Civil War history points that out. “WIMPS” Shit talk from a country that was bailed out of a war on 2 occasions by America.
    Yo WAKE THE F*CK UP. The people are not your problem, THE BANKERS ARE!! Hello DUH, Divide and Conquer. Nationalism should have died off with Hitler. I am a F8cking Earthling God Dammit. We Earthlings have a common enemy, stop nationalizing shit asshole. The Military Industrial Complex (MIC) and the Bankers who hold MIC’s money and collect from the war dead. The Bankers who own all the News Media Networks. Shut of your TV, and join the earthlings, and stop passing the buck. The Common enemy, forget Nationalism

  3. is this real?! was this really a win for the fed? this is a laughable joke what in gods name is going on someone please slow the federal government get off social media and give a fuck please. delorian 2 man this is terrible

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