A Bitcoin trader was sentenced to 41 months in federal prison for using cryptocurrency for money laundering.
August 05, 2018 07:40:40
Cryptocurrency is an exciting technology that helps put economic opportunities in the hands of everyday people. Just like any other economic system, though, it can be used for both good and bad. A perfect example of this is the infamous Silk Road. Many countries worry about cryptocurrency being used for money laundering purposes, and it is a valid concern. Case in point is an Arizona Bitcoin trader who just got sentenced to 41 months in the federal pen for that very reason.
Washing Away Dirty Money with Bitcoin
The man in question is Thomas Mario Constanzo, who also went by the moniker of Morpheus Titania. Federal agents raided his home last year, confiscating a box of ammunition and cryptocurrencies.
His crime? Well, there were a number of them. He was initially indicted on having weapons, but this seems to have just been a placeholder. A following indictment included charges of operating an unlicensed money transmitting business as well as money laundering charges.
The unlicensed money transmitting business is what caught the attention of authorities. (The federal and state governments absolutely hate people operating in the financial sphere without strict oversight.) Apparently, Constanzo placed an ad on an exchange saying he could handle cash transactions up to $50,000 in value. A joint task force was comprised of the local Scottsdale police department and the federal DEA, ICE, and IRS agencies.
Found Guilty of Money Laundering
Undercover agents posing as heroin and cocaine dealers approached Constanzo. He told them Bitcoin was a great way to cover their tracks and put law enforcement off their trail. The agents gave him $164,700 over the course of 2 years for him to launder via cryptocurrency. In addition, Constanzo used Bitcoin to purchase drugs for himself and others.
Constanzo could have faced a very long prison sentence. He was convicted of five counts of money laundering, each of which can carry up to a 20-year sentence. He received a sentence of 41 months, with credit being given for the time he’s been behind bars since his arrest last year. He also had 50 bitcoins seized, which are now worth about $350,000.