US Sentences Man to 3 Years in Prison for Operating Unlicensed Bitcoin Exchange Business
A California man has been sentenced to three years in federal prison “for operating an unlicensed business that exchanged at least $13 million in bitcoin and cash, often for drug traffickers,” the U.S. Department of Justice said. He agreed to forfeit various assets, including seized cryptocurrency.
Bitcoin Exchange Operator Sentenced to 3 Years in Jail
The U.S. Department of Justice (DOJ) announced Thursday that a California man, Hugo Sergio Mejia, was sentenced “to 36 months in federal prison for operating an unlicensed business that exchanged at least $13 million in bitcoin and cash, often for drug traffickers.”
The 50-year-old San Bernardino County man pleaded guilty on July 1 to “one count of operating an unlicensed money transmitting business and one count of money laundering,” the DOJ detailed.
Mejia operated a cryptocurrency exchange business converting bitcoin to cash and vice versa from May 2018 to September 2020. He charged commissions for these transactions but never registered his business with the Financial Crimes Enforcement Network (FinCEN). In addition, he established companies to mask his true activity, including Worldwide Secure Communications LLC, World Secure Data, and The HODL Group LLC, the Department of Justice detailed, elaborating:
During the nearly 2½-year period, according to the plea agreement, Mejia exchanged at least $13 million.
The DOJ described that Mejia met with a client who was working with law enforcement several times between May 2009 and March 2020 “to exchange bitcoin for tens of thousands of dollars in cash.”
While conducting an exchange of 14.273 bitcoins for $82,150 in cash plus fees in March 2020, the client who worked with law enforcement informed Mejia that “his primary customer was a methamphetamine buyer in Australia who purchased methamphetamine every four to six weeks and sold it in Australia for five times more than the average price in the United States,” the DOJ explained.
The Justice Department noted, “Mejia and the client who was working with law enforcement conducted five bitcoin-cash transactions that cumulatively exceeded $250,000,” adding:
As part of his plea agreement with the government, Mejia agreed to forfeit all assets derived from the illegal conduct, including $233,987 in cash seized from residences in Santa Ana and Ontario, silver coins and bars, and approximately $95,587 in various cryptocurrency seized.
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