A Californian will spend time behind bars for a Bitcoin money laundering operation, after being caught by undercover agents.
Kais Mohammad, 37, used the nickname “Superman29” to advertise a Bitcoin-cash exchange service dubbed Herocoin, charging commissions of up to 25%.
Mohammad’s illegal business traded up to $ 25 million through in-person transactions and ATM-style kiosks for Bitcoin. Undercover agents eventually incriminated Mohammad by posing as employees of a karaoke bar requesting his services for a prostitution ring.
A police attack helped close the case when Mohammad encountered an undercover law enforcement officer and exchanged $ 16,000 in cash for 1.58592 Bitcoin. He allegedly did not file a currency transaction report or suspicious activity report for these transactions, although the agent revealed that the money was from illegal activity.
The United States Attorney’s Office for the Central District of California says Mohammad is a former bank employee who has trained others on compliance issues.
“Mohammad knew he was required to develop and maintain an effective anti-money laundering program, but he chose not to do so, to file currency transaction reports for currency exchanges greater than $ 10,000, to perform due diligence on clients and to file suspicious activity reports for transactions over $ 2,000 involving clients he knew, or had reason to suspect, were involved in activities criminal.
Mohammad pleaded guilty to operating an unlicensed money-laundering business, money laundering, and failing to have an effective anti-money laundering program in place, by ceding 17 Bitcoin ATMs, $ 22,820 in cash, 18.4 Bitcoin and 222.5 Ethereum to government.
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