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A Bitcoin dealer from San Diego recently pled guilty to operating an unlicensed transfer business for his money. Jacob Burrell Campos was responsible for pleading guilty in a federal court on the process of operating unlicensed money transferring businesses throughout the United States. It’s estimated that he was able to work with over 1,000 customers across the United States from 2015 to 2016.
Under a plea agreement that was delivered to Burrell, he admitted that he had not registered with the financial crimes enforcement network or the US Department of treasury. Without any implementation of safeguards to prevent money laundering, his business operated either legally. The sale of hundreds of thousands of dollars was carried out throughout his arrangements.
Burrell completed the bulk majority of his advertising over the site LocalBitcoins.com and communicated with many of his customers through e-mail before meeting them in person to carry out many of the deals. He was able to also negotiated commission of roughly 5% above any prevailing exchange rate and was accepting cash in person for his exchange. Burrell’s case was further weakened by the fact that he had no due diligence on the source of his customers money. He was accepting in exchange for the commission value on each transaction.
When he got started he purchased a supply of Bitcoin through a US-based and regulated exchange. Shortly after he began completing his transfer is his account was closed due to the number of transactions being limited. In order to keep his business afloat he continued to work with exchanges in Hong Kong and purchased $3.29 million in Bitcoin at the height of his business.
The US currency that he exchanged was being kept in Mexico with the help of Joseph Castillo who is a San Diego-based precious metals dealer. He would continue to import his fortune in over US$1 million through an almost daily border run between 2016 in 2018. By bringing the money in allotments of under $10,000 the pair could able to forgo reporting amounts when crossing the border.
His partner, Castillo would go on to plead guilty to federal tax evasion and his sentencing case will be occurring in December of 2018.
With the plea arrangement made by Burrell, he would be forced to forfeit a total of $823, 357. Cases like this should be a warning to other individuals operating private cryptocurrency exchanges without the proper licensing and anti-money laundering requirements. The maximum fine that Burrell could face for his lack of due diligence could be five years in prison with up to eight $250,000 extra fine on top of his surrendered earnings.