Online Crypto Exchanger Admits to Operating Without Money Transmitter License

On Wednesday, March 13, 2024, David Scotese pled guilty in a federal court in Long Island, New York to operating an unlicensed money-transmitting business. Scotese, a 54-year-old man from California, admitted to running the business between 2016 and 2023 without registering as required by law.

As part of his guilty plea, Scotese agreed to forfeit over $1.3 million worth of cryptocurrency, cash, and precious metals. This includes hundreds of thousands of dollars in cryptocurrency like bitcoin, roughly $200,000 in coins and metals, and more than $130,000 in cash that officials found in Scotese’s home and car when he was arrested last June.

In a statement, U.S. Attorney Breon Peace warned that this prosecution should serve as a warning to others running unlicensed money-transmitting businesses. He said that registering with the Financial Crimes Enforcement Network (FinCEN) and complying with regulations is necessary to secure the financial system from criminal activity like drug trafficking. Failure to do so will result in prosecution, Peace added.

The indictment against Scotese charged him with operating an unlicensed money-transmitting business and money laundering. While he pled guilty to the first charge, he did not enter a plea to the money laundering charge. That charge alleges that in October and November 2021, Scotese knowingly conducted a transaction involving proceeds he knew were from narcotics trafficking.

Businesses that transmit money like the one operated by Scotese online are required to register with FinCEN and obtain state licensing. This is to ensure proper financial reporting and compliance with laws barring money laundering, according to prosecutors.

On his LinkedIn profile, Scotese states that he is currently seeking employment due to being accused of these charges. As part of his bond conditions, while awaiting trial, he must look for a job since his savings were frozen by authorities.