California Bitcoin Trader Charged With Money Laundering

Crime, News | August 20, 2018 By:

Jacob Burrell Campos, a 21-year-old bitcoin dealer from California, has been charged with various counts of money laundering for allegedly operating an illegal money transmitting business.

The US Department of Justice (DOJ) announced Friday that Burrell was ordered to be held without bail in connection with a 31-count indictment charging him with operating an illegal money transmitting business, failing to maintain an anti-money laundering program, international money laundering and conspiracy to structure monetary transactions.

During Campos’ bond hearing on August 17, assistant US Attorney Robert Ciaffa alleged that Burrell was a prolific bitcoin dealer who sold approximately $750,000 worth of bitcoin to hundreds of buyers throughout the United States. From January 2015 to April 2016, Burrell reportedly conducted 971 separate transactions with over 900 individual customers, and accepted cash in person, through his bank accounts, and through MoneyGram.

Ciaffa told the court that since Burrell operated as a “bitcoin exchanger” and his activities constituted a money transmitting business, he was required to register with the Department of Treasury and comply with all anti-money laundering requirements including “reporting suspicious cash transactions. Burrell’s unregistered business reportedly supplied hundreds of individuals with an easy outlet to avoid the anti-money laundering laws in return for a 5% fee.

“Burrell’s activities blew a giant hole through the legal framework of US anti-money laundering laws by soliciting and introducing into the US banking system close to $1 million in unregulated cash,” Ciaffa said.

According to the indictment, Burrell also sent 28 wire transfers totaling over $900,000 from his bank accounts in the United States to a bank account in Taiwan in the name of Hong Kong-based crypto exchange Bitfinex.

“Burrell sent the money from the United States to buy bitcoin and fund his business,” Ciaffa said. “With these and other funds, Burrell bought over $3 million worth of bitcoin in over 2,600 transactions. Burrell resorted to buying bitcoin through Bitfinex after his account was closed by Coinbase for circumventing its ID verification process.”

Burrell is also charged with conspiracy to structure the importation of monetary instruments. According to Ciaffa, “Burrell agreed with others to smuggle over $1 million in U.S. dollars into the United States from Mexico, in amounts slightly less than $10,000, in order to avoid the currency reporting requirements.”

In ordering Burrell held without bail, US Magistrate Judge Karen S. Crawford found that he had significant ties to Mexico, citizenship in three countries, no steady employment in the US, the ability to access large sums of cash, and a disdain and unwillingness to comply with US laws. The judge “concluded that Burrell posed a substantial risk of flight.”