New Haven Man Charged With Operating Illegal Crypto Exchange Business

News | June 19, 2024 By:

On Friday, June 7, 2024, the U.S. Attorney’s Office, District of Connecticut announced that a New Haven man has been charged with operating an illegal money-transmitting business involving cryptocurrency.

According to the press release, 55-year-old William McNeilly of New Haven was indicted on four charges related to operating Global Income Marketplace LLC and Global NuMedia LLC as unlicensed money transmission businesses.

The indictment, returned by a federal grand jury on June 5th, alleges that McNeilly used the two companies he owned and operated to exchange customers’ cash, checks, and money orders for cryptocurrency. He is accused of charging transaction fees for this service but never obtaining the proper state license to legally transmit money.

Global Income Marketplace was registered with the state as a company involved in website development, computer repairs, and other technology services. However, between July 2019 and June 2022, prosecutors claim McNeilly exchanged over $1 million on behalf of clients across the United States through his cryptocurrency business.

McNeilly is further alleged to have opened bank accounts for the two companies, as well as a cryptocurrency exchange account to use for this unlicensed money transmission operation. In February 2021, TD Bank contacted McNeilly after a $10,000 wire transfer to one account was reported as fraudulent. The bank also informed him that a state license was needed but he is accused of ignoring the warning.

According to the release, the investigation revealed fraudulent cashier’s checks from romance scam victims were mailed to Global Income Marketplace and deposited. It is also alleged McNeilly was aware some funds involved were criminal proceeds from fraud schemes.

McNeilly was arrested on June 6 following his indictment and appeared in court the same day before U.S. Magistrate Judge Maria Garcia. He pled not guilty to all charges and was released on a $50,000 bond pending trial.

If convicted, McNeilly faces up to 5 years in prison for operating an unlicensed money-transmitting business. The additional money transaction charges each carry a maximum 10-year sentence. U.S. Attorney Vanessa Roberts Avery stressed all charges are merely allegations until proven guilty beyond a reasonable doubt in court.

This case illustrates the risks of unregulated cryptocurrency exchanges and money transmission businesses. Proper state licensing helps protect consumers and disrupt criminal operations. As decentralized technologies like Bitcoin continue growing in use, regulators aim to balance innovation with oversight to ensure public safety and compliance with federal and state money laundering laws.

Please contact BlockTribune for access to a copy of this filing.