Prosecutors Seek 8-14 Month Sentence for Man Involved in Crypto Money Laundering Scheme
On Wednesday, July 31, 2024, United States Attorney Damian Williams submitted a letter in advance of the sentencing of Nileshkumar Patel, who had pleaded guilty to charges related to operating an illegal money transmitting business. The letter was addressed to Vincent L. Briccetti, United States District Judge for the Southern District of New York.
Patel was involved in a conspiracy between July 2021 and September 2023 to operate an unlicensed money transmitting service, which illegally moved tens of millions of dollars and had two primary operations. First, it converted cryptocurrency into cash for customers, including some involved with drug dealing and computer hacking. Second, it allowed traditional hawala transfers of money from individuals in the eastern United States to people in India, avoiding regulated banking systems.
To facilitate these transfers, conspirators including Patel would collect large amounts of cash, typically between $100,000 to $300,000, from hawala customers in the U.S. This cash was then shipped as currency to the cryptocurrency customers in exchange for cryptocurrency. That cryptocurrency was transferred to hawala members in India, who distributed cash there to the designated recipients.
From February to September 2023, as part of cooperation with law enforcement, a confidential source arranged 80 controlled pickups of cash from the conspiracy totaling around $15 million. Patel personally took part in two pickups, delivering $110,010 in June and coordinating a $260,000 exchange in September. Prosecutors indicated Patel had also made other undocumented cash deliveries before the investigation began.
In the letter, prosecutors recommended a sentence within the guidelines range of 8–14 months in prison. They argued this was needed based on the seriousness of deliberately circumventing money transmission laws. While Patel may not have known specific end users, the risk of criminality was realized by hackers and drug dealers receiving funds. A sufficient deterrent sentence was also important to promote respect for law and stop future similar conduct.
The defense argued for probation and home confinement, citing Patel’s minor role. However, prosecutors indicated guidelines reductions already accounted for this and repeated participation showed a need for general deterrence. Coverage of the case in cryptocurrency and Indian media reinforced the message that such activities would face prosecution.
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