US Attorney Seeks 18-24 Months for Man Who Embezzled $340K in Relief Funds to Start Crypto ATM Business

News | May 7, 2024 By:

On Thursday, April 18, 2024, Damian Williams, United States Attorney for the Southern District of New York, filed a sentencing memorandum in the case of United States v. Charles Riley Constant in the United States District Court for the Southern District of New York before Judge P. Kevin Castel.

Constant had previously pleaded guilty to interstate transportation of stolen money for his role in a scheme involving stolen Small Business Administration (SBA) COVID-19 relief funds. Constant was the owner and CEO of C2 LLC, a money services business registered with FinCEN. In July 2020, over $1 million from several fraudulently obtained SBA Economic Injury Disaster Loans were deposited into C2’s bank accounts.

While Constant claimed to not know the loans were fraudulent, he began transmitting the money through cryptocurrency exchanges. Over 600 thousand dollars worth of bitcoin was sent to an individual, who then transferred the funds to others. Constant retained a portion of the stolen money as well. The filing states he later used some of the funds to purchase Bitcoin ATMs for a new business of his own called Coindawg LLC.

The memorandum argues a sentence within the sentencing guidelines range of 18–24 months is appropriate. As CEO of a money services business, Constant should have been aware of financial crime risks but instead embezzled nearly $340,000 of SBA funds and converted them for personal use. The sentencing filing emphasizes that disaster relief money was intended to help struggling businesses during the COVID-19 pandemic.

The memorandum asserts Constant did not need to steal given his past lucrative employment in finance and aviation. It aims to deter similar theft from future government assistance programs. The request aims to promote respect for the law and provide just punishment through a substantial sentence, as Constant’s actions undermine aid for small businesses.

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