Jacob Burrell-Campos recently pleaded guilty to charges of running an illegal money transmitting operation. This plea comes after his indictment on money laundering and tax evasion charges relating to the sale of more than $750,000 worth of Bitcoin in the United States.
Illegal Money Transmitting Business
According to Fox5 San Diego, Burrell-Campos, a resident of Baja California entered into a plea agreement on Monday (October 29, 2018). Based on this plea agreement, Burrell is pleading guilty to charges relating to his unlicensed Bitcoin trading operation.
Back in August, Live Bitcoin News, reported on Burrell’s arrest after being caught trying to enter the country from Mexico. Burrell’s operations ran for more than two years, servicing about 1,000 customers.
Based on the details of the case made available, Burrell ran adverts on Localbitcoins.com – a peer-to-peer Bitcoin trading service. He also employed encrypted applications to send and receive messages with potential customers.
The U.S. Attorney’s Office also revealed that Burrell admitted to not establishing any form of know-your-customer (KYC) or anti-money laundering (AML) protocols. He charged a five percent markup on all transactions.
Adding to the list of his felonies, Burrell also said he kept money abroad in Mexico with Joseph Castillo – a precious metal merchant based out of San Diego. Along with a group of others, Burrell brought in over $1 million per day. Most of the participants brought in less than $10,000 to avoid the legal reporting requirement for larger sums.
Thus, Castillo was also indicted for tax evasion and pleaded guilty for his role in the matter. Castillo’s sentencing will be in December while Burrell’s comes up in February 2019. Burrell will also forfeit about $823,000 to the government.
Law Enforcement Cracks Down of Bitcoin Money Laundering
Burrell’s situation is symptomatic of a larger crackdown in the United States against unlicensed money transmitting businesses especially those conducted via Bitcoin and other cryptocurrencies. Virtual currencies aren’t illegal in the United States but there are strict regulations that guide business operations involving money transfer.
These regulations are to prevent black market money transfer which usually has connections to money laundering, drug trafficking, and several other illegal activities. Also, in August, Live Bitcoin News ran the story of one Thomas Mario Contanzo, sentenced to 41 months in prison for crimes similar to those of Burrell.
Do events like this help to reinforce the inaccurate narrative that Bitcoin and cryptocurrencies are a conduit for illegal activity? Let us know your thoughts in the comment section below.
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