A San Diego man described by federal officials as a “prolific Bitcoin dealer” is in custody, on suspicion of sending cash payments overseas to buy Bitcoin and circumvent laws against money laundering.
Jacob Burrell Campos, 21, was arrested August 13 at the Otay Mesa Port of Entry.
Burrell is being held without bond on a 31-count indictment alleging he ran an illegal money transmitting business. If convicted of the charges, Burrell could spend the rest of his life in prison.
Burrell would accept cash either in person or via MoneyGram then deposit the cash into an account in the name of Bitfinex, a crypto-currency exchange in Hong Kong, according to the U.S. Attorney’s Office.
At a bond hearing on Friday, Assistant U.S. Attorney Robert Ciaffa said Burrell sold approximately $750,000 worth of Bitcoin to more than 900 buyers. In exchange, Burrell charged a 5-percent fee.
In order to operate legally as a Bitcoin “exchanger”, Burrell should have registered with the Department of Treasury and followed the anti-money laundering protocol, Ciaffa said. This includes reporting any suspicious cash transactions to the government.
Bitcoin is a cryptocurrency in which assets exist only in a digital form and are unregulated. Funds are moved between people instead of through financial institutions. An investor may hold bitcoin in a digital wallet which is vulnerable to hackers.
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Federal prosecutors allege Burrell brought close to $1 million in unregulated cash into the U.S. banking system.
He faces 28 counts of international money laundering. Each carries a maximum penalty of 20 years in prison and a $500,000 fine.
Burrell most recently lived in of Rosarito, Baja California, Mexico but had bank accounts in the United States.
He’s charged with conducting an unlicensed money transmitting business, failing to maintain an anti-money laundering program, International money laundering and conspiracy to structure international instrument transactions.
This is not the first indictment filed in San Diego against a Bitcoin dealer. In February, Morgan Rockcoons, 30, of Las Vegas was accused of accepting $14,500 from an undercover officer in exchange for $9,200 worth of bitcoin in a bid to conceal profits from the illegal sale of hash oil.