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3 years in prison for unlicensed Bitcoin (BTC) exchange business

Sun 21 Nov 2021 ▪ 17h06 ▪ 3 min read — by James Taylor

A California man has been sentenced to three years in prison “for operating an unlicensed business that exchanged at least $13 million in Bitcoin and cash, often for drug traffickers,” the US Department of Justice reported. His assets, including cryptocurrency, have been confiscated.

Further details

Bitcoin (BTC) exchange operator Hugo Sergio Mejia was sentenced “to 36 months in federal prison for operating an unlicensed business that exchanged at least $13 million in Bitcoin and cash, often for drug traffickers.”

The 50-year-old resident of San Bernardino County pleaded guilty to “one count of operating an unlicensed money transmitting business and one count of money laundering,” the Justice Department reported.

Mejia operated a crypto exchange business converting Bitcoin into cash and back from May 2018 to September 2020. He charged users for the transactions, without ever registering his business with the Financial Crimes Enforcement Network (FinCEN). In addition, he created several companies to cover up his true activity, such as Worldwide Secure Communications LLC, World Secure Data, and The HODL Group LLC, the Department of Justice clarified.

According to the plea agreement, Mejia exchanged at least $13 million during two and a half years of operation.

The DOJ said that Mejia had repeatedly met with a client who cooperated with law enforcement agencies in the period from May 2009 to March 2020 “to exchange Bitcoin for tens of thousands of dollars in cash.”

While exchanging 14.273 BTC for $82,150 in cash in March 2020, the client who worked with law enforcement agencies told Mejia that “his primary customer was a methamphetamine buyer in Australia who purchased methamphetamine every four to six weeks and sold it in Australia for five times more than the average price in the United States.”

According to the Justice Department, “Mejia and the client who was working with law enforcement conducted five Bitcoin-cash transactions that cumulatively exceeded $250,000.” 

The DOJ added that as part of his plea agreement with the government, “Mejia agreed to forfeit all assets derived from the illegal conduct, including $233,987 in cash seized from his residences in Santa Ana and Ontario, silver coins and bars, and approximately $95,587 in various cryptocurrency seized”.

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James Taylor avatar
James Taylor

Trends are temporary. The blockchain isn’t a trend; it’s the future. I want to help as many people as possible understand it in a simple, clear and interesting way.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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