Yesterday Oct. 29th, a report was released by the Department of Justice (Doj) about a Southern California US citizen who plead guilty in court to operating an “unlicensed money transmitting business” between Jan. 2015 – Apr. 2016.
Jacob Burrell Campos reportedly admitted to conducting sales of “hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States” during the time period. Under US law, Campos’s operation is characterized as an unregistered “Bitcoin exchange.”
Where did Burrell conduct his business? On LocalBitcoins.com. Burrell reportedly paid for advertising on the site to attract himself business. His offer was that that he would buy/sell/trade Bitcoins at a rate of 5% commission over the prevailing price. According to the release Burrell would ‘often’ conduct negotiations through encrypted emails or messaging apps later on collecting payments either through cash in hand, Atm’s, or MoneyGram.
Burrell failed to register his business and client activities with the U.S. Financial Crimes Enforcement Network (FinCEN), and never conducted his due diligence (such as anti-money-laundering (AML) measures) on the source of funds.
Burrell’s ‘US based, regulated’ account was closed in 2016 for ‘suspicious activity’. After that, he looked outside of the US for a new platform and decided on using a Hong-Kong based platform. With this new account, Burrell reportedly purchased $3.29 million worth in Bitcoin between March 2015-April 2017. Now Burrell didn’t do this in all one transaction, but rather thousands of smaller transactions all valuing at under $10,000 each so they wouldn’t be flagged by the US and need to be declared.
Burrell’s near evil genius crime streak doesn’t end there either. Burrell admitted to holding his fiat currency in a Mexico based bank, which he later withdrew from and exchange his funds for precious metals from a San Diego dealer by the name of Joseph Castillo. With these earning never reported on Burrell’s tax forms, he now awaits sentencing for a false declaration on tax returns on December 13th.
Sentencing for Burrell’s Bitcoin actions will take place on February 11th 2019 with a maximum sentence set at 5 years in prison and a $250,000 fine.
“Unlicensed money transmitting businesses, especially those operating at or near the border, pose a serious threat to the integrity of the US banking system, and provide an ‘open door’ for criminals to utilize such businesses to launder the proceeds of their illicit activities,” said U.S. Attorney Adam Braverman. “The Department of Justice will continue to investigate and prosecute all individuals and businesses that seek to evade the licensing and anti-money laundering requirements under federal law.”