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California Man Gets 2 years in Prison for Laundering Bitcoin

Written by:
Associated Press
Published on:
May/31/2021

SANTA ANA, Calif. (AP) — A Southern California man who pleaded guilty to illegally operating kiosks where customers could buy Bitcoin with cash, or sell Bitcoin in exchange for cash has been sentenced to two years in federal prison.

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Kais Mohammad, 37, of Yorba Linda, received the sentence at U.S. District Court in Santa Ana Friday, according to an Orange County Register report.

Mohammad pleaded guilty last year to operating an unlicensed virtual currency business and laundering between $15 million and $25 million in Bitcoin and cash over a five-year period through Herocoin, federal prosecutors said.

The company operated kiosks at malls, gas stations and convenience stores throughout Southern California, where the exchanges would be dispensed through the machines.

Mohammad also knew that some of his clients’ funds came from illegal activity, said Ciaran McEvoy, a spokesman for the U.S. Attorney’s Office.

A former bank employee, Mohammad knew he was required to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network, that he needed to maintain an effective anti-money laundering program and that he needed to report various virtual currency exchanges, but chose not to, McEvoy said.

He eventually registered the company after he was contacted by FinCEN, but still failed to conduct due diligence and report suspicious customers, McEvoy said.

As part of the plea agreement, Mohammad forfeited 17 kiosks and an unspecified amount of cash and cryptocurrency, officials said last year.

Business/Financial News

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