A California man has been sentenced to three years in federal prison “for operating an unlicensed business that exchanged at least $13 million in bitcoin and cash, often for drug traffickers,” the U.S. Department of Justice said. He also agreed to forfeit other assets including the seized cryptocurrency.
Bitcoin Exchange Operator Convicted to Three Years In Jail
The U.S. Department of Justice (DOJ) announced Thursday that a California man, 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 San Bernardino County man pleaded guilty on July 1 to “one count of operating an unlicensed money transmitting business and one count of money laundering,” the DOJ detailed.
Mejia owned a bitcoin exchange company that converted Bitcoin to Cash and vice versa between May 2018 and September 2020. Although he charged commissions on these transactions, he never registered his company with the Financial Crimes Enforcement Network. He also created companies to hide his real activity. These included Worldwide Secure Communications LLC and World Secure Data LLC. The Department of Justice elaborated:
During the nearly 2½-year period, according to the plea agreement, Mejia exchanged at least $13 million.
The DOJ described that Mejia met with a client who was working with law enforcement several times between May 2009 and March 2020 “to exchange bitcoin for tens of thousands of dollars in cash.”
While conducting an exchange of 14.273 bitcoins for $82,150 in cash plus fees in March 2020, the client who worked with law enforcement informed 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,” the DOJ explained.
The Justice Department noted, “Mejia and the client who was working with law enforcement conducted five bitcoin-cash transactions that cumulatively exceeded $250,000,” adding:
Mejia entered into a plea deal with the government and agreed to forfeit any assets that were derived from illegal conduct. This included $233,987 cash taken from Santa Ana and Ontario residences, silver coins, bars and around $95,587 in various crypto seized.
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