California man laundered millions in Bitcoin and cash, gets 2-year sentence, authorities say
Mohammad owned and operated an illegal virtual-currency money services business called Herocoin
A California man who admitted to operating an unlicensed virtual currency business and laundering millions in Bitcoin and cash, has been sentenced to two years in federal prison, according to a report.
Kais Mohammad, 37, of Yorba Linda, pleaded guilty to operating an unlicensed money transmitting business, money laundering and failing to maintain an effective anti-money laundering program in September 2020, according to the U.S. Attorney’s Office, the Orange County Register reported.
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Mohammad owned and operated an illegal virtual-currency money services business called Herocoin. He operated the business from December 2014 to November 2019, and offered Bitcoin-cash exchange services, according to a spokesman for the U.S. Attorney’s Office.
He charged commissions of up to 25%, well above the market rate.
Mohammed operated kiosks at various malls, gas stations and convenience stores throughout Southern California.
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Customers could reportedly either buy Bitcoin with cash, or sell Bitcoin in exchange for cash that would be dispensed through the machines.
The U.S. Attorney's office said Mohammad knew that some of his clients’ funds came from illegal activity.
The company exchanged between $15 million and $25 million both in person and at the kiosks.
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Mohammad, a former bank employee, knew the rules about having to register his company with the U.S. Treasury Department’s Financial Crimes Enforcement Network.
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After choosing not to do that, he eventually did register, but failed to conduct due diligence and report suspicious customers.
As part of the plea agreement, Mohammad forfeited 17 kiosks and an unspecified amount of cash and cryptocurrency, officials said last year.