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Bitcoin Criminal Mastermind Arrested for Money Laundering

Posted on in Criminal Defense

money laundering, San Jose white collar criminal defense lawyers, laundering money, Bitcoin, white collar criminalsWhen people hear the term “money laundering” they often think of gangsters back in the day running dirty money obtained by illegal means through shops, casinos, financial institutions, etc. in order to layer it into legally obtained funds and make the dirty money “clean.” However, with the advance of computer technologies money laundering techniques have become more sophisticated. The cyber white collar criminals of today frequently attempt to launder money through virtual currency platforms such as Bitcoin.

Bitcoin enables individuals to pseudonymously manage financial transactions via the use of peer-to-peer technology, rather than through traditional banks. According to a report from The Guardian, this platform is known to have relaxed standards when it comes to checking users' identities and for choosing not to collaborate with law enforcement. Additionally, the report notes that recently Bitcoin was allegedly used by a Russian criminal mastermind in an attempt to launder $4 billion in Bitcoin for people who made money via a variety of different illegal activities ranging from drug trafficking to computer hacking.

The funds seem to have been laundered through two different San Francisco based exchanges that are owned by the accused; so, if he ends up being tried for money laundering in California he will likely be charged under one or both of California’s main money laundering laws.

California’s Main Money Laundering Laws

In California there are two key money laundering laws. One criminalizes laundering money in general and the other which deals only with laundering dirty money obtained from drug trafficking. A brief overview of each is provided below:

  • CA Penal Code section 186.10: In order to convict someone of money laundering under this section of the California Penal Code the prosecution must prove that the defendant transacted (or attempted to transact) at least $5,000 in a seven day period through one or more financial institutions with (1) the intent to promote or facilitate criminal activity or (2) while knowing that the money represents the proceeds of criminal activity.

Violators can be charged with either a misdemeanor or a felony offense for violating this code section and, if convicted and sentenced based on the basic penalty schedule for money laundering, can be sentenced to serve up to three years in prison and/or pay a fine of up to $250,000, or twice the amount of the money laundered, whichever is greater.

  • CA Health and Safety Code section 11370.9: Under this code section it is illegal to (1) knowingly receive, acquire, or engage in a transaction involving proceeds known to be derived from illegally transporting or selling drugs (2) with the intent to disguise the source of these proceeds in order to evade state or federal reporting requirements.

Violators can be charged with either a misdemeanor or a felony offense for violating this code section and, if convicted, can be sentenced to serve up to four years in prison and/or pay a fine of up to $250,000, or twice the amount of the money laundered, whichever is greater.

Let Us Help You Today

If you face allegations of having committed a financial crime at either the federal or state level in California, the passionate San Jose white collar criminal defense lawyers of Jachimowicz Law Group should be your next call. We are a comprehensive law firm based in Northern California with extensive experience defending clients charged with white collar crimes such as money laundering, fraud, tax evasion, theft, and embezzlement.

Sources:

https://www.theguardian.com/technology/2017/jul/27/russian-criminal-mastermind-4bn-bitcoin-laundering-scheme-arrested-mt-gox-exchange-alexander-vinnik

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