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The US Department of Justice comes down hard on a man who admitted to illegally exchanging some $15-25 million in cash for crypto
In brief
California man Kais Mohammad will plead guilty to laundering money via crypto.
He admitted to exchanging $15-25 million from 2014 to 2019.
Mohammad performed transactions in person and via Bitcoin ATM machines.
Los Angeles-area man has been charged by the United States Department of Justice with knowingly laundering money obtained through illegal means via cryptocurrency, and for unlawfully operating a series of Bitcoin and crypto ATM machines.
According to the department, the 36-year-old Kais Mohammad (a.k.a. “Superman29”)—who claims to have exchanged $15-25 million—will plead guilty to the three charges: operating an unlicensed money transmitting business, as well as one count of laundering money and another for not maintaining a program to prevent money laundering.
Mohammad’s plea agreement affirms the government’s charges that he operated an illegal money services business called Herocoin between 2014 and 2019. Via Herocoin, Mohammad would meet clients in a public location to buy and sell Bitcoin with a commission rate of as high as 25% for the service.
The agency’s press release suggests that Mohammad typically didn’t inquire as to the origins of the money he was buying and selling, but did knowingly launder money from criminal enterprises, including illegal activity on the dark web. He also purchased and operated 17 ATM machines in and around Los Angeles, letting users buy and sell Bitcoin while allowing him to monitor and identify transactions.
Mohammad, a former bank employee, admitted to intentionally not registering his business with the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN), let alone alerting the agency to suspicious transactions or developing an anti-money laundering program. He did ultimately register the business with FinCEN after the agency contacted him in July 2018, but he did not fully comply with federal laws thereafter, according to the DOJ.
Undercover agents interacted with Mohammad and his ATMs several times in 2018 and 2019, including purchasing some $13,500 total in Bitcoin from an ATM—transactions that were then not reported, as required by law.
Mohammad also allegedly conducted in-person transactions with undercover agents who claimed to work at a “karaoke bar” where they claimed illegal sexual acts took place. Mohammad continued to perform the transactions (including one for $16,000) and did not file a transaction report or suspicious activity report afterwards.
Mohammad faces a maximum of 30 years in federal prison for the crimes that he has agreed to plead guilty to in the coming weeks, and has forfeited cash, cryptocurrency, and his ATM machines as part of the agreement.
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