‘Superman’ Forced to Surrender Crypto in ATM Laundering Bust
(Bloomberg) -- The U.S. has seized about $1.25 million worth of Bitcoin and Ethereum cryptocurrency from a California man as part of his sentencing to two years in prison for illegally exchanging as much as $25 million in person and through Bitcoin ATM kiosks -- some of it for criminals.
Prosecutors also took 17 of his ATMs and about $23,000 in cash, according to a statement from the Justice Department.
Kais Mohammad, 37, who also went by “Superman29,” was sentenced Friday by a federal judge in Santa Ana. He pleaded guilty last year to operating an unlicensed money transmitting business, money laundering and failing to maintain an effective anti-money laundering program, according to a statement by the U.S. attorney’s office in Los Angeles.
In an emailed statement, Mohammad’s lawyers, Michael A. Goldstein, and Hagop Kuyumjian, said they thank the court for recognizing the circumstances that reduced his prison time “significantly below the government’s recommendation.”
Mohammad was required to forfeit 18.4 Bitcoin and 222.5 Ethereum. Bitcoin is currently valued at about $37,500; Ethereum at $2,500. The U.S. has seized cryptocurrency through forfeiture for years, periodically conducting auctions to sell it off.
Mohammad processed cryptocurrency deposited into the ATMs, maintained the software and supplied the machines with cash that customers would withdraw, prosecutors said. He didn’t register is company with the U.S. Treasury Department or file transaction reports for exchanges of more than $10,000, according to the statement.
Bitcoin ATMs are believed to be sometimes involved in money laundering, as some fail to adhere to a stringent “know your customer” protocol. Regulated crypto exchanges are required to collect customer identities. Some Bitcoin ATMs don’t do as good a job at that.
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