On April 8, 2019, Jacob Burrell Campos of Rosarito, Mexico, was sentenced to two years in prison and to forfeit USD 823,357 in illicit profits for operating an unlicensed money transmitting business in connection with his sale of hundreds of thousands of dollars in Bitcoin to over 1,000 customers throughout the United States. Burrell, a U.S. citizen, pleaded guilty, admitting that he operated a Bitcoin exchange without registering with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury, and without implementing the required anti-money laundering safeguards.
According to the plea agreement, Burrell advertised his business on Localbitcoins.com, and communicated with his customers through email and text messages, often using encrypted applications. He negotiated a commission of 5 percent above the prevailing exchange rate, and accepted cash in person, through nationwide ATMs, and through MoneyGram. Burrell admitted that he had no anti-money laundering or “know your customer” program, and performed no due diligence on the source of his customers’ money.
Burrell admitted that, between late 2016 and early 2018, he and others imported into the United States, on an almost daily basis, a total of over $1 million in U.S. currency, in amounts slightly below the $10,000 reporting requirement. In a sentencing memorandum, prosecutors argued that unlicensed money transmitters pose a serious threat to the integrity of the U.S. financial system by creating a hole in the anti-money laundering regulatory scheme and allowing criminals to launder their cash proceeds without scrutiny. In this case, Burrell provided his clients with anonymity and privacy, and exchanged over $1 million in unregulated cash.