Bitcoin Forum

Oh $#!T, I think I know who that is.  :-\

I'm certain he would not want me to name him, but I know a guy in that area with a sick mine. If it is who I think, there could be more to this story than a mine.

Thanks for the link , but is it really  or not ?

<< Investigators found that Powell received more than $3 million from individuals during an 18-month period ending in February 2014, according to the U.S. attorney's office. >> \

Wut.

He traded $3 million and got 4 years + 3 years supervised released? holy crap seems a bit excessive.

Anyone got PACER? would love more info on this case. It sounds like they nabbed him for not being a money transmitter (IE not having the right paperwork) not because any money laundering had occurred, which is kinda ridiculous if thats the case.


It says he was running an exchange.

It says he was running an exchange.

Deal in the FEDs market and they call up Merica to lay the Fing pwn down on you.

YOU WILL BE PUNISHED for competing with the USD, as I have warned many times before... the govs are just starting the war... it will get bad.. very bad.. you should have bitcoins competely offline that no one knows you own.  DO NOT PUT THEM IN A bank saftey box like a putz either, they will torture you to find out the passphrase.  No one can know about your stash.. not a soul.  Only put 10-20% of your holdings there.. the NSA knows you have bitcoins when they come for them "I have non" will land you waterboarded for months at utter best.

Just popped in to say the UK is deeming bitcoin private money like the Germans.  I highly doubt we will see BTC banned in any legit democracy.

It's not the guy I thought. He did not run an exchange, he had a few buyers to work with directly. But his mine was impressive when I saw it a few years back.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from).

As far as I know I haven't ever encountered him (which is surprising if he was moving over a million dollars of bitcoin).

I've been working on getting a Money Service Business license specifically because I was concerned about this possibility.  As soon as I realized that this was an issue in Illinois, I stopped all significant bitcoin exchanging and now only purchase for my own use (at sites like Chicago Sun Times, Overstock, Tiger Direct, Expedia, etc).  I've been trying to figure out what license I need and what the requirements are to get it for about 10 months now.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from).

As far as I know I haven't ever encountered him (which is surprising if he was moving over a million dollars of bitcoin).

I've been working on getting a Money Service Business license specifically because I was concerned about this possibility.  As soon as I realized that this was an issue in Illinois, I stopped all significant bitcoin exchanging and now only purchase for my own use (at sites like Chicago Sun Times, Overstock, Tiger Direct, Expedia, etc).  I've been trying to figure out what license I need and what the requirements are to get it for about 10 months now.

Lol. Your opinion has changed a lot in a few months:

This is the biggest problem in almost every country. We dont know what they want. But they can catch if the want !!!

You'll likely need to get a license in every state you do business in, so if you buy/sell bitcoins with someone in California, you need a license there too.

Typically costs in excess of $100k

and you should definitely see a lawyer about it.

PayPal operated as an unlicensed money transmitter in a couple of states for many years and were never charged, regulators know that the system is broken. Thats why I'm pretty shocked at how bad this guy got it, there must be more to this case.

why is that illegal to run bitcoin exchange? its not real money

Robert A Alvarado
FEDERAL PUBLIC DEFENDER
Suite 1500
401 Main St
Peoria, IL 61602
309-671-7891
309-671-7898 (fax)
Robert_Alvarado@fd.org
  Assigned: 06/20/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing   John D Powell (1)
TERMINATED: 12/05/2014
(Defendant)


Bradley W Murphy
US ATTY
One Technology Plaza
Suite 400
211 Fulton St
Peoria, IL 61602
309-671-7050
309-671-7259 (fax)
brad.murphy@usdoj.gov
  Assigned: 06/17/2014
  LEAD ATTORNEY
  ATTORNEY TO BE NOTICED   representing USA  (Plaintiff)

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

This is insane , really insane ::). So without it can you sell bitcoin face-to-face privately or not ?

It's being exchanged for real money. Therefore, according to the law in Illinois, you have to have a Money Service Business license or face felony charges.

I'm in northern Illinois (quite a bit north of the Bloomington-Normal area where this guy was from)...

... the money transmission laws and regulations are written very broadly.

They almost certainly apply even if you are exchanging one crypto-currency for another, and no "real money" is involved.

The only saving grace is that the laws only apply if you are operating "a business" -- so occasional lowish-value person-to-person exchanges done as a favor to friends at no markup from the current exchange rate is probably perfectly legal.

OMG, I wonder if it's you? Danny, I'm going to PM you initials of the person I'm thinking of. If it's you, ...well hey bud!

No. It's not me.  I know who you're talking about though.

I thought I knew who most of the bigger players are here in the northern Illinois area, but I didn't know this John D Powell.

By the way, my initials (in case it isn't obvious) are D.H.

Ah, well in that case; are you Satoshi Nakamoto?  :D

I am not a lawyer, but...

We need to hear from Marco on this one.  Marco?  Can you please comment?  This is crazy BS if true.  OK - if the guy was actually doing a heavy money laundering scheme - throw him away for a few years.  But if this is a simple crackdown on a bitcoin exchange for no other reason than failure to get money transmitter license then "Holy shit!".  I have to believe his deals were with some bad actors and he knew it.  Something like that.

He pleaded guilty, so I'm just guessing that this was part of a plea deal.  If so, then the details of what actually happened might be difficult to come by.

Is this a statistic or an assumption?
The Government is truly cracking down.

purchasing bitcoins directly does not need a money exchange license. but if you are operating a system which holds FIAT for future use for customers or movement between people, then you need a license.

basically if your business model includes a users balance denominated in dollars. get a license!

for instance localbitcoins holds no fiat and all transactions are for direct bitcoin purchases. then users or webmasters of localbitcoins do not need a license.

and also anyone working as a fiat escrow needs a license.

Obviously it is the huge amount of money he was dealing with. 
The odds that you will be prosecuted for trading $200 worth of Bitcoin here without a lisence are very low.

I suspect that each jurisdiction has its own rules regarding this and that such a blanket statement is likely to be mistaken in many jurisdictions.

Whoever he is, hope the punishment stays as an example to the Bitcoin community.

Just a thought, what if I sell some stupidly large random number (private key) or corresponding QR picture.  Mere coincidence, perhaps, that a bitcoin is sitting on that private key in a "blockchain" -- whatever that is  ;)  The customer can place ~$350 on the table and I hand over the qr code.  What the customer does with that number has no concern to me.  In this case I believe sales tax would have to be charged for the QR code as a consumer good.  Probably only works for in-person trades.

I'm guessing dude didn't have one of these:

http://moneytransmitterlaw.com/state-laws/illinois/

Hey, if it you want to run a business, you have to abide by the state or government's laws.  His fuck up alone, not Bitcoin's.

So couldnt he go to another state to live and avoid the punishment?

A Person charged in any State with Treason, Felony, or other Crime, who shall flee from Justice, and be found in another State, shall on demand of the executive Authority of the State from which he fled, be delivered up, to be removed to the State having Jurisdiction of the Crime.

Just a thought, what if I sell some stupidly large random number (private key) or corresponding QR picture.  Mere coincidence, perhaps, that a bitcoin is sitting on that private key in a "blockchain" -- whatever that is  ;)  The customer can place ~$350 on the table and I hand over the qr code.  What the customer does with that number has no concern to me.  In this case I believe sales tax would have to be charged for the QR code as a consumer good.  Probably only works for in-person trades.

Jesus fuck what? Can someone put what happened in layman terms?

i wonder why a guy who processed $3mil in transactions couldn't afford to hire an attorney?

and WHAT THE HECK exchange was he running?

Blew it all on drugs, gambling, and hookers?

My best guess was that he was meeting people from localbitcoins, but there aren't any details.  He could have had a black market hidden TOR site of some sort. He could have been trading here at bitcointalk in the Currency Exchange forum. He could have been on the OTC IRC channel, he could have been communicating with people on Reddit.

i wonder why a guy who processed $3mil in transactions couldn't afford to hire an attorney?

Additional Information On A Normal Man AKA John D Powell
Posted on December 12, 2014 by cazalla   

As John D Powell took a plea deal and plead guilty to two charges of operating an unlicensed money service business, few court documents are available. The documents that are available depict an articulate man who experienced a run of misfortune prior to his involvement with Bitcoin.

In a letter to Judge Shadid, Mr Powell cites the break down of his marriage and stress of surviving an aortic dissection as explanation for his decision to operate an unlicensed Bitcoin exchange. One could be forgiven for mistaking Powell's letter as one penned by a murderer who is remorseful for his crimes and if as claimed by the State, Powell did process USD $3 million in Bitcoin, it's clear it was a beacon of light for him despite yielding to the court in his apology letter.

Powell's letter also shows that he lost an amount of coins when Mt.Gox collapsed.

He writes:

    Judge Shadid –

    It's a well known adage that none of us know how much time we have left, and I may be more acutely aware of that than the average person. My heartbeat is not as dependable as it once was, and surviving an aortic dissection a few years ago intensified the mid-life crisis I was struggling with. I was indeed very lucky to still be alive, but to what end?

    My marriage of twenty five years was being exposed as a sham, stretching back many years, coming to light. I realized I had a far less than satisfactory relationship with my only son because of mindless neglect on my part. I began a personal inventory of how I'd spent my life and it bothers me still, for I haven't yet had the time to make up for my self-centered, career-focused romp.

    While recovering from my illness and reeling from the loss of my comfortable suburban lifestyle, I had time to think. And I had to admit to myself that I wasn't very happy after all.

    It's no stretch to say that I'm far more ashamed of wasting my life in pursuit of materialism than for anything that has brought me to the attention of your court.

    Change has come slowly, but I'm happy to recount how I've found deep contentment by turning attention to community, and away from self-centered endeavors. I have found redemption and renewal by devoting a large portion of my energy to helping those far less fortunate than myself.

    I realize this presents a new and ironic challenge for me, since I'm now in a position where it's harder to provide for my own basic needs. But I can truly say that nothing else provides the joy and satisfaction of things like volunteering at the local homeless shelter or food panty.

    This recovering sensation junkie has finally found his happy place. I just wish this epiphany had come to me earlier in life.

    I know this may sound like some "jail house conversion", but I began to chronicle this new direction in a personal blog several years ago. It is date-stamped and published online at sharethezing.blogspot.com. I look forward to many more positive posts.

    That is the good. Now for the bad and the ugly. I am truly sorry for the actions that have brought me before your court. I didn't take seriously my responsibilities with the business.

    I already knew what I was going to do with any profits, but ended up losing even the original capital used to get it started. I had lost 20k when the Japan-based broker called Mt.Gox suddenly folded, and lost another 25k to market fluctuations over time, so the "business" was fundamentally idle when law enforcement came to see me.

    I'm still happy to note that no one was ever cheated or shorted because my primary goal was to maintain a stellar reputation for fair trading.

    I then had what is now easy to see as a foolish notion to eventually sell the business to one of the many much larger brokers in that realm.

    Having said all that, I accept sole responsibility for my actions and lack of oversight.

    My only request is that as part of my punishment, I be sent somewhere I can be of use – somewhere I can be of service and value to others, I still have a lot to give.

    Thank you for taking the time to read this.

    Respectfully,

    John D. Powell

Other documents which were filed include:

    The Bitcoin wikipedia page.
    The Defendant's commentary on sentencing factors.
    The indictment.
    An exhibit and witness list which only includes a "group of photos".
    The Judgement.

Upon completion of his prison sentence, the conditions of Powell's supervised released include:

    Undertaking cognitive based therapy at his own cost, if financially able.
    Participation in psychiatric services or a mental health program as directed by the US Probation Office.
    Participation in a substance abuse treatment program which includes drug testing.
    Forbidden to operate a business or obtain employment which involves management of cash, credit, other financial instruments including "cyber-based currency" without prior approval of the US Probation Office. Powell must also disclose his conviction to potential employers.

Powell's inmate number is 72740-083.

This sounds like total BS. Where are the news reports of his arrest? Where are the news reports of his trial? Did they fingerprint him and immediately offer him a plea deal? Where are the indictments of all the people he was selling to/buying from? What department of the government ran the investigation/made the arrest? Arrest records are easy to verify and public record. Did they watch him for 18 months then one day say, "ok, that's enough evidence, let's wrap it up and arrest him"?

Something Awful is getting more clever.

http://qntra.net is the only website on the entire net that is showing this additional news esp. his imate number 72740-083
He is refering to a blog he wrote: http://sharethezing.blogspot.de/ in 2013
Correct me if I'm wrong: I find these posts seem to have a great lack of content and are written without any feelings. What is this? Code?
There is an email adress of the blogger JD (John D Powell) sharethezing@gmail.com
His facebook https://www.facebook.com/jdpowell.sharethezing has been deleted and even excluded from archive.org

Somebody able to contact him with that inmate number to find out what really happened? Though I am pretty sure we will not find this phantom John D. Powell.

It's obvious this dude wasn't exchanging bitcoins so local students could pay for college tuition.

He was certainly laundering money for at sorts of small time street/net operators...
Probably keeping next to zero KYC/AML records...
Until the Feds put him under a microscope and started doing business with him.

It's very likely that his entire operation has been taken over by the Feds...
Who are now posing as localbitcoins exchangers...
So it's hardly unusual that some dimwits on the web can't find all the details...
Even though the local press has dozens of articles on the case.

Once again Bitcoin is lumped in with petty, street level crime...
Reminds me of the sleazy dude at my Bitcoin Meetup...
That was openly bragging about 6 figure localbitcoins transactions.

Yeah I call BS! The media making shit up again to drive prices into the ground so that banking interests can get their hands on an ever increasing stash of bitcoins.

Banks today could give a shit about bitcoin.  It is far too early for any of them to start to buy bitcoin.  Only Silbert and Winkelvii could be considered 'banks' trying to amass bitcoin and they aren't doing what you allege by manipulating the press to effect prices.

Don't you find it at least a little curious that every press report has exactly the same wording (cut and paste journalism) but a national inmate search shows nothing? Instead of spouting a bunch of speculation nonsense why don't you dig up more real verifiable information and let us know what really happened. I'd love to know if the Feds are really targeting Localbitcoins because I use it all the time.

Almost every win for the courts, where the person is accused by a governmental agency, is essentially a win because the person placed himself in that losing position.

The reason is that a defendant can demand to face his accuser. They agency can't come forward and be questioned on the stand. The agency can't swear or affirm anything. Why not? Because the agency is words on paper, and doesn't have a mouth, or a body to take the stand with.

In addition, there hast to be damage or harm done to the agency that can be proven to have been done by the defendant. The agency can't feel pain. The agency can't really express any damage done to it. The closest is a violation of a contract.

In addition, the defendant can counter-claim-sue. His counterclaim has to be answered before that agency can go forward with its case. His claim should be done by himself, as a man, requiring the damaged man present himself so that he can repay him for the damages. If a damaged or harmed man does not come forward, he wins the whole thing. If some human comes forward with a claim of harm of damage, then they go the next step.

This never happened in this case. The guy got scared and made a deal. He hanged himself, essentially.

:)

Deal in the FEDs market and they call up Merica to lay the Fing pwn down on you.

YOU WILL BE PUNISHED for competing with the USD, as I have warned many times before... the govs are just starting the war... it will get bad.. very bad.. you should have bitcoins competely offline that no one knows you own.  DO NOT PUT THEM IN A bank saftey box like a putz either, they will torture you to find out the passphrase.  No one can know about your stash.. not a soul.  Only put 10-20% of your holdings there.. the NSA knows you have bitcoins when they come for them "I have non" will land you waterboarded for months at utter best.