2 years in jail for illegally selling hundreds of thousands in Bitcoin

[hugeblack]

Jacob Burrell Campos was sentenced to two years in jail and $823,357 million in illegal profits, due to the pledge of thousands of Bitcoins through an unlicensed money transfer company.
Where he pleaded guilty for running an unregistered platform and thus not subject to anti-money laundering rules.

He starts his work using the localbitcoin account and makes transfers in person or through ATM.
 after that, he uses a US-based regulated exchange and his account locked for suspicious activity and then bought $3.29 million in Bitcoin from a platform in Hong Kong.

The important quote in the story is the following:

“Today’s sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions,” said David Shaw, special agent in charge for Homeland Security investigations in San Diego.

Why are there still calls and concerns about money laundering?

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[1Referee]

Why are there still calls and concerns about money laundering?

I don't think there really is, but it's more so that they use that as an excuse to 'legitimize' their actions against those who violate silly laws set up by a bunch of people who we have never met before.

The very fact that large banks have continuously proven to be laundering money for criminals and other wealthy entities just shows how little authorities care. Banks making the same mistake over and over again means that governments can fine them over and over again, and they like this massive income stream, and for banks it's not a problem either, because everything they end up paying in fines is nothing but collateral damage.

Reading the story it seems to me that he was a bit too nonchalant, especially with the amounts being that large. 

[Harlot]

Why are there still calls and concerns about money laundering?

You don't need to do actual money laundering just to be flagged for it. They keyword here is "procedure" and just by operating his business without any kinds of aml procedures is a violation itself, unlike most exchanges now that ask for KYC and other verification process this guy trades out to his clients with no questions ask. You may never know if his clients are doing money laundering themselves that is why he got flagged for such violation. He should even be happy that he will only have a two year sentence for what he did.

[avikz]

Why are there still calls and concerns about money laundering?

I will quote few paragraphs from the article itself which will answer your question,

The first crime:

He plead guilty on October 29, admitting he had operated a Bitcoin exchange without previously registering the business with the Financial Crimes Enforcement Network (FinCen) of the US Department of Treasury. He also admitted he had not implemented the necessary anti-money laundering procedures (AML).

The 2nd crime:

Burrell also admitted he failed to have a “Know Your Customer” program and said he did not perform any due diligence on the source of his client’s
He then exchanged his US cash – stored in Mexico – with Joseph Castillo, a San Diego-based precious metal dealer.

The 3rd Crime:

Burrell also admitted that, between late 2016 and early 2018, he and others imported into the US, on an almost daily basis, a total of over $1 million in amounts slightly under the set $10,000 reporting requirement.

Do you think that a 22 years old is underage to understand these basic requirements to run a business? It was a deliberate attempt to fool the system!

[Lucius]

It is unbelievable that someone can be so stupid in their actions, it's almost 1 billion $ in trading, and he is thinking that it can pass under the radars of financial institutions... Obviously this is a very greedy and not too intelligent person, and in any case deserves a much greater punishment than what is actually received. Maybe after he get out from prison he understands how things work, give the government its piece of the pie, and they will let you keep your part.

[erikalui]

Campos took and received money without even bothering to ask the source and documents and still kept trading huge amounts is so silly. LBC is the worse site to trade as so many have reportedly got cheated while having F2F transactions and some have been cheated because of not knowing how the escrow system works.

[timerland]

Jacob Burrell Campos was sentenced to two years in jail and $823,357 million in illegal profits, due to the pledge of thousands of Bitcoins through an unlicensed money transfer company.
Where he pleaded guilty for running an unregistered platform and thus not subject to anti-money laundering rules.

He starts his work using the localbitcoin account and makes transfers in person or through ATM.
 after that, he uses a US-based regulated exchange and his account locked for suspicious activity and then bought $3.29 million in Bitcoin from a platform in Hong Kong.

The important quote in the story is the following:

“Today’s sentencing of Burrell is a reminder to those illegal and unlicensed money transmitters that the laws and rules apply to crypto currency dealings just as they do to other types of financial transactions,” said David Shaw, special agent in charge for Homeland Security investigations in San Diego.

Why are there still calls and concerns about money laundering?

It's another warning for people that want to set up a p2p trading business that handles large volumes of money. Stick to what the regulations say, and reporting duties need to be upheld. Otherwise, there is always a chance that you will get into trouble.

That said though, it does seem like that law enforcement in certain jurisdictions are a lot more harsher when it comes to bitcoin and its "effects on money laundering", compared to other means of money laundering that may actually have more volume going through them, to the point where even though there may not be any proof of money laundering going on that people are still getting arrested.

But like I said, stick to the laws applicable or there is always a risk at the consequences. It's not the first time that this has happened, in fact there has been multiple instances with Localbitcoins traders alone. High volume transactions are especially prone.

[pushups44]

Localbitcoins is now full of feds waiting to pop people for not complying with money transmitting regulations. I'd suggest people in the U.S. and other countries with strict regulations to avoid the site and deal in regulated exchanges, especially if dealing in large amounts. It's best to just be honest and comply with the laws.

[gentlemand]

Though the regulations sound ridiculously heavy in the US, there should be a private/lightweight tier, it's hard to have any sympathy for this bloke. He could well have been laundering the proceeds of some hideous crimes.

And since it says he was careful to stay under the $10,000 limit it's clear he knew exactly what he was doing.

[Kemarit]

It is unbelievable that someone can be so stupid in their actions, it's almost 1 billion $ in trading, and he is thinking that it can pass under the radars of financial institutions... Obviously this is a very greedy and not too intelligent person, and in any case deserves a much greater punishment than what is actually received. Maybe after he get out from prison he understands how things work, give the government its piece of the pie, and they will let you keep your part.

Yeah, probably combination of both, but remember this is still a kid and having that kind of money when you are young, you don't think of the future, and what we call "one day millionaire". He probably thinks he can go with this kind of money making scheme forever and be under the radar of the government and retire rich as hell in the next 5 years or so. But the full hands of the law caught up with him. Wonder though why two years, and what he gonna do with all the money or bitcoin he stash when he goes out.

[XinXan]

Well, shouldn't have done it illegally, what do people expect? Whether he was a kid or not, if you are doing illegal shit it's your fault. Perhaps 2 years might be a bit too harsh, I don't know.

[fabiorem]

Im still trying to understand what it was "money laundering" in what he did. He traded in LBC, bought and sold coins, made a fortune. Was he involved with drug lords? Was he covering for smugglers? I read he dealed with precious metals, but this is not illegal.

So, can someone point out where he laundered money, and from who? Banks launder money all the time, and when they are caught, there are always some politicians and businessmen involved. How can you know if the guy who is buying bitcoin from you in P2P is not laundering money from drugs? You cant.

[gentlemand]

Im still trying to understand what it was "money laundering" in what he did. He traded in LBC, bought and sold coins, made a fortune. Was he involved with drug lords? Was he covering for smugglers? I read he dealed with precious metals, but this is not illegal.

So, can someone point out where he laundered money, and from who? Banks launder money all the time, and when they are caught, there are always some politicians and businessmen involved. How can you know if the guy who is buying bitcoin from you in P2P is not laundering money from drugs? You cant.

All money laundering is is breaking the link between the source of money and its eventual destination. That's exactly what he was doing as he had no record of the origins of what he was dealing with.

I guess your record keeping is to point law enforcement the right way if they trace it through you. If you're not doing that then they're going to make you culpable.

[vit05]

Im still trying to understand what it was "money laundering" in what he did.

He took money from people he did not know, that He did not know about how they got the money or what kind of business they have. He bought Bitcoins with that money, got 5% and put it in his pocket, and handed the Bitcoins to these people.

He also went the other way. Taking Bitcoins and handing over money.

The main question should be, why did these people pay 5% to Him? That's money laundering. It does not matter whether he knew it or not. But these people who negotiated with him were interested in hiding the sources of their resources.

[magneto]

Im still trying to understand what it was "money laundering" in what he did.

He took money from people he did not know, that He did not know about how they got the money or what kind of business they have. He bought Bitcoins with that money, got 5% and put it in his pocket, and handed the Bitcoins to these people.

He also went the other way. Taking Bitcoins and handing over money.

The main question should be, why did these people pay 5% to Him? That's money laundering. It does not matter whether he knew it or not. But these people who negotiated with him were interested in hiding the sources of their resources.

From what I understand, the 5% was simply the spread. It's quite common for people to be willing to pay that as a fee on Localbitcoins, because of the anonymity that they get through the transaction, as well as the convenience of not having to wait for fiat deposits and a bunch of issues that potentially could arise through using an exchange. That had probably nothing to do with what the case was about.

What made it illegal was that he was dealing with an extremely large sum of money, and with that, keeping no records while smuggling cash (or at least that is what I saw in the article).

I guess this kind of case may be the reason why Localbitcoins have now started to force people into verifying their accounts if they want to open advertisements.

Jacob Burrell Campos was sentenced to two years in jail and $823,357 million in illegal profits, due to the pledge of thousands of Bitcoins through an unlicensed money transfer company.
Where he pleaded guilty for running an unregistered platform and thus not subject to anti-money laundering rules.

Was the "million" a typo? That would be a huge sum of money.

[milewilda]

It is unbelievable that someone can be so stupid in their actions, it's almost 1 billion $ in trading, and he is thinking that it can pass under the radars of financial institutions... Obviously this is a very greedy and not too intelligent person, and in any case deserves a much greater punishment than what is actually received. Maybe after he get out from prison he understands how things work, give the government its piece of the pie, and they will let you keep your part.

Too careless or just simply dont know on how legal things work? with those amounts even involving hundreds of us dollar or even tens will already give you out some headache if you do missed out
the legal part.How much more with these big amounts,? We are talking billion here not just some small amounts.These numbers will surely ring a bell to the government and its just right for him to be
sentenced on the things he do committed. If i do have the money then i would just simply bail out myself if this one has no bail bond. lol

[sheenshane]

Jacod shouldn't be that greedy and would still keep his operation running. I don't know what comes in his mind every day but what he did is definitely traceable and could annoy the authorities and the financial institutions. Since he had enough money to annoy the authority, at that moment he must have at least hire an account and register his operation to the sec so that he should have avoided being sentenced for this.
If he followed the Financial Crimes Enforcement Network (FinCEN) and registered his platform with it, then he should have enjoyed his life as a young rich self-made millionaire.