Man jailed for laundering millions in cryptocurrency

A California man who admitted to operating an unlicensed virtual currency business and laundering millions in bitcoin and cash, has been sentenced to two years in a US federal prison.

Kais Mohammad, 37, of Yorba Linda, pleaded guilty to operating an unlicensed money transmitting business, money laundering and failing to maintain an effective anti-money laundering program in September 2020, according to the US Attorney’s Office, the Orange County Register reported.

Mohammad owned and operated an illegal virtual-currency money services business called Herocoin.

He operated the business from December 2014 to November 2019, and offered bitcoin-cash exchange services, according to a spokesman for the US Attorney’s Office.

He charged commissions of up to 25 per cent, well above the market rate.

Mohammed operated kiosks at various malls, gas stations and convenience stores throughout Southern California.

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Customers could reportedly either buy bitcoin with cash, or sell bitcoin in exchange for cash that would be dispensed through the machines.

The US Attorney’s office said Mohammad knew that some of his clients’ funds came from illegal activity.

The company exchanged between $US15 million ($A19 million) and $US25 million ($A32 million) both in person and at the kiosks.

Mohammad, a former bank employee, knew the rules about having to register his company with the US Treasury Department’s Financial Crimes Enforcement Network.

After choosing not to do that, he eventually did register, but failed to conduct due diligence and report suspicious customers.

As part of the plea agreement, Mohammad forfeited 17 kiosks and an unspecified amount of cash and cryptocurrency, officials said last year.

This article originally appeared on Fox News and was reproduced with permission