Kais Mohammad, Bitcoin Laundering, California 2020

Yorba Linda Man Sentenced to 2 Years in Prison for Bitcoin Laundering

SANTA ANA, California – Kais Mohammad, a.k.a. Superman29, 37, of Yorba Linda, was sentenced today to 24 months in federal prison for operating an illegal virtual-currency money services business that exchanged up to $25 million, some of it on behalf of criminals, through in-person transactions and a network of Bitcoin ATM-type kiosks.

Mohammad pleaded guilty in September 2020 to a three-count criminal information charging him with operating an unlicensed money transmitting business, money laundering, and failing to maintain an effective anti-money laundering program. Mohammad has agreed to forfeit to the government 17 Bitcoin ATMs, $22,820 in cash, 18.4 Bitcoin, and 222.5 Ethereum cryptocurrency.

From December 2014 to November 2019, Mohammad owned and operated Herocoin, an illegal virtual-currency money services business. As part of his business, Mohammad offered Bitcoin-cash exchange services, charging commissions of up to 25 percent – significantly above the prevailing market rate.

Using the moniker Superman29, Mohammad advertised his business online to buy and sell Bitcoin in transactions up to $25,000. In a typical transaction, he met clients at a public location in Southern California and exchanged currency for them. Mohammad generally did not inquire as to the source of the clients' funds and, on certain occasions, he knew the funds were the proceeds of criminal activity. Mohammad knew at least one Herocoin client was engaged in illegal activity on the dark web.

Mohammad processed cryptocurrency deposited into the machines, supplied the machines with cash that customers would withdraw, and maintained the server software that operated the machines. Mohammad was able to monitor transactions on the machines and identify each transaction that occurred on them.

The crime occurred from December 2014 to November 2019. Mohammad was sentenced on today. Mohammad's sentence includes 24 months in federal prison. Mohammad's business handled transactions up to $25,000 and had $25 million in activity. Mohammad agreed to forfeit $22,820 in cash, 18.4 Bitcoin, and 222.5 Ethereum cryptocurrency, as well as 17 Bitcoin ATMs.

Source: https://www.justice.gov/usao-cdca/pr/yorba-linda-man-sentenced-2-years-prison-operating-illegal-atm-network-laundered