NEW ORLEANS, LA – Michael Yusko, III, 47, of New Orleans, is headed to federal prison after being sentenced today for running a shadow Bitcoin operation and ripping off his customers. U.S. District Judge Barry W. Ashe slapped Yusko with one year and one day behind bars for operating an unlicensed money transmitting business, a violation of 18 U.S.C. § 1960.
The scheme began unraveling in May 2018 when the FBI and U.S. Secret Service started receiving complaints. Victims alleged Yusko promised to sell them Bitcoin and other cryptocurrencies, taking their U.S. dollars but failing to deliver the digital assets. Yusko advertised a five percent markup over market price, a hefty fee for a service he often didn’t provide. Funds were funneled into a network of shell companies, including Nervous Light Capital LLC, Ready Demolition LLC, Patriot Concrete Pumping, LLC, Praetorian Energy, LLC, and Hudson Oak Partners LLC.
Crucially, Yusko never bothered to register any of these entities as money transmitting businesses with the Financial Crimes Enforcement Network (FinCEN), blatantly flouting federal regulations outlined in Title 31, United States Code, Section 5330. He also actively instructed clients to conceal the purpose of their wire transfers from bank employees – a tactic designed to evade detection, given banks’ well-known tendency to shutter accounts linked to cryptocurrency sales. Yusko had previously had accounts shut down for this very reason.
Court documents paint a picture of a slick operator who lured in customers with promises of quick Bitcoin purchases. While some transactions went through, many didn’t. Yusko pocketed tens of thousands of dollars, leaving victims empty-handed and without recourse. He ultimately admitted to causing $201,399.00 in losses to those he defrauded, a figure the court later increased.
Judge Ashe didn’t just hand down a prison sentence. In addition to the one year and one day of incarceration, Yusko will serve three years of supervised release and pay a $100 special assessment fee. More significantly, the judge ordered Yusko to make full restitution to his victims, totaling a staggering $411,009.00. The U.S. Attorney’s Office hopes this will provide some measure of relief to those swindled by Yusko’s operation.
U.S. Attorney Duane A. Evans praised the collaborative work of the FBI New Orleans Field Office and the U.S. Secret Service New Orleans Field Office in bringing Yusko to justice. Assistant United States Attorney Matthew R. Payne led the prosecution, highlighting the increasing focus on cracking down on illicit cryptocurrency schemes. This case serves as a stark reminder that operating outside the law, even in the rapidly evolving world of digital finance, carries serious consequences.
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Key Facts
- Agency: U.S. Secret Service
- Category: Fraud & Financial Crimes
- Source: Official Press Release
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