Robert M. Faiella, Bitcoin Money Laundering, New York 2013
Robert M. Faiella, a/k/a 'BTCKing,' an underground Bitcoin exchanger, and Charlie Shrem, formerly the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company, both pled guilty today before U.S. District Judge Jed S. Rakoff to operating an unlicensed money transmitting business.
The two men knowingly transmitted money intended to facilitate criminal activity – specifically, drug trafficking on 'Silk Road,' a black-market website designed to enable its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement.
From about December 2011 to October 2013, Faiella ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site's users.
Operating under the username 'BTCKing,' Faiella sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site.
Shrem was the Chief Executive Officer of the Company, and from about August 2011 until about July 2013, when the Company ceased operating, he was also its Compliance Officer, in charge of ensuring the Company's compliance with federal anti-money laundering ('AML') laws.
Working together, Faiella and Shrem exchanged nearly $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road.
Key Facts
- State: New York
- Category: Drug Trafficking|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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