Rochester Bitcoin Smuggler Pleads Guilty to Fraud

Acting U.S. Attorney James P. Kennedy, Jr., revealed today that Richard Petix, a 32-year-old Rochester native, has pleaded guilty to making material false statements and operating an unlicensed money transmitting business in connection with Bitcoin transactions. The charges carry a sentence of up to five years in prison.

Petix, who was already on supervised release following a 2009 child pornography conviction, lied to federal probation officers about his ownership and use of a laptop and smartphone. He transferred approximately $13,000 in Bitcoin to an undercover agent without complying with federal money transmitting business registration requirements.

Between August 2014 and December 3, 2015, Petix conducted over 100 Bitcoin transactions worth more than $200,000, some of which were used by customers to purchase controlled substances from dark net vendors. Despite his supervision conditions, he failed to notify authorities of his computer usage or consent to examinations.

Investigation into Petix’s activities was led by Immigration and Customs Enforcement and the United States Postal Inspection Service. Sentencing is set for August 14, 2017.

Petix had been scheduled to go to trial on May 1, 2017, but his plea deal averts a court appearance. Assistant U.S. Attorney Wei Xiang handled the case, and U.S. District Judge Charles J. Siragusa will preside over the sentencing hearing.