John Khuu, a California man, received an 87-month sentence after he pleaded guilty to conspiracy to commit money laundering. The US DOJ claimed the accused imported counterfeit pharmaceuticals and sold them in the US in exchange for Bitcoin.
US District Judge J. Campbell Barker sentenced John Khuu, a California man, to 87 months in federal prison. The convict was accused of conspiracy to operate an unlicensed money-transmitting business and money laundering.
California man slapped with an 87-month sentence over crypto money laundering conspiracy
John Khuu, a 29-year-old California man, pleaded guilty to operating an unlicensed money-transmitting business. According to court documents, the convict conspired with others to launder the proceeds of his drug trafficking organization.
Khuu was accused of illegally importing counterfeit pharmaceuticals and MDMA pills from Germany. According to Texas police, Khuu sold them to customers within the United States on dark web markets. Customers then paid for the drugs by transferring Bitcoin to the convict’s vendor accounts from their dark web markets customer accounts.
The US DOJ claimed Khuu and his co-conspirators traded Bitcoin for US currency. It added that they transmitted the proceeds through hundreds of transactions and dozens of financial accounts.
The California man was indicted on May 18, 2022, in Texas and charged with conspiracy to commit money laundering. Two months later, the convict was indicted in California and charged with unlawful importation of a Schedule 1 controlled substance. Agents later arrested Khuu under both warrants at his California residence.
The Department of Justice reported that the operation was an effort by the Organised Crime Drug Enforcement Task Forces (OCDETF). It added that OCDETF identified, disrupted, and dismantled criminal organizations threatening the United States. The US Secret Service and Homeland Security Investigations reportedly investigated the cases. The DOJ added that US attorneys D. Ryan Locker, Charles Bisesto, and Nathaniel C. Kummerfeld prosecuted the cases.
The OCDETF leads investigations against multiple crypto-related fraudsters
The operation led to the arrest of 21 individuals in 2022 over their roles in transnational money laundering networks. The accused persons were accused of laundering millions of dollars stolen from United States fraud victims through email compromises, romance scams, and technical support schemes.
US Attorney Brit Featherston commented that the defendants developed schemes to launder fraud proceeds through cryptocurrency. He emphasized that money laundering networks that serviced fraud schemes targeting American citizens would not be tolerated. The attorney added that those operating such networks would be held accountable.
Featherson added that the accused persons played a role by acting as domestic money launderers for foreign co-conspirators that allowed them to target American victims from overseas.
Last month, a man in Montana was also convicted for crypto money laundering as part of the federal agency crackdown. Randall V. Rule was found guilty on all counts after a three-day trial before US District Judge Jeremy D. Kernodle.
Attorney McGlothin commented on the conviction, saying that they would not stand by as their citizens were victimized through financial crimes. He added that he would pursue cases against scammers and against those who facilitate their crimes by laundering the criminal proceeds.
Rule was accused of conspiring with others to launder the proceeds of wire fraud and mail fraud schemes through cryptocurrency. The prosecutors said the defendant converted the funds accumulated through scams into crypto and sent the digital assets to foreign and domestic co-conspirators.
They added that the defendants concealed material facts to prevent discovery of the deposits’ nature. The prosecutors said the defendants labeled the transfers as loan repayments and advertising to prevent the authorities from identifying the fraudulent deposits.
They added that Rule and his co-conspirators had laundered over $2.4 million before their arrest. The accused was also charged with violating the money services business requirements of the Bank Secrecy Act. The Department of Justice said that Rule faces up to twenty years in federal prison upon sentencing.
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