Man Sentenced Six Years For Laundering $1M Through Bitcoin

Trung Nguyen, a resident of Danvers, Massachusetts, has been sentenced to six years in prison for operating an unlicensed money transmitting business that converted over $1 million in cash into Bitcoin for scammers and drug dealers. The operation, known as National Vending, functioned as a "no questions asked" service, facilitating the conversion of illicit funds into cryptocurrency over a three-year period from September 2017 to October 2020.

Nguyen's activities involved accepting large sums of cash from individuals involved in criminal activities. Notably, he received $250,000 from a man who identified himself as a meth dealer and $445,000 from victims of romance scams who had been tricked into sending Bitcoin to overseas con artists. In exchange for his services, Nguyen charged a fee for converting the cash into cryptocurrency.

To evade detection, Nguyen employed various tactics to conceal his operations. He misrepresented his business to banks and crypto exchanges, claiming it was a vending machine company. Communication with clients was conducted through encrypted messaging apps, and Bitcoin transactions were obfuscated to make tracking the flow of funds more difficult. Additionally, large cash deposits exceeding $10,000 were broken down into smaller amounts deposited over several days or split between different banks.

Nguyen's efforts to conceal his activities included enrolling in a course to learn how to hide his business. The course instructed him to develop a cover story, create a fictitious list of suppliers, and avoid using the term "Bitcoin." These measures were part of his strategy to avoid scrutiny and maintain the illicit nature of his operations.

Judge Richard G. Sterns ordered Nguyen to forfeit $1.5 million and serve three years of supervised release following his prison term. Acting U.S. Attorney Joshua Levy emphasized the significance of the case, stating that Nguyen's "no questions asked" money laundering operation facilitated the distribution of illegal drugs and the exploitation of vulnerable individuals. Levy's remarks underscored the importance of holding individuals accountable for their role in enabling criminal activities through the use of cryptocurrency.

National Vending lacked the necessary anti-money laundering checks and was not registered with the Financial Crimes Enforcement Network, further highlighting the regulatory gaps that allowed such operations to thrive. The case serves as a stark reminder of the challenges law enforcement faces in combating money laundering and the need for robust regulatory frameworks to prevent the misuse of cryptocurrencies in illicit activities.