Man Sentenced Six Years For Unlicensed Bitcoin Money Laundering Scheme

Trung Nguyen, a 48-year-old 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. The operation, conducted through National Vending, LLC, facilitated transactions for scammers and a drug dealer over a three-year period from September 2017 to October 2020. Nguyen received a fee for his services, which included converting $250,000 in cash from a self-proclaimed meth dealer and $445,000 from victims of romance scams who were tricked into sending Bitcoin to overseas con artists.

Nguyen's operation lacked the necessary anti-money laundering checks and was not registered with the Financial Crimes Enforcement Network (FinCEN). Federal law treats virtual currency exchangers as money transmitters and requires them to register with FinCEN. The company did not register as a money services business and it also did not file required reports for transactions that exceeded $10,000. Nguyen was aware of receiving illegal funds and helped facilitate crime, according to Acting U.S. Attorney Joshua S. Levy.

To evade detection, Nguyen used encrypted messaging apps to communicate with clients and obfuscated Bitcoin transactions to make tracking the flow of funds more difficult. For larger cash deposits exceeding $10,000, Nguyen would break down the funds into smaller amounts over several days or distribute them across multiple banks. He even enrolled in a course to learn how to conceal his business activities, which included developing a cover story, creating a fictitious list of suppliers, and avoiding the use of the term "Bitcoin."

Judge Richard G. Stearns ordered Nguyen to forfeit $1.5 million and serve an additional three years of supervised release following his prison term. The sentencing order from Judge Richard G. Stearns calls for five years in prison, three years on supervised release and forfeiture of $1,513,000.04. Nguyen’s trial, called DCS420, was completed in five days before he was found guilty in November 2024. The jury found that the defendant had committed one crime of unlicensed money business and another of money laundering. On the money fraud accusation, he was acquitted. According to Assistant U.S. Attorneys Seth B. Kosto and Benjamin A. Saltzman, Nguyen intentionally violated federal regulations.

The scheme was revealed by an investigation carried out by Homeland Security Investigations, the IRS Criminal Investigation and the U.S. Postal Inspection Service. The probe revealed that Nguyen knowingly handled money from drug dealers and scam victims on behalf of his clients involved in criminal acts. The government’s actions against Nguyen further prove its commitment to stopping cryptocurrency crimes. The Department of Justice is actively targeting services that transfer funds illegally, many of which connect to fraud and drug trafficking. Recently, a man laundered over $1 million in fraud funds using a similar method and received a prison sentence.