The U.S. Homeland Security has charged a Bothell, Washington man for operating an illegal money exchange business involving bitcoin. US Homeland Security Charges Bothell Man with Crypo Money Laundering.
According to the complaint, 26-year-old Kenneth Rhule, made his initial appearance on the criminal complaint in U.S. District Court in Seattle.
Rhule ran the business under the name of “Gimacut93” at various locations–primarily Starbucks coffee shops. He repeatedly met at these locations with undercover agents posing as criminals who needed to launder funds.
Kenneth Rhule offered to swap bitcoin for cash, obviously realizing that the paper money was the proceeds of criminal activity.
He also gave guidance on the digital currency on how to cover the origins of the funds. Under the “know your customer” law, Rhule did not ask the agents any questions as required.
Rhule operated a marijuana manufacturing business that did not have a license with the State of Washington. He was also charged for this.
It came to light that he was exchanging various marijuana products for cryptocurrency.
He further stated that he was producing in the Seattle area, but sold some of his products in Florida.
As per the law, operating an unlicensed money transmitting business is punishable by up to five years in prison. Conspiracy to produce and sell marijuana involved in this case is punishable by a five-year minimum prison sentence and up to 40 years in jail.
The case is being investigated by Homeland Security Investigations and the Drug Enforcement Administration.