US authorities have sentenced California resident Hugo Sergio Mejia to 3 years in jail for operating an unlicensed Bitcoin exchange business. Through this business, Mejia exchanged over $13 million in Bitcoin and cash, frequently doing so for drug traffickers. In July 2021, Mejia had pleaded guilty to money laundering as well as operating an unlicensed money transmitting business.
During 2018-2020, Mejia’s money transmitting business converted Bitcoin to cash and vice versa. He charged commissions for conducting these transactions. However, Mejia did not register this business with the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). He even set up at least 3 companies to conceal his identity. The illicit business flourished through online advertising and word of mouth. Mejia communicated with his clients through encrypted messaging services and met them in coffee shops.
As part of his plea agreement, Mejia will forfeit all illicitly-derived assets. This includes the $233,987 cash that authorities seized from his residences, as well as cryptocurrency worth nearly $95,587.
Source: US Department of Justice