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California man who used bitcoin to launder $13 million given 3-year jail sentence

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Bitcoin and USD
The case was under investigation by the IRS and Department of Homeland Security.NurPhoto
  • Hugo Mejia, 50, was sentenced to three years in prison for operating an unlicensed money exchange.

  • Mejia exchanged $13 million in bitcoin and cash, laundering money connected to drug trafficking.

  • Caught in a sting operation, he pleaded guilty, according to a US Attorney's Office press release.

Hugo Mejia, a 50-year-old California man, has been jailed for three years after setting up an unlicensed cryptocurrency exchange business.

The firm exchanged at least $13 million in bitcoin and cash, often for drug traffickers, the US Attorney's Office said.

The crimes occurred between May 2018 and September 2020.

AP News reported that Mejia was sentenced to three years in prison on Thursday after pleading guilty in July to operating an unlicensed money transmitting business and money laundering.

Mejia, who lived in San Bernardino County, admitted to establishing multiple businesses, including one called "The HODL Group LLC," in an attempt to hide his identity and activity.

He also failed to register his company with the Financial Crimes Enforcement Network, a bureau in the Treasury Department that tackles such crimes. Last year, the bureau's work was under the spotlight after leaked documents were shared with news outlets.

Mejia's case was under investigation by the IRS and Department of Homeland Security, in collaboration with Costa Mesa Police Department.

The Attorney's Office press release stated that a client who was working with law enforcement met Mejia multiple times between May 2019 and March 2020 to exchange bitcoin for cash.

On March 12, 2020, the client met Mejia in a coffee shop and exchanged $82,150 in cash for the equivalent bitcoin. During this exchange, the client made clear he worked with an Australian drug dealer.

The client who was working for law enforcement and Mejia conducted more than $250,000 worth of bitcoin and cash exchanges over five meetings.

As part of his plea agreement, Mejia forfeited $233,987 in cash seized from California residences, silver coins, and bars, as well as nearly $100,000 in various cryptocurrencies.

Read the original article on Business Insider