Bitcoin Dealer Indicted on Money Laundering Charges; Held without Bond

Assistant U. S. Attorney Robert Ciaffa (619) 546-7748    

SAN DIEGO – Jacob Burrell Campos, a 21-year-old Bitcoin dealer, was ordered held without bail today in connection with a 31-count indictment charging him with operating an illegal money transmitting business, failing to maintain an anti-money laundering program, international money laundering and conspiracy to structure monetary transactions. Burrell was arrested on August 13 as he tried to enter the United States from Mexico at the Otay Mesa Port of Entry.

According to statements made in court by Assistant U.S. Attorney Robert Ciaffa during today’s bond hearing, Burrell was a prolific Bitcoin dealer who sold approximately $750,000 worth of Bitcoin to hundreds of buyers throughout the United States. He conducted 971 separate transactions with over 900 individual customers, and accepted cash in person, through his bank accounts, and through MoneyGram.  AUSA Ciaffa told the court today that Burrell operated as a Bitcoin “exchanger,” and his activities constituted a “money transmitting business.”  As such, he was required to register with the Department of Treasury, and comply with all anti-money laundering requirements, including reporting suspicious cash transactions.  In this case, Burrell accepted cash “with no questions asked,” and in return for a 5% fee, supplied hundreds of individuals with an easy outlet to avoid the anti-money laundering laws applicable to all financial institutions, including licensed and registered Bitcoin exchanges.  According to AUSA Ciaffa, Burrell’s activities “blew a giant hole” through the legal framework of U.S. anti-money laundering laws by soliciting and introducing into the U.S. banking system close to $1 million in unregulated cash.    

Burrell is also charged with 28 counts of international money laundering. According to the indictment, Burrell sent 28 wire transfers totaling over $900,000 from his bank accounts in the United States to a bank account in Taiwan in the name of Bitfinex. Bitfinex is a crypto-currency exchange located in Hong Kong.  According to AUSA Ciaffa, Burrell sent the money from the United States to buy Bitcoin and fund his business. With these and other funds, Burrell bought over $3 million worth of Bitcoin in over 2,600 transactions.  Burrell resorted to buying Bitcoin through Bitfinex after his account was closed by Coinbase, a U.S.-based Bitcoin exchange, for circumventing its ID verification process.

The indictment also charges Burrell with conspiracy to structure the importation of monetary instruments.  According to statements made by AUSA Ciaffa in court today, Burrell agreed with others to smuggle over $1 million in U.S. dollars into the United States from Mexico, in amounts slightly less than $10,000, in order to avoid the currency reporting requirements. 

U.S. Magistrate Judge Karen S. Crawford found that Burrell had significant ties to Mexico, citizenship in three countries, no steady employment in the United States, the ability to access large sums of cash, and a disdain and unwillingness to comply with U.S. laws. She concluded that Burrell posed a substantial risk of flight, and ordered him held without bail.    

Burrell was born in San Diego, and lives in Rosarito, Baja California.   

DEFENDANT                                               Case Number 18CR3554-H

Jacob Burrell-Campos                                     Age: 21                       Rosarito, Baja California, Mexico

SUMMARY OF CHARGES

Count 1:  Conducting an unlicensed money transmitting business, in violation of 18 USC 1960.

Statutory maximum:  Five years in prison, $250,000 fine.

Count 2:  Failing to maintain an anti-money laundering program, in violation of 18 USC 5318(h), 5322(b)

Statutory maximum: Ten years in prison, $500,000 fine.

Counts 3-30:  International money laundering, in violation of 18 USC 1956(a)(2).

Statutory maximum: Twenty years in prison for each count, $500,000 fine.

Count 31:  Conspiracy to structure international instrument transactions, in violation of 18 USC 371 and 31 USC 5324(c)(3)

Statutory maximum: Five years in prison, $250,000 fine.

AGENCIES

Homeland Security Investigations

Internal Revenue Service

Postal Inspection Service

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.