Ontario Man Who Ran Multimillion-Dollar Unlicensed Bitcoin Exchange Business Sentenced to 3 Years in Federal Prison
2021-11-18 · Press release
Summary: A San Bernardino County man was sentenced today to 36 months in federal prison for operating an unlicensed business that exchanged at least $13 million in Bitcoin and cash, often for drug traffickers.
SANTA ANA, California – A San Bernardino County man was sentenced today to 36 months in federal prison for operating an unlicensed business that exchanged at least $13 million in Bitcoin and cash, often for drug traffickers.
Hugo Sergio Mejia, 50, of Ontario, was sentenced by United States District Judge Cormac J. Carney. Mejia pleaded guilty on July 1 to one count of operating an unlicensed money transmitting business and one count of money laundering.
From May 2018 to September 2020, Mejia operated a virtual currency business that exchanged Bitcoin for cash, and vice versa, charging commissions for these transactions. Mejia never registered his business with the Financial Crimes Enforcement Network, a bureau with the United States Department of the Treasury that collects and analyzes information to combat financial crimes, including money laundering.
During the nearly 2½-year period, according to the plea agreement, Mejia exchanged at least $13 million.
Mejia also established companies to mask his true activity, including Worldwide Secure Communications LLC, World Secure Data, and The HODL Group LLC. Mejia advertised his business online and was referred to customers by word of mouth, communicating with them via encrypted messaging services and meeting them in person at coffee shops.
On several occasions between May 2019 and March 2020, Mejia met with a client, who was working with law enforcement, to exchange Bitcoin for tens of thousands of dollars in cash. On March 12, 2020, Mejia met with the client at a coffee shop in Irvine and facilitated the exchange of 14.273 Bitcoin for $82,150 in cash plus fees. During this meeting, the client informed Mejia that his primary customer was a methamphetamine buyer in Australia who purchased methamphetamine every four to six weeks and sold it in Australia for five times more than the average price in the United States.
Mejia and the client who was working with law enforcement conducted five Bitcoin-cash transactions that cumulatively exceeded $250,000.
“[Mejia] knew about the applicable regulations governing his money exchange business and purposefully flouted them,” prosecutors wrote in a sentencing memorandum. “That is because [Mejia] structured his money exchange business with the intent to establish an anonymous conduit for money laundering of drug trafficking proceeds.”
As part of his plea agreement with the government, Mejia agreed to forfeit all assets derived from the illegal conduct, including $233,987 in cash seized from residences in Santa Ana and Ontario, silver coins and bars, and approximately $95,587 in various cryptocurrency seized.
IRS Criminal Investigation and Homeland Security Investigations investigated this matter and received assistance from the Costa Mesa Police Department.
Assistant United States Attorney Jason C. Pang of the International Narcotics, Money Laundering and Racketeering Section prosecuted this case. Assistant United States Attorney Brett A. Whittlesey of the Asset Forfeiture Section handled the asset forfeiture portion of this case.
- district_office
- Central District of California
- usa_name
- event_type
- sentencing
- judge_name
- Cormac J. Carney
- judge_title
- United States District Judge
- case_number
- max_penalty_text
- sentence_summary
- 36 months in federal prison
- money_amounts
- $13 million, $82,150, $233,987, $95,587
- crypto_assets
- BTC
- statutes_json
- timeline_json
- press_release_url
- https://www.justice.gov/usao-cdca/pr/ontario-man-who-ran-multimillion-dollar-unlicensed-bitcoin-exchange-business-sentenced
- extras_json
| participant_id | name | role | title | organization | location | age | nationality | status |
|---|---|---|---|---|---|---|---|---|
| 1820 | Hugo Sergio Mejia | defendant | Ontario, California | 50 | sentenced | |||
| 1821 | Cormac J. Carney | judge | United States District Judge | U.S. District Court | Santa Ana, California | |||
| 1822 | Jason C. Pang | prosecutor | Assistant United States Attorney | U.S. Attorney's Office | Santa Ana, California | |||
| 1823 | Brett A. Whittlesey | prosecutor | Assistant United States Attorney | U.S. Attorney's Office | Santa Ana, California |
| agency_id | agency_name | abbreviation | role | office_location | agents_mentioned | contribution |
|---|---|---|---|---|---|---|
| 1140 | IRS Criminal Investigation | IRS CI | investigation | led the investigation into Mejia's illegal Bitcoin exchange operations | ||
| 1141 | Homeland Security Investigations | HSI | investigation | assisted in investigating the case | ||
| 1142 | Costa Mesa Police Department | assistance | Costa Mesa, California | provided assistance in the investigation | ||
| 1143 | United States Attorney's Office | USAO | prosecution | Santa Ana, California | Jason C. Pang, Brett A. Whittlesey | prosecuted the case and handled asset forfeiture proceedings |
| charge_id | charge_description | statute | severity | max_penalty | fine_amount | defendant | status | participant_id | cl_docket_id | count_num | is_1960 | verified_1960 | source | updated_at |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 937 | money laundering | Hugo Sergio Mejia | pleaded guilty | 0 | enrichment | |||||||||
| 936 | operating an unlicensed money transmitting business | Hugo Sergio Mejia | pleaded guilty | 1 | enrichment | 2026-09-16T19:45:57+00:00 | ||||||||
| 2871 | operating an unlicensed money transmitting business and one count of money laundering | 1 | press | 2026-09-16T19:45:57+00:00 | ||||||||||
| 2872 | unlicensed money transmitting business and one count of money laundering | 1 | press | 2026-09-16T19:45:57+00:00 |
| fin_id | action_type | amount | currency | description | asset_type | defendant | status |
|---|---|---|---|---|---|---|---|
| 350 | forfeiture | $233,987 | USD | cash seized from residences in Santa Ana and Ontario | cash | Hugo Sergio Mejia | ordered |
| 351 | forfeiture | silver coins and bars | property | Hugo Sergio Mejia | ordered | ||
| 352 | forfeiture | $95,587 | USD | various cryptocurrency seized | cryptocurrency | Hugo Sergio Mejia | ordered |
| victim_id | victim_type | description | number_affected | loss_amount | geographic_scope | vulnerability_factors | impact_description |
|---|---|---|---|---|---|---|---|
| 273 | government | Financial regulatory system | International (including Australia) | Facilitated money laundering for drug trafficking proceeds through unlicensed operations | |||
| 274 | individual | Methamphetamine buyers/sellers in Australia | Australia | Enabled illicit drug trafficking operations through anonymous cryptocurrency exchanges |
| quote_id | quote_text | speaker_name | speaker_title | speaker_organization | quote_type | context | significance |
|---|---|---|---|---|---|---|---|
| 952 | That is because [Mejia] structured his money exchange business with the intent to establish an anonymous conduit for money laundering of drug trafficking proceeds. | null | null | null | statement | Prosecutors' sentencing memorandum | Explains Mejia's motive for operating an unlicensed business |
| theme_id | theme_name | description | significance | related_statutes | geographic_scope | temporal_aspects | stakeholders |
|---|---|---|---|---|---|---|---|
| 1156 | Unlicensed Money Transmitting | Operating an unlicensed business exchanging Bitcoin and cash without registering with FinCEN. | Violated federal regulations, enabling illegal financial activities. | 18 U.S.C. § 1960 | National | 2018–2020 | FinCEN, Law enforcement, Financial institutions |
| 1157 | Money Laundering | Facilitating transactions for drug trafficking proceeds, including a methamphetamine buyer in Australia. | Core criminal activity linking cryptocurrency exchanges to drug trade profits. | 18 U.S.C. § 1956 | International | 2018–2020 | Drug traffickers, Law enforcement, Victims |
| 1158 | Cryptocurrency Use | Utilizing Bitcoin to exchange cash anonymously, evading regulatory oversight. | Enabled illicit financial anonymity and cross-border transactions. | null | International | 2018–2020 | Cryptocurrency users, Law enforcement |
| 1159 | Asset Forfeiture | Seizure of $233,987 in cash, cryptocurrency, and physical assets from illegal proceeds. | Disrupts criminal financial networks and recovers illicit gains. | 18 U.S.C. § 981, 982 | National | Post-conviction | U.S. Government, Asset Forfeiture Section, Victims |
| 1160 | International Cooperation | Involvement of an Australian methamphetamine buyer and collaboration with international law enforcement. | Highlights transnational criminal networks and cooperative investigations. | null | International | 2018–2020 | International law enforcement, Drug enforcement agencies |
| 1161 | Law Enforcement Collaboration | Joint investigation by IRS Criminal Investigation and Homeland Security Investigations, assisted by Costa Mesa Police. | Demonstrates multi-agency coordination to combat financial crimes. | null | National | 2018–2020 | IRS CI, HSI, Local law enforcement |
CourtListener / RECAP
Linked dockets
- CL #58958649 8:21-cr-00008 (cacd)
Documents
| Entry | Description | OCR | Download |
|---|---|---|---|
| #76 desc | ORDER DENYING DEFENDANT'S EMERGENCY RENEWED MOTION FOR SENTENCE REDUCTION PURSUANT TO 18 U.S.C. Sec. 3582(c)(1)(A) [Dkt. 74] by Judge Cormac J. Carney as to Hugo Sergio Mejia (1): For the foregoing reasons, Mejia's motion for compassionate release is DENIED. (see document for further information) (bm) (Entered: 08/11/2023) | none | none |
| #75 desc | OPPOSITION to NOTICE OF MOTION AND MOTION to Reduce Sentence pursuant to Compassionate Release 74 (Attachments: # 1 Exhibit A - Community Based Program Agreement between BOP and defendant)(Pang, Jason) (Entered: 07/31/2023) | none | none |
| #74 desc | EMERGENCY RENEWED MOTION to Reduce Sentence pursuant to Compassionate Release Filed by Defendant Hugo Sergio Mejia. (rolm) (Entered: 07/28/2023) | none | none |
| #73 desc | ORDER DENYING DEFENDANTS MOTION TO MODIFY IMPOSITION OF SENTENCE UNDER 18 U.S.C. §3582(c)(1)(A) [Dkt. 45; Dkt. 48] by Judge Cormac J. Carney as to Defendant Hugo Sergio Mejia 45, 48 . (twdb) (Entered: 03/21/2023) | none | none |
| #72 desc | REPLY to Government's opposition to MOTION to Reduce Sentence pursuant to Compassionate Release 48 filed by Defendant Hugo Mejia. (twdb) (Entered: 11/21/2022) | none | none |
| #71 desc | SEALED - GOVERNMENT'S STATUS UPDATE (bm) (Entered: 11/16/2022) | none | none |
| #67 desc | SEALED DOCUMENT - UNDER SEAL DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #68 desc | SEALED - ORDER SEALING DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #69 desc | SEALED - GOVERNMENT'S EX PARTE APPLICATION TO CONTINUE DEADLINE FOR STATUS UPDATE TO NOVEMBER 11, 2022 AND ORDER SEALING DOCUMENTS; DECLARATION OF JASON C. PANG (bm) (Entered: 11/16/2022) | none | none |
| #70 desc | SEALED - ORDER SEALING DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #66 desc | AMENDED DOCUMENT filed by Plaintiff USA as to Defendant Hugo Sergio Mejia RE: Notice of Manual Filing (G-92) 65 . (Pang, Jason) (Entered: 11/15/2022) | none | none |
| #65 desc | NOTICE of Manual Filing of Under Seal Application; PO filed by Plaintiff USA as to Defendant Hugo Sergio Mejia (Pang, Jason) (Entered: 11/14/2022) | none | none |
| #64 desc | STATUS REPORT filed by Plaintiff USA as to Defendant Hugo Sergio Mejia, re Order on Motion to Reduce Sentence pursuant to Compassionate Release,,, 59, EX PARTE APPLICATION for Order for EX PARTE APPLICATION TO SEAL as to Defendant Hugo Sergio Mejia. 61 . (Pang, Jason) (Entered: 10/31/2022) | none | none |
| #63 desc | PROOF OF SERVICE filed by Plaintiff USA as to Defendant Hugo Sergio Mejia re Order on Motion for Order, Order on Motion to Seal Document 62, EX PARTE APPLICATION for Order for EX PARTE APPLICATION TO SEAL as to Defendant Hugo Sergio Mejia. 61, (Pang, Jason) (Entered: 10/25/2022) | none | none |
| #61 desc | SEALED GOVERNMENT'S EX PARTE APPLICATION TO CONTINUE DEADLINE FOR STATUS UPDATE TO NOVEMBER 11, 2022 AND ORDER SEALING DOCUMENTS; DECLARATION OF JASON C. PANG (lom) (Entered: 10/21/2022) | none | none |
| #62 desc | SEALED ORDER SEALING DOCUMENT (lom) (Entered: 10/21/2022) | none | none |
| #60 desc | NOTICE of Manual Filing of Ex Parte Application, Proposed Order filed by Plaintiff USA as to Defendant Hugo Sergio Mejia (Pang, Jason) (Entered: 10/20/2022) | none | none |
| #59 desc | MINUTES (IN CHAMBERS) by Judge Cormac J. Carney: ORDER DENYING EMERGENCY HEARING (Dkt. 45 ; Dkt. 48 ), 45, 48 as to Hugo Sergio Mejia (1). The Court hereby ORDERS the parties to submit a joint status update no later than 10/31/22, on whether Majia has attended an ophthalmologist appointment and any diagnosis, treatment, or other information concerning Mejia's eye condition arising out of or related to that appointment. (twdb) (Entered: 10/20/2022) | none | none |
| #56 desc | SEALED GOVERNMENT'S OPPOSITION (lom) (Entered: 10/18/2022) | none | none |
| #57 desc | SEALED GOVERNMENT'S OPPOSITION, EXHIBIT A (lom) (Entered: 10/18/2022) | none | none |
| #57 desc | SEALED GOVERNMENT'S OPPOSITION, EXHIBIT A (lom) (Entered: 10/18/2022) | none | none |
| #56 desc | SEALED GOVERNMENT'S OPPOSITION (lom) (Entered: 10/18/2022) | none | none |
| #59 | MINUTES (IN CHAMBERS) by Judge Cormac J. Carney: ORDER DENYING EMERGENCY HEARING (Dkt. 45 ; Dkt. 48 ), 45, 48 as to Hugo Sergio Mejia (1). The Court hereby ORDERS the parties to submit a joint status update no later than 10/31/22, on whether Majia has attended an ophthalmologist appointment and any diagnosis, treatment, or other information concerning Mejia's eye condition arising out of or related to that appointment. (twdb) (Entered: 10/20/2022) | none | done |
| #60 | NOTICE of Manual Filing of Ex Parte Application, Proposed Order filed by Plaintiff USA as to Defendant Hugo Sergio Mejia (Pang, Jason) (Entered: 10/20/2022) | none | done |
| #62 desc | SEALED ORDER SEALING DOCUMENT (lom) (Entered: 10/21/2022) | none | none |
| #61 desc | SEALED GOVERNMENT'S EX PARTE APPLICATION TO CONTINUE DEADLINE FOR STATUS UPDATE TO NOVEMBER 11, 2022 AND ORDER SEALING DOCUMENTS; DECLARATION OF JASON C. PANG (lom) (Entered: 10/21/2022) | none | none |
| #63 | PROOF OF SERVICE filed by Plaintiff USA as to Defendant Hugo Sergio Mejia re Order on Motion for Order, Order on Motion to Seal Document 62, EX PARTE APPLICATION for Order for EX PARTE APPLICATION TO SEAL as to Defendant Hugo Sergio Mejia. 61, (Pang, Jason) (Entered: 10/25/2022) | none | done |
| #64 | STATUS REPORT filed by Plaintiff USA as to Defendant Hugo Sergio Mejia, re Order on Motion to Reduce Sentence pursuant to Compassionate Release,,, 59, EX PARTE APPLICATION for Order for EX PARTE APPLICATION TO SEAL as to Defendant Hugo Sergio Mejia. 61 . (Pang, Jason) (Entered: 10/31/2022) | none | done |
| #65 | NOTICE of Manual Filing of Under Seal Application; PO filed by Plaintiff USA as to Defendant Hugo Sergio Mejia (Pang, Jason) (Entered: 11/14/2022) | none | done |
| #66 | AMENDED DOCUMENT filed by Plaintiff USA as to Defendant Hugo Sergio Mejia RE: Notice of Manual Filing (G-92) 65 . (Pang, Jason) (Entered: 11/15/2022) | none | done |
| #70 desc | SEALED - ORDER SEALING DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #69 desc | SEALED - GOVERNMENT'S EX PARTE APPLICATION TO CONTINUE DEADLINE FOR STATUS UPDATE TO NOVEMBER 11, 2022 AND ORDER SEALING DOCUMENTS; DECLARATION OF JASON C. PANG (bm) (Entered: 11/16/2022) | none | none |
| #68 desc | SEALED - ORDER SEALING DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #67 desc | SEALED DOCUMENT - UNDER SEAL DOCUMENT (bm) (Entered: 11/16/2022) | none | none |
| #71 desc | SEALED - GOVERNMENT'S STATUS UPDATE (bm) (Entered: 11/16/2022) | none | none |
| #72 | REPLY to Government's opposition to MOTION to Reduce Sentence pursuant to Compassionate Release 48 filed by Defendant Hugo Mejia. (twdb) (Entered: 11/21/2022) | none | done |
| #73 | ORDER DENYING DEFENDANTS MOTION TO MODIFY IMPOSITION OF SENTENCE UNDER 18 U.S.C. §3582(c)(1)(A) [Dkt. 45; Dkt. 48] by Judge Cormac J. Carney as to Defendant Hugo Sergio Mejia 45, 48 . (twdb) (Entered: 03/21/2023) | none | done |
| #74 | EMERGENCY RENEWED MOTION to Reduce Sentence pursuant to Compassionate Release Filed by Defendant Hugo Sergio Mejia. (rolm) (Entered: 07/28/2023) | none | done |
| #75 | OPPOSITION to NOTICE OF MOTION AND MOTION to Reduce Sentence pursuant to Compassionate Release 74 (Attachments: # 1 Exhibit A - Community Based Program Agreement between BOP and defendant)(Pang, Jason) (Entered: 07/31/2023) | none | done |
| #76 | ORDER DENYING DEFENDANT'S EMERGENCY RENEWED MOTION FOR SENTENCE REDUCTION PURSUANT TO 18 U.S.C. Sec. 3582(c)(1)(A) [Dkt. 74] by Judge Cormac J. Carney as to Hugo Sergio Mejia (1): For the foregoing reasons, Mejia's motion for compassionate release is DENIED. (see document for further information) (bm) (Entered: 08/11/2023) | none | done |
| #75 | OPPOSITION to NOTICE OF MOTION AND MOTION to Reduce Sentence pursuant to Compassionate Release 74 (Attachments: # 1 Exhibit A - Community Based Program Agreement between BOP and defendant)(Pang, Jason) (Entered: 07/31/2023) | none | done |
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