Rochester Man Pleads Guilty In Case Involving Bit Coins
2017-04-27 · Press release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-Acting U.S. Attorney James P. Kennedy, Jr. announced today that Richard Petix, 32, of Rochester, NY, pleaded guilty to making material false statements and operating an unlicensed money transmitting business, before U.S. District Judge Charles J. Siragusa. The charges carry a maximum penalty of five years in prison.
Assistant U.S. Attorney Wei Xiang, who is handling the case, stated that Petix lied to federal probation officers and law enforcement agents about his ownership and use of a laptop computer and a smartphone. The defendant is on a term of supervised release following a 2009 conviction for knowingly transporting child pornography in interstate commerce. As a condition of that supervision, Petix was required to notify his probation officer of any computers he used and, as triggered by impermissible or suspicious activity, consent to examinations of such computers. As of October 20, 2015, the defendant told his probation officer that he did not use any computers or the Internet.
On December 3, 2015, Petix conducted a Bitcoin transaction with an undercover federal agent at a business in Buffalo, NY. Using his laptop computer and smartphone, the defendant transferred approximately $13,000 in the form of 37 bitcoins to an address specified by the agent. When confronted by federal probation officers at the scene, however, Petix claimed that the laptop and smartphone were not his and that he could not access them.
Between August, 2014, and December 3, 2015, Petix conducted over 100 Bitcoin transactions wherein he transferred over $200,000 in bitcoins to customers both locally and across the United States. At least some of these customers then used the bitcoins to purchase controlled substances from dark net vendors. At no time during this period did Petix comply with federal money transmitting business registration requirements.
Petix was scheduled to go to trial on May 1, 2017.
The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Acting Special Agent-in-Charge Kevin Kelly, and the United States Postal Inspection Service, under the direction of Inspector-in-Charge Shelly Binkowski.
Sentencing is scheduled August 14, 2017, at 9:15 a.m. before Judge Siragusa.
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- https://www.justice.gov/usao-wdny/pr/rochester-man-pleads-guilty-case-involving-bit-coins
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| participant_id | name | role | title | organization | location | age | nationality | status |
|---|---|---|---|---|---|---|---|---|
| 2470 | James P. Kennedy, Jr. | prosecutor | Acting U.S. Attorney | U.S. Attorney's Office | Buffalo, NY | |||
| 2471 | Richard Petix | defendant | Rochester, NY | 32 | pleaded guilty | |||
| 2472 | Charles J. Siragusa | judge | U.S. District Judge | U.S. District Court | Buffalo, NY | |||
| 2473 | Wei Xiang | prosecutor | Assistant U.S. Attorney | U.S. Attorney's Office | Buffalo, NY | |||
| 2474 | Kevin Kelly | investigator | Acting Special Agent-in-Charge | Homeland Security Investigations (HSI) | ||||
| 2475 | Shelly Binkowski | investigator | Inspector-in-Charge | United States Postal Inspection Service |
| agency_id | agency_name | abbreviation | role | office_location | agents_mentioned | contribution |
|---|---|---|---|---|---|---|
| 1570 | U.S. Attorney's Office | USAO | prosecution | Buffalo, NY | Wei Xiang | Handling the case and prosecution |
| 1571 | Immigration and Customs Enforcement, Homeland Security Investigations | HSI | investigation | Kevin Kelly | Led the investigation | |
| 1572 | United States Postal Inspection Service | USPIS | investigation | Shelly Binkowski | Contributed to the investigation |
| 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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1276 | Making material false statements | 18 U.S.C. § 1001 | five years in prison | Richard Petix | pleaded guilty | 0 | enrichment | |||||||
| 1277 | Operating an unlicensed money transmitting business | 18 U.S.C. § 1960 | five years in prison | Richard Petix | pleaded guilty | 1 | enrichment | 2026-09-16T19:45:59+00:00 | ||||||
| 3371 | operating an unlicensed money transmitting business, before U | 1 | press | 2026-09-16T19:45:59+00:00 | ||||||||||
| 3372 | unlicensed money transmitting business, before U | 1 | press | 2026-09-16T19:45:59+00:00 |
| fin_id | action_type | amount | currency | description | asset_type | defendant | status |
|---|---|---|---|---|---|---|---|
| 1232 | seizure | $13,000 | USD | Bitcoin transaction | cryptocurrency | Richard Petix | completed |
| 1233 | seizure | $200,000 | USD | Bitcoin transactions | cryptocurrency | Richard Petix | completed |
| victim_id | victim_type | description | number_affected | loss_amount | geographic_scope | vulnerability_factors | impact_description |
|---|---|---|---|---|---|---|---|
| 625 | individual | customers | $200,000 | United States | used the bitcoins to purchase controlled substances from dark net vendors |
| quote_id | quote_text | speaker_name | speaker_title | speaker_organization | quote_type | context | significance |
|---|---|---|---|---|---|---|---|
| 2512 | Petix lied to federal probation officers and law enforcement agents about his ownership and use of a laptop computer and a smartphone. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Explaining the charges against Petix | Highlights the defendant's deception and violation of supervised release conditions |
| 2513 | Petix was required to notify his probation officer of any computers he used and, as triggered by impermissible or suspicious activity, consent to examinations of such computers. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Describing the conditions of Petix's supervised release | Explains the legal obligations Petix failed to meet |
| 2514 | Petix conducted a Bitcoin transaction with an undercover federal agent at a business in Buffalo, NY. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Detailing the specific incident leading to the charges | Provides evidence of Petix's illegal activities |
| 2515 | Petix claimed that the laptop and smartphone were not his and that he could not access them. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Describing Petix's actions during the incident | Shows Petix's attempt to evade responsibility |
| 2516 | Petix conducted over 100 Bitcoin transactions wherein he transferred over $200,000 in bitcoins to customers both locally and across the United States. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Outlining the extent of Petix's illegal activities | Demonstrates the scale of Petix's unlicensed money transmitting business |
| 2517 | At least some of these customers then used the bitcoins to purchase controlled substances from dark net vendors. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Describing the illegal use of the bitcoins | Links Petix's actions to broader criminal activities |
| 2518 | At no time during this period did Petix comply with federal money transmitting business registration requirements. | Wei Xiang | Assistant U.S. Attorney | U.S. Department of Justice | statement | Highlighting Petix's legal violations | Emphasizes Petix's failure to adhere to regulatory requirements |
| theme_id | theme_name | description | significance | related_statutes | geographic_scope | temporal_aspects | stakeholders |
|---|---|---|---|---|---|---|---|
| 1764 | False Statements | Petix lied to probation officers and law enforcement about his ownership and use of a laptop and smartphone. | Constituted obstruction of justice and violated conditions of supervised release. | 18 U.S.C. § 1001 | Local | Recent development (2015) | Defendant, probation officers, law enforcement |
| 1765 | Unlicensed Money Transmitting Business | Petix conducted over 100 Bitcoin transactions totaling over $200,000 without federal registration. | Evaded regulatory oversight and enabled illicit financial activity. | 18 U.S.C. § 1960 | National | Historical trend (2014–2015) | Defendant, customers, financial regulators, law enforcement |
| 1766 | Cryptocurrency | Bitcoin was used to facilitate transactions, including transfers to undercover agents and dark net purchasers. | Provided anonymity and facilitated illegal transactions. | 18 U.S.C. § 1960 | National | Recent development (2014–2015) | Defendant, customers, law enforcement |
| 1767 | Drug Trafficking | Customers used Bitcoin transferred by Petix to purchase controlled substances on the dark net. | Linked Petix’s financial activity to drug distribution networks. | National | Recent development (2014–2015) | Dark net vendors, users, law enforcement | |
| 1768 | Supervised Release Violation | Petix failed to disclose computer use and lied during probation supervision. | Violated terms of prior conviction for child pornography distribution. | 18 U.S.C. § 2252, 18 U.S.C. § 3583 | Local | Ongoing during supervision (2009–2015) | Defendant, probation officers, court |
| 1769 | Dark Net Activity | Customers used Bitcoin transferred by Petix to purchase drugs from dark net vendors. | Highlighted the use of dark net platforms for illicit transactions. | National | Recent development (2014–2015) | Dark net vendors, users, law enforcement |
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