Rochester Man Pleads Guilty In Case Involving Bitcoins
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-bitcoins
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| participant_id | name | role | title | organization | location | age | nationality | status |
|---|---|---|---|---|---|---|---|---|
| 2464 | James P. Kennedy, Jr. | prosecutor | Acting U.S. Attorney | U.S. Attorney's Office | Buffalo, NY | |||
| 2465 | Richard Petix | defendant | Rochester, NY | 32 | pleaded guilty | |||
| 2466 | Charles J. Siragusa | judge | U.S. District Judge | U.S. District Court | Buffalo, NY | |||
| 2467 | Wei Xiang | prosecutor | Assistant U.S. Attorney | U.S. Attorney's Office | Buffalo, NY | |||
| 2468 | Kevin Kelly | investigator | Acting Special Agent-in-Charge | Immigration and Customs Enforcement, Homeland Security Investigations | ||||
| 2469 | Shelly Binkowski | investigator | Inspector-in-Charge | United States Postal Inspection Service |
| agency_id | agency_name | abbreviation | role | office_location | agents_mentioned | contribution |
|---|---|---|---|---|---|---|
| 1566 | U.S. Attorney's Office | USAO | prosecution | Western District of New York | James P. Kennedy, Jr., Wei Xiang | Prosecuted the case and handled legal proceedings |
| 1567 | Immigration and Customs Enforcement, Homeland Security Investigations | HSI/ICE | investigation | Kevin Kelly | Led the investigation into Bitcoin transactions and supervised release violations | |
| 1568 | United States Postal Inspection Service | USPIS | investigation | Shelly Binkowski | Assisted in the investigation of the case | |
| 1569 | United States Probation Office | USPO | enforcement/supervision | Overseeing defendant's supervised release and confronting him during the transaction |
| 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 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 1274 | making material false statements | five years in prison | Richard Petix | pleaded guilty | 0 | enrichment | ||||||||
| 1275 | operating an unlicensed money transmitting business | five years in prison | Richard Petix | pleaded guilty | 1 | enrichment | 2026-09-16T19:45:59+00:00 | |||||||
| 3373 | operating an unlicensed money transmitting business, before U | 1 | press | 2026-09-16T19:45:59+00:00 | ||||||||||
| 3374 | 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 |
|---|---|---|---|---|---|---|---|
| 1216 | seizure | $13,000 | USD | Bitcoin transaction with an undercover federal agent | cryptocurrency | Richard Petix | completed |
| 1217 | seizure | $200,000 | USD | Bitcoin transactions with customers | cryptocurrency | Richard Petix | completed |
| victim_id | victim_type | description | number_affected | loss_amount | geographic_scope | vulnerability_factors | impact_description |
|---|---|---|---|---|---|---|---|
| 611 | 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 |
|---|---|---|---|---|---|---|---|
| 2503 | 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 |
| 2504 | 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 |
| 2505 | 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 | Detailing Petix's actions during the Bitcoin transaction | Shows Petix's attempt to evade detection and responsibility |
| 2506 | 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 | Describing the extent of Petix's illegal activities | Illustrates the scale of Petix's unlicensed money transmitting business |
| 2507 | 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 | Detailing the illegal use of bitcoins by Petix's customers | Connects Petix's actions to broader criminal activities |
| 2508 | 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 failure to comply with legal requirements | Emphasizes the legal violations committed by Petix |
| theme_id | theme_name | description | significance | related_statutes | geographic_scope | temporal_aspects | stakeholders |
|---|---|---|---|---|---|---|---|
| 1758 | Bitcoin Transactions | Petix conducted over 100 Bitcoin transactions totaling over $200,000, including a $13,000 transfer to an undercover agent. | Central to charges of operating an unlicensed money transmitting business and facilitating illegal purchases. | 18 U.S.C. § 1960 | National | 2014-2015 | Law enforcement, Financial institutions, Customers |
| 1759 | Unlicensed Money Transmitting Business | Petix operated a money transmitting business without federal registration. | Primary criminal charge leading to guilty plea. | 18 U.S.C. § 1960 | National | 2014-2015 | Law enforcement, Financial regulators, Customers |
| 1760 | False Statements to Authorities | Petix lied about owning computers and denied access during probation checks. | Violated probation terms and formed basis for false statements charge. | 18 U.S.C. § 1001 | Local | 2015 | Probation officers, Law enforcement |
| 1761 | Child Pornography Prior Conviction | Petix had a 2009 conviction for transporting child pornography, affecting his probation terms. | Contextualized his obligation to disclose computer usage. | 18 U.S.C. § 2252 | National | Historical | Courts, Probation officers |
| 1762 | Dark Net Drug Purchases | Customers used Petix's Bitcoin services to buy controlled substances on dark net platforms. | Linked his financial activities to drug trafficking. | 21 U.S.C. § 846 | International | 2014-2015 | Drug vendors, Law enforcement |
| 1763 | Law Enforcement Collaboration | ICE Homeland Security Investigations and U.S. Postal Inspection Service jointly investigated the case. | Demonstrates multi-agency cooperation in cryptocurrency-related crimes. | National | Recent | ICE, USPS, DOJ |
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