The United States authorities indicted a 25-year-old man last Friday for exchanging $25 million in cash and crypto obtained from illegal activities using his unlicensed money transmitting business.
Kunal Kalra, aka “Kumar,” “shecklemayne” and “coinman”, was charged with four counts of criminal information by the US Department of Justice.
The court documents detailed that Kalra operated a virtual currency exchange in the US from May 2015 to October 2017. He exchanged fiat currencies into Bitcoin and vice versa and only dealt with high-volume clients who were willing to pay a fee of at least $5,000.
The law enforcement also alleged that Kalra was indulged in business with criminals including darknet drug dealers. To facilitate transactions from such clients, he did not put in place any anti-money laundering program.
A well-set up business to provide services to criminals
To conceal the illegal dealings, the defendant even established bank accounts in the names of others, including fake businesses. He also admitted of operating a Bitcoin ATM to offer crypto-to-fiat exchange service to his clients.
The law enforcement from Kalra’s bank accounts along with his vehicles. Another 54.3 Bitcoins worth around half-a-million dollars were also confiscated.
Kalra’s hearing is scheduled for next month and he already agreed to plead guilty for his involvement in running the illegal business. For all the charges, he is expected to face a maximum of one life sentence in federal prison.
Apart from this case in the California court, Kalra is also facing federal criminal charges in San Antonio, Texas, for conspiracy to commit money laundering for a drug trafficking network. He also agreed to plead guilty to those charges in the Los Angeles federal court.
Meanwhile, that the Federal Trade Commission (FTC) recently settled with the promoters of a crypto-involved pyramid scheme for a total penalty of around $500,000.