Best Defender Bytes: Crime after Crime

July 10, 2018

“Bitcoin Maven” Sentenced to One Year in Federal Prison in Bitcoin Money Laundering Case

Filed under: California Defense Attorney — fayarfa @ 8:40 am

LOS ANGELES, California – The so-called “Bitcoin Maven,” who admitted to operating an unlicensed bitcoin-for-cash exchange business and laundering bitcoin that was represented to be proceeds of narcotics activity, was sentenced today to 12 months and one day in federal prison, three years of supervised release, and a fine of $20,000.

Theresa Lynn Tetley, 50, of Southern California, a former stockbroker and real estate investor, was sentenced by United States District Judge Manuel L. Real for conducting an illegal business and engaging in unlawful monetary transactions involving bitcoins. Tetley was also ordered to forfeit 40 Bitcoin, $292,264.00 in cash, and 25 assorted gold bars that were the proceeds of her illegal activity.

Tetley pleaded guilty to one count of operating an unlicensed money transmitting business and one count of money laundering.

The government’s case against Tetley is the first of this kind charged in the Central District of California. According to court documents, Tetley offered bitcoin-for-cash exchange services without registering as a money services business with the Financial Crimes Enforcement Network (FinCEN), and without implementing anti money-laundering mechanisms such as customer due diligence and reporting certain transactions required for these types of businesses. Tetley advertised on localbitcoins.com and exchanged, in total, between $6 and $9.5 million for customers across the country, charging rates higher than institutions that were registered with FinCEN.

As a result of operating this unregistered business, Tetley facilitated laundering for one individual who is suspected of receiving bitcoin from unlawful activity, such as sales of drugs on the dark web. In the course of her business, Tetley also conducted an exchange of bitcoin-for-cash for an undercover agent who represented that his bitcoin were the proceeds of narcotics trafficking.

According to sentencing documents, the government argued that “[i]n light of the growth of the dark web and the use of digital currency, unlicensed exchangers provide an avenue of laundering for those who use digital currency for illicit purposes.” The government asserted that Tetley’s business “fueled a black-market financial system” that “purposely and deliberately existed outside of the regulated bank industry.”

The investigation into Tetley was conducted by the Drug Enforcement Administration and IRS Criminal Investigation.

The case is being prosecuted by Assistant United States Attorney Puneet V. Kakkar of the Organized Crime Drug Enforcement Task Force Section.

Component(s): USAO – California, Central

Contact: Thom Mrozek Spokesperson/Public Affairs Officer United States Attorney’s Office Central District of California (Los Angeles) 213-894-6947

Press Release Number: 18-107        Updated July 9, 2018

Central District of California DOJ / 18-107 / July 9, 2018

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