Bitcoin Money Launderer Faces Decades in Jail
A man from Bothell, Washington, is facing multiple charges for distributing drugs and for using Bitcoin to launder money.
Kenneth Warren Rhule, aged 26, is facing the possibility of spending several decades in prison. He was charged yesterday in the U.S. District Court of Seattle with an eight-count complaint. Most of the complaints center on Rhule using Bitcoin to launder money for criminals, who just happened to be undercover agents.
Using Bitcoin for Bad
Rhule popped up in law enforcement’s radar in April 2018 for running an unlicensed Bitcoin exchange under the alias of “Gimacut93.” Undercover agents met with Rhule at multiple locations, although Starbucks was the primary choice, posing as human traffickers looking to launder their ill-gotten gains. Rhule agreed to take the cash offered by the undercover agents and launder it through cryptocurrency. At no time did Rhule ask any questions of the agents to fulfill the know-your-customer (KYC) protocols associated with financial businesses. In fact, he offered advice on cryptocurrency to the undercover agents and tips on how to hide the source of their funds.
In addition to his Bitcoin money-laundering operation, Rhule also ran a business creating marijuana products without a license. His business manufactured hash oil and other marijuana products under different monikers. He said he was selling some of his narcotic products in Florida, and he was also exchanging some of the marijuana products for cryptocurrency. Rhule is facing five counts of laundering of monetary instruments, operating an unlicensed money transmitting service, and one count of conspiracy to produce and distribute marijuana. The potential jail time for the charges is a mandatory five years and up to 40 years for conspiracy to manufacture and distribute marijuana, five years for operating an unlicensed money transmitting service, and up to 20 years for money laundering.
Two Crypto Crooks Nabbed in Japan
Police in Japan arrested two men for obtaining NEM that was stolen during the hack on the Coincheck exchange in January 2018. A total of 58 billion yen (US$552 million) in NEM was stolen during the hack. Police say Takayoshi Doi, aged 30, and Masaki Kitamoto, aged 39, knew they were obtaining NEM that had been illegally stolen. Authorities say the two used Bitcoin and other cryptocurrencies to buy the NEM and that Masaki Kitamoto managed to acquire over 2 billion yen (US$19 million) in stolen NEM. According to reports, Takayoshi Doi has refused to speak to the police while Masaki Kitamoto has confessed to the charges.
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