A bitcoin seller is facing up to five years in jail for operating a business without securing a license from the financial crimes watchdog, according to the U.S. Attorney's Office on Friday.
Michael Yusko, III, 46, of New Orleans, has pleaded guilty to operating an unlicensed money transmitting business from August 2017 to June 2019 as the owner and manager of Nervous Light Capital LLC before District Judge Barry W. Ashe, according to Bitcoin.com.
Investigations began when federal agents received complaints in May 2018 that the man was selling customers bitcoin and other cryptocurrencies, carrying out transactions with many customers, who paid him tens of thousands of dollars.
According to court documents, Yusko failed to follow through on transactions and return the U.S. dollars deposited in his accounts. He would then admit to being responsible for at least $201,399.00 in losses to victims.
Clients were promised any amount of bitcoin in exchange for U.S. dollars at five percent above market price for a five percent fee, directed to deposit money into the business bank accounts of Nervous Light Capital, Praetorian Energy, Patriot Concrete Pumping, and Ready Demolition LLC, in the sale of these digital currencies, the Department of Justice (DOJ) noted.
However, Yusko did not register these companies as money-transmitting businesses with the Financial Crimes Enforcement Network (FinCEN) of the Department of Treasury, failing to comply with the regulations of Title 31, United States Code, Section 5330.
Under U.S. federal law, businesses that trade fiat currencies, such as U.S. dollars, for cryptocurrencies, such as bitcoin, litecoin, and ethereum are required to register with FinCEN as money-transmitting businesses, CoinGeek noted.
A further probe would then reveal that the defendant instructed his clients not to disclose at the banks that the purpose of their transactions was to purchase cryptocurrency after the financial institutions shut down some of his accounts for such activity.
As part of his plea, Yusko agreed to make full restitution after the DOJ sought to have him forfeit any property he derived from the proceeds of the offense.
Yusko shall also forfeit any other property up to that value if any of the property cannot be located, has been acquired by a third party, or has diminished its value.
Following a conviction, Yusko may also be hit with a maximum $250,000.00 fine, up to three years of supervised release, and a $100 mandatory special assessment fee.
He is slated to re-appear in court on Nov. 4, 2021, before Judge Ashe for his sentencing.
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