Monday, January 27, 2014

DEA Cracks Down On Bitcoin Exchangers

NEW YORK, New York -- The DEA and other federal law enforcement partners announced today that certain Bitcoin exchangers, including a CEO, were charged with money laundering related to drug proceeds from users of the Silk Road website.


James J. Hunt, the DEA Acting Special Agent in Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), Preet Bharara, the United States Attorney for the Southern District of New York, and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of criminal charges in Manhattan federal court.


Charges are against ROBERT M. FAIELLA, a/k/a “BTCKing,” an alleged underground Bitcoin exchanger, and CHARLIE SHREM, the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company, for allegedly engaging in a scheme to sell over $1 million in Bitcoins to users of “Silk Road,” the so-called underground website that allegedly enabled its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. 

Each defendant is charged with conspiring to commit money laundering, and operating an unlicensed money transmitting business. SHREM is also charged with willfully failing to file any suspicious activity report regarding FAIELLA’s illegal transactions through the Company, in violation of the Bank Secrecy Act. SCHREM was arrested yesterday at John F. Kennedy International Airport in New York, and is expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Henry Pitman. FAIELLA was arrested today at his residence in Cape Coral, Florida, and is expected to be presented in federal court in the Middle District of Florida.


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