6 ms·

Seems like they were arrested for selling bitcoins to silk road users en masse. Is this just a US law oddity or is that what passes for money laundering these d

by dreen 13y ago

Seems like they were arrested for selling bitcoins to silk road users en masse. Is this just a US law oddity or is that what passes for money laundering these days?

deleted 13y ago
[deleted]
caublestone 13y ago
Not quite. The US gov is accusing these men of putting wealth through the Silk Road (which was believed to be untraceable) in order to get this wealth off the books to avoid taxes and investigations of the source of this wealth. Edit: Not necessarily their own wealth.
- dmix 13y ago
  Where does it say that they used it for personal wealth laundering? As far as I can tell it was only for providing a service for purchasing BTC anonymously with cash. It seems to be that BitInstant CEO sold BTC to a known Silk Road BTC dealer, who was aware of what the BTC was being used for.
  - lispsil 13y ago
    Basically this, also surprised anybody would buy Bitcoins from a SR vendor. Also another reminder for companies to encrypt their internal emails this is also how they busted Megaupload because of stupid things they emailed each other 'hey where is Batman uploaded?'
    - rhino369 13y ago
      The court will just order them to turn it over unencrypted. And if you won't they can use that as evidence against you.
jljljl 13y ago
Speculating, but I imagine it has to do with US requirements on financial transaction reporting. Financial institutions and securities traders have certain requirements on which transactions and activity they report. http://en.wikipedia.org/wiki/Money_laundering#The_role_of_financial_institutions http://en.wikipedia.org/wiki/Money_laundering#The_role_of_fi... A bank must verify a customer's identity and, if necessary, monitor transactions for suspicious activity. This is often termed as "know your customer". This means knowing the identity of the customer and understanding the kinds of transactions in which the customer is likely to engage. http://en.wikipedia.org/wiki/Money_laundering#Preventive http://en.wikipedia.org/wiki/Money_laundering#Preventive These laws, contained in sections 5311 through 5332 of Title 31 of the United States Code, require financial institutions, which under the current definition include a broad array of entities, including banks, credit card companies, life insurers, money service businesses and broker-dealers in securities, to report certain transactions to the United States Treasury. Cash transactions in excess of US$10,000 must be reported on a currency transaction report (CTR), identifying the individual making the transaction as well as the source of the cash.
clamprecht 13y ago
I did 5 years for money laundering under 18 USC 1956(a), and I don't even know how to launder money. Sometimes they choose to charge you with money laundering because they can't actually catch you for another crime. Other times they choose money laundering because it carries a higher sentence than the underlying crime.
- shawabawa3 13y ago
  Would you mind sharing some more details? What did you do? And how did they turn that into money laundering?
  - ptk 13y ago
    This should get you started -- https://en.wikipedia.org/wiki/Chris_Lamprecht https://en.wikipedia.org/wiki/Chris_Lamprecht The cited external links should provide more depth.
- antiterra 13y ago
  So is this inaccurate?: With the help of at least one other person, the roommates re-sold these [stolen] high-end components to various telephony equipment suppliers nationwide, washing the checks through a series of falsified bank accounts and voice-mail business fronts. - http://www.fineorsuperfine.com/newyorkpress31.html http://www.fineorsuperfine.com/newyorkpress31.html
  - clamprecht 13y ago
    The sentence you quoted is mostly accurate. It says a "series of falsified bank accounts" - I'm not sure what they mean by a series. There were either 2 or 3 bank accounts under fake names. But this doesn't do anything to conceal the source of the funds, or make them appear legitimate. And I thought money laundering was all about making illegal money appear legal, by "washing" it. This is one of the problems with the money laundering law - it is pretty vague. The prosecutors in my case could have easily charged us with interstate transportation of stolen property, and then my sentence would have been half of what I actually received. If you do some more googling, you will find that the US Sentencing Commission investigated this sentencing disparity, including my own case. My prosecutor was pissed.

by dreen 13y ago

Seems like they were arrested for selling bitcoins to silk road users en masse. Is this just a US law oddity or is that what passes for money laundering these days?

deleted 13y ago

[deleted]

caublestone 13y ago

Not quite. The US gov is accusing these men of putting wealth through the Silk Road (which was believed to be untraceable) in order to get this wealth off the books to avoid taxes and investigations of the source of this wealth. Edit: Not necessarily their own wealth.

dmix 13y ago
Where does it say that they used it for personal wealth laundering? As far as I can tell it was only for providing a service for purchasing BTC anonymously with cash. It seems to be that BitInstant CEO sold BTC to a known Silk Road BTC dealer, who was aware of what the BTC was being used for.
- lispsil 13y ago
  Basically this, also surprised anybody would buy Bitcoins from a SR vendor. Also another reminder for companies to encrypt their internal emails this is also how they busted Megaupload because of stupid things they emailed each other 'hey where is Batman uploaded?'
  - rhino369 13y ago
    The court will just order them to turn it over unencrypted. And if you won't they can use that as evidence against you.

jljljl 13y ago

Speculating, but I imagine it has to do with US requirements on financial transaction reporting. Financial institutions and securities traders have certain requirements on which transactions and activity they report. http://en.wikipedia.org/wiki/Money_laundering#The_role_of_financial_institutions http://en.wikipedia.org/wiki/Money_laundering#The_role_of_fi... A bank must verify a customer's identity and, if necessary, monitor transactions for suspicious activity. This is often termed as "know your customer". This means knowing the identity of the customer and understanding the kinds of transactions in which the customer is likely to engage. http://en.wikipedia.org/wiki/Money_laundering#Preventive http://en.wikipedia.org/wiki/Money_laundering#Preventive These laws, contained in sections 5311 through 5332 of Title 31 of the United States Code, require financial institutions, which under the current definition include a broad array of entities, including banks, credit card companies, life insurers, money service businesses and broker-dealers in securities, to report certain transactions to the United States Treasury. Cash transactions in excess of US$10,000 must be reported on a currency transaction report (CTR), identifying the individual making the transaction as well as the source of the cash.

clamprecht 13y ago

I did 5 years for money laundering under 18 USC 1956(a), and I don't even know how to launder money. Sometimes they choose to charge you with money laundering because they can't actually catch you for another crime. Other times they choose money laundering because it carries a higher sentence than the underlying crime.

shawabawa3 13y ago
Would you mind sharing some more details? What did you do? And how did they turn that into money laundering?
- ptk 13y ago
  This should get you started -- https://en.wikipedia.org/wiki/Chris_Lamprecht https://en.wikipedia.org/wiki/Chris_Lamprecht The cited external links should provide more depth.
antiterra 13y ago
So is this inaccurate?: With the help of at least one other person, the roommates re-sold these [stolen] high-end components to various telephony equipment suppliers nationwide, washing the checks through a series of falsified bank accounts and voice-mail business fronts. - http://www.fineorsuperfine.com/newyorkpress31.html http://www.fineorsuperfine.com/newyorkpress31.html
- clamprecht 13y ago
  The sentence you quoted is mostly accurate. It says a "series of falsified bank accounts" - I'm not sure what they mean by a series. There were either 2 or 3 bank accounts under fake names. But this doesn't do anything to conceal the source of the funds, or make them appear legitimate. And I thought money laundering was all about making illegal money appear legal, by "washing" it. This is one of the problems with the money laundering law - it is pretty vague. The prosecutors in my case could have easily charged us with interstate transportation of stolen property, and then my sentence would have been half of what I actually received. If you do some more googling, you will find that the US Sentencing Commission investigated this sentencing disparity, including my own case. My prosecutor was pissed.