Feds Indict 21 People in Global Crypto Money Laundering Case

A member of the US Secret Service talks on a cell phone as US President-elect Donald Trump attends meetings at the US Capitol in Washington, DC November 10, 2016.

Saul Loeb | AFP | Getty Images

The U.S. Attorney’s Office for the Eastern District of Texas announced on Wednesday that it has charged 21 people in a transnational crypto money laundering ring that washed millions of scammed funds from thousands of American victims.

The charges were uncovered as part of “Operation Crypto Runner”, which was established by US Attorney Brit Featherston of the Eastern District of Texas, the Secret Service and the United States Postal Inspection Service.

“These arrests are just the beginning. We are committed to bringing each of the remaining perpetrators to justice,” Secret Service Special Agent William Smarr said.

Law enforcement officials said an annual flow of more than $300 million in laundered transactions had been disrupted, along with the seizure and confiscation of millions in cash and cryptocurrency.

The program specifically targeted seniors, Featherston said.

“This case proves that we can find these people and bring them to justice,” Resident Secret Service Agent Bill Mack told CNBC’s Eamon Javers.

The U.S. Attorney for the Eastern District of Texas also shared further details about some of the people named in the indictments or who had pleaded guilty.

John Khuu, 27, has been charged in federal court with money laundering conspiracy. Khuu allegedly laundered over $5 million in illicit proceeds from counterfeit pharmaceuticals and controlled substances across the United States.

Randall Rule, 71, and Gregory Nysewander, 64, have been indicted in federal court for allegedly laundering more than $2.4 million in wire fraud and mail fraud proceeds, using cryptocurrency.

This isn’t the first major action federal law enforcement has taken in the crypto space.

In August, the US Treasury sanctioned currency mixer Tornado Cash, which the federal government said had been used to launder more than $7 billion worth of cryptocurrency since its inception. Shortly after the sanctions, Tornado developer Alexey Pertsev was stopped in Amsterdam for alleged involvement in “concealing criminal financial flows and facilitating money laundering”, according to Dutch law enforcement.

– CNBC’s Eamon Javers contributed to this report.


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