Money Laundering Charges Announced Against Chicago Area Crypto Firm
As we have previously covered, the Trump Administration previously disbanded the Department of Justice’s National Cryptocurrency Enforcement Team and has generally expressed a desire to work with industry and business leaders in the cryptocurrency space rather than necessarily prosecute those whose platforms are necessarily used by criminal enterprises outside their control. This embrace of cryptocurrency, however, has not led to a “get-out-of-jail” for free card for many of the industry’s bad actors who still engage in criminal conduct, as evidenced by the recent announcement of charges against Chicago-based Virtual Assets LLC and its founder Firas Isa. According to the unsealed indictment, the company, doing business as “Crypto Dispensers” largely operated as a cash-to-cryptocurrency exchange business, with ATMs located at various locations across the United States. The indictment alleges that Isa, Virtual Assets LLC, and its cofounder, identified as “Co-Conspirator 1” knew that customers and, in some cases, fraud victims, would deposit funds derived from wire fraud into these cryptocurrency ATMs, convert the funds to cryptocurrency, and then transfer the cryptocurrency to a cryptocurrency wallet addresses” designed to conceal the origins of ill-gotten gains, which is considered money laundering. In total, the conspiracy is alleged to have been responsible for at least $10 million in proceeds that derived from either wire fraud or narcotics offenses. It appears that charges were brought because it is alleged that the company and its founder had knowledge that at least some of the funds deposited were the result of ill-gotten gains. The alleged manner in which they sought to obfuscate the source of funds certainly played a role in the government’s decision to bring charges.
The indictment naming a “Co-Conspirator 1” without said individual being specifically named usually indicates that they are at least in some way cooperating against Isa and the company, particularly since they are listed a cofounder and chief compliance officer of said company. It has not yet been revealed, but is assumed that Co-Conspirator-1 will receive benefits for their cooperation, either through a non-prosecution agreement, deferred prosecution, reduction in charges, or ultimate agreement by the government to move for a reduction in sentence under the federal guidelines for Co-Conspirator-1’s “substantial assistance” the government in the event he/she is charged and convicted. Although having a cooperating witness involved in an investigation and/or prosecution can prove difficult for any charged defendant or target on an investigation (particularly if the cooperating witness shares personal communications, information, or inside knowledge of an alleged conspiracy), it by no means is fatal to a defense given the cooperator’s credibility can always be challenged through cross-examination and otherwise. For example, if said cooperator has not been truthful with the government or they minimized their part in the alleged scheme, information that can come out through the discovery process, independent investigation, or at trial. Anyone accused of participating in a conspiracy, particularly those accused of financial crimes, crimes in emerging industries like cryptocurrency where the regulations have changed over recent years, or others allegedly engaging in other complex conspiracies with documented paper or electronic trails, should ensure that they hire an experienced criminal defense attorney who understands how to investigate, challenge, and best defend against those types of allegations and can save people from going to prison for many years.
