Man Pleads Guilty to Running an Illegal Cryptocurrency Exchange Business

~2 min read | Published on 2023-09-07, tagged BitcoinCryptocurrencyMoney-LaunderingPleaded-Guilty using 378 words.

A California man admitted to helping fraudsters and drug dealers launder funds he knew were from illegal sources by anonymously exchanging Bitcoin for cash.

Charles James Randol, 33, admitted that from October 2017 to July 2021, he operated a virtual currency for cash business known as "Bitcoins4Less," and later "Digital Coin Strategies." He provided bitcoin for cash and vice versa for a fee.
Randol failed to maintain an effective AML program for his business and allowed individuals to anonymously launder millions of dollars. The business was directly linked to a fraud scheme that saw an elderly victim lose over $1 million in savings and retirement funds.
Randol marketed his services through ads on various platforms including, LocalBitcoins, and through a website he had created for the business.
To provide the services, Randol ran a series of Bitcoin ATMs that allowed his clients to conduct transactions without restrictions. He also met his customers for in-person transactions or had cash mailed to post office boxes under his control.
As disclosed in his plea agreement, the investigators established that between June 2018 and early 2020, Randol received dozens of packages containing a total of approximately $1,147,500 mailed to addresses under his control by a victim of a fraud scheme. After receiving the cash, Randol sent Bitcoin to addresses provided by the fraudsters.
At the Bitcoin ATMs, he allowed his customers to structure their transactions to avoid reporting requirements. He also allowed his customers to conduct transactions through test accounts that did not contain any customer information.
Randol hired a compliance officer in September 2020. The officer advised him to stop the use of test accounts at the ATMs and to stop engaging in in-person cash transactions, but he did not comply.
Between October 2020 and January 2021, Randol engaged in three in-person transactions with an undercover FBI agent. In the transactions, he gave the FBI agent a total of $273,940 in cash for Bitcoin and kept a four percent fee.
In all the transactions with the agent, Randol did not ask for any identifying information or information regarding the source of the funds he exchanged.
On September 9, 2023, Randol agreed to plead guilty to one count of failure to maintain an effective anti-money laundering (AML) program. He faces a maximum sentence of five years in federal prison.