DANVERS — A Danvers man who allegedly runs an unlicensed money transmitting business that converted more than $1 million in cash into Bitcoin on behalf of clients that included drug dealers and scammers was arrested Friday.
Trung Nguyen, 46, was indicted on one count of conducting an unlicensed money transmitting business, one count of concealment money laundering and one count of money laundering, the U.S. District Attorney’s Office said in a statement Monday.
He could face up to 45 years in prison and around $750,000 in fines if convicted.
Nguyen was released on a $250,000 unsecured bond with conditions following his appearance in federal court in Boston, according to the statement.
Nguyen, who also went by“DCS420,” owned and operated National Vending, LLC, which he used to accept cash from customers and send them Bitcoin in return for a fee, officials said.
He purposely failed to register his business with the Department of Treasury’s Financial Crimes Enforcement Network, officials allege. Virtual currency exchanges, including those dealing with Bitcoin, are required to do this under federal anti-money laundering regulations.
These businesses must also file Suspicious Activity Reports with FinCEN and file Currency Transaction Reports for Bitcoin-for-cash exchanges of more than $10,000, officials said.
Nguyen allegedly accepted a total of $200,000 to $300,000 in cash over 15 transactions in 2018 from a man who identified himself to Nguyen as a methamphetamine dealer, according to the statement.
Nguyen also allegedly accepted cash transactions between October 2018 and September 2019 from an undercover law enforcement agent who told him that he was delivering Adderall to gamblers at a casino in the state, officials said.
Then in 2020, Nguyen allegedly accepted about $60,000 from a 59-year-old woman who thought she was sending cash to a lover overseas, but was actually being scammed by the recipient, the statement said.
Officials allege that Nguyen did not file any Suspicious Activity Reports or Currency Transaction Reports on any of these transactions or ones that were larger than $10,000, according to the statement.
“Nguyen allegedly concealed his money transmitting business by, among other ways, holding National Vending out to banks, cryptocurrency exchanges, and state authorities as a vending machine business, using encrypted messaging apps to communicate with customers, using technologies that made it more difficult to trace Bitcoin transactions, and breaking cash deposits of more than $10,000 into smaller cash deposits of less than $10,000 over consecutive days or at different branches of the same bank,” the statement said.
He also allegedly enrolled in a paid course on concealing his business that recommended he operate “a business for which cash deposits from around the country make sense” and that he “develop (his) cover story,” “create a list of your suppliers (fictitious of course)” and “Don’t say the word ‘Bitcoin’,” according to the statement.
Assistant U.S. Attorney Seth B. Kosto, deputy chief of Levy’s Securities, Financial & Cyber Fraud Unit, is prosecuting the case.
Contact Caroline Enos at CEnos@northofboston.com and follow her on Twitter @CarolineEnos.
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