Freeman is still awaiting sentencing and attended DiMezzo’s hearing in the U.S. District Court of New Hampshire to support her as a friend, he told the Globe.
Scammers would court their victims — who were often vulnerable, elderly people — and pose as a romantic interest, pretending to develop a relationship with the victim online. The scammer would then tell their victim they were in trouble and needed money, and use a business like DiMezzo’s or Freeman’s to transfer and launder that money, converting it from cash to bitcoin.
Three other members of the Crypto 6 who faced charges of wire fraud received sentences that did not involve prison. But federal prosecutors argued DiMezzo was more closely involved in Freeman’s business, taking on some of his clients and opening bank accounts when he no longer could. After she serves her 18-month sentence, DiMezzo will also have one year of supervised release.
Prosecutors asked for a maximum sentence of 37 months, arguing that DiMezzo had intentionally and willfully turned a blind eye to the nefarious customers her business attracted and had designed a business that would facilitate that kind of transaction. DiMezzo’s business didn’t have the same safeguards in place as a regulated financial institution.
“Because it wasn’t a safe business, people were hurt,” said Seth Aframe, an assistant United States attorney. “People gave money to Ms. DiMezzo’s business and they were defrauded.”
DiMezzo and her lawyer were pushing for her to serve a one-year sentence under home confinement without any time in prison. Both DiMezzo and her lawyer argued she had no idea the transactions were part of a scam.
“As misguided as she was about the licensing issue, she wasn’t trying to defraud anyone,” her attorney Richard Guerriero told the judge, Joseph Laplante. “The only thing she did wrong was not have a license.”
And they said the judge should take into account other factors of DiMezzo’s identity when determining her sentence, like the particular risk prison could pose to her as a transgender woman. DiMezzo’s lawyer portrayed her as someone who escaped a troubled home in northern Mississippi with drug addicted parents and now lives humbly: a 36-year-old woman with no prior criminal record who rents a house, lives with her dog, and works as an assistant manager at Domino’s.
The summer of 2020 was the height of DiMezzo’s crypto business, which prosecutors estimate involved the exchange of $3 million. DiMezzo charged a transaction fee ranging from around 10 to 20 percent.
The prosecution played a video for the judge before he issued the sentence, which showed DiMezzo instructing others to never ask what a client is using bitcoin for and to end the relationship if a client ever divulged that information. They also showed a clip in which DiMezzo calls the elderly victim of a romance scam “stupid” and “an idiot.”
“That’s a recipe for disaster and makes the crime more aggravated than simply not getting a license,” Aframe said.
Judge Laplante finally determined that it didn’t matter so much whether DiMezzo knew she was harming the victims, but that his sentence would reflect the fact that they were harmed.
“I have nothing but regret,” DiMezzo said, adding that she was reckoning with her “arrogance.” Crypto currency like bitcoin has a strong ideological appeal to DiMezzo and other libertarians, who value financial privacy. DiMezzo compared it to paying someone to cut a lawn — she wouldn’t then ask someone what they’re going to spend the money on.
She said she operated under the belief that government isn’t good. “I thought we were making banks frustrated,” she said, pointing to examples of big banks like Bank of America and Wells Fargo. “My goal was to bring down the banks.”
She said she regretted calling one of the scam victims stupid and said she started therapy shortly after the episode.
Earlier in April, DiMezzo agreed to hand over around 2 bitcoin to the government worth between $50,000 and $60,000, in order to help those who had been victims of the scam.
“The point wasn’t to help with the sentencing. The point was to help the fraud victims,” she told the Globe ahead of the hearing. “In that way I was able to. I didn’t know they were fraud victims at the time.”
A group of around 30 individuals gathered to support DiMezzo. Some wore black t-shirts that read “Bitcoin is not a crime.” Others started crying after the sentence was delivered.
“She means a lot to a lot of people,” Freeman said. “She never harmed anyone.”
DiMezzo has 14 days to appeal the sentence. Late on Tuesday, she tweeted that she would not appeal the decision. “The sentence will have been served by the time any appeal would be heard,” she said.
Amanda Gokee can be reached at amanda.gokee@globe.com. Follow her on Twitter @amanda_gokee.
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