A US man operating what prosecutors called a “no questions asked” cash-to-Bitcoin conversion service has been sentenced to six years behind bars and was ordered to hand over millions of dollars.
Boston federal court Judge Richard Stearns sentenced Trung Nguyen, from Danvers, Massachusetts, to six years in prison followed by three years of supervised release, and ordered him to forfeit $1.5 million, the Boston US Attorney’s Office said on May 22.
Prosecutors said Nguyen ran an unlicensed money-transmitting business called National Vending between September 2017 and October 2020, which used various techniques he learned in an online course to evade authorities.
As part of the course, Nguyen was taught how to conceal his actual business from banks, crypto exchanges and state authorities by masquerading as a vending machine company that accepted cash deposits, had a list of fictional suppliers, and generally avoided using the phrase “Bitcoin” where possible.
Prosecutors say Trung Nguyen operated a fake vending machine business to obscure the cash deposits he was receiving. Source: Pacer
According to prosecutors, among Nguyen’s customer base were several scam victims who were tricked into converting cash into Bitcoin (BTC) by con artists overseas, as well as a drug dealer who sent $250,000 in cash across 10 transactions in 2018.
The Justice Department said Nguyen converted more than $1 million to Bitcoin and “purposely failed” to register with the Treasury’s Financial Crimes Enforcement Network (FinCEN) despite being required to do so under federal Anti-Money Laundering regulations.
Nguyen also “failed to file Suspicious Activity Reports or Currency Transaction Reports on any of these transactions, including cash transactions of more than $10,000,” according to prosecutors.
Undercover cops sting Nguyen
Nguyen would often meet his clients in person to accept large sums of cash, which is how he was caught, prosecutors said.
A May 2023 indictment said that during several meetings with undercover law enforcement officers, he accepted cash and sent Bitcoin in return, taking just over 5% in commission.
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The indictment said Nguyen used encrypted messaging apps and “technologies that made it more difficult” to trace his Bitcoin transactions and broke up the cash deposits into smaller sums over consecutive days and at different branches of the same bank to evade notice by authorities.
Nguyen was charged with operating an unlicensed money transmitting business and two counts of money laundering. He pleaded not guilty to all charges in June 2023.
A jury convicted him in November on the unlicensed money-transmitting business charge and on just one of the money laundering charges, finding him not guilty of a separate money laundering charge.
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