Fitchburg man charged with money laundering and illegal money transmission for converting cash to Bitcoin

Date: March 4, 2021

Contact: newsroom@ci.irs.gov

BOSTON — A Fitchburg man was indicted by a grand jury in connection with his alleged involvement in an unlicensed money transmission business that exchanged cash for Bitcoin for individuals represented to be involved in unlawful trafficking in counterfeit goods.

Alan Joseph was indicted today on one count of operating an unlicensed money transmitting business and four counts of money laundering. Joseph was initially charged by criminal complaint and arrested in February 2021.

According to charging documents, between August 2020 and February 2021, Joseph engaged in at least four financial transactions where he converted cash to Bitcoin in connection with what Joseph believed to be trafficking in counterfeit goods, which is illegal under federal law. Bitcoin is a form of virtual currency, or cryptocurrency, that has no physical form and is traded exclusively by electronic means.

Joseph allegedly sought to promote and conceal the nature of such illegal activity. For instance, on Aug. 12, 2020, Joseph converted approximately $12,000 in cash to Bitcoin for an undercover agent who Joseph believed to be a seller of counterfeit “Gucci” products sourced from China. The undercover agent further represented that his Chinese supplier required Bitcoin to purchase the product. Approximately two months later on Oct. 28, 2020, Joseph allegedly converted about $25,000 in cash to Bitcoin for the same undercover agent. During this meeting, the undercover agent represented to Joseph that the money Joseph was converting was from “rich housewives” who purchased “fake” items. It is further alleged that Joseph expressed an interest in purchasing counterfeit goods from the undercover agent.

Contrary to federal law and regulations, Joseph never registered his money transmission business with the Department of Treasury, nor did he ever request identification from the undercover agent during the meetings.

The charge of money laundering provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of $250,000. The charge of operating an unlicensed money transmitting business provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney Nathaniel R. Mendell; Ramsey E. Covington, Acting Special Agent in Charge of the Internal Revenue Services-Criminal Investigation; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation; William S. Walker, Special Agent in Charge of Homeland Security Investigations in Boston; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service made the announcement. Assistant U.S. Attorney John T. Mulcahy of Mendell’s Worcester Branch Office is prosecuting the case.

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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