Florida Connection to Silk Road Case, Bitcoin, Money Laundering and More

In late January, a U.S. District Judge sentenced a Cape Coral, Florida man to four years in federal prison and the forfeiture of almost $1 million after he pleaded guilty to the charge of tax evasion.

Robert Faiella accepted the plea which was the lesser of the allegations charged against him for his role in a case that has direct ties to the headline grabbing “Silk Road” case that came to a conclusion in early February. Faiella’s codefendant, Charlie Shrem was sentenced to two years behind bars for the same crime just one month before this latest plea deal was accepted.

Faiella, a/k/a “BTCKing” was originally arrested and charged last year with operating the unlicensed money transferring business and conspiracy to commit money laundering. He was well-known as a Bitcoin entrepreneur who allowed those who used the Silk Road Website unfettered access to his monetary exchange. Bitcoin is digital currency that has been in use since 2009 for purchasing all types of items on or through the Internet. It cuts out banks as middle men avoiding transaction fees such as percentages charged by credit cards and can be utilized without giving a person’s actual name. Faiella operated his Bitcoin exchange and purchased the digital currency through “BitInstant” within the Silk Road’s confines on the “Dark Web”.

It was suspected that buyers and sellers who used Faiella’s services were able to exchange cash for Bitcoins anonymously which made it possible for them to buy illegal drugs as well as other illegal articles on the Dark Net market site. Shrem and Faiella made profits on the transactions through a handling fee. Allegations of the sale of illegal firearms and even murder for hire were also raised as prospects of the Silk Road’s merchant’s commodities.

The Indictment, unsealed in late January, alleged that Shrem and Faiella colluded to launder in excess of $1 million of Bitcoin transactions that poured over the Silk Road between the years of 2011 through 2013. Shrem was named the CEO and chief compliance officer while Faiella was charged as being the owner/operator mastermind of the monetary exchange.

The Silk Road case itself came to a conclusion early last month when its alleged mastermind Ross Ulbricht was found guilty on all counts charged against him. The feds seized the site in Oct. 2013 and arrested him in San Francisco. Ulbricht’s pseudonym was “Dread Pirate Roberts” and was convicted by a federal jury after a few short hours of deliberations. He was charged with drug trafficking and money laundering among the seven counts brought against him. He faces a minimum of twenty years in prison which can be upped to life in prison upon sentencing. His legal team plans to appeal the verdict.

Almost one year ago to the day, another Florida man was charged with selling Bitcoins for the purpose of money laundering to undercover federal agents. Michell Abner Espinoza was charged with one count of operating an unlicensed money service business, laundering up to twenty thousand dollars, and laundering currency valued at more than twenty thousand dollars. His co-defendant Pascal Reid, a citizen of Canada was also charged as co-defendant in the case. Both men were arrested in Miramar, Florida.

A journalist and security researcher who first broke that story said that the “arrests may be the first state prosecutions involving the use of Bitcoins in money laundering operations,” according to Miami-Dade State Attorney Katherine Fernandez Rundle’s office.

In March, 2013 Florida Regulators issued a warning relating to Bitcoin that can be read at this link.

Money laundering whether in the real or virtual world is a federal crime. With more than thirty-five combined years in the legal field working as an Assistant United States Attorney prosecuting cases for the government and for more than the past decade practicing as a criminal defense attorney, my law office specializes in federal criminal defense and is the proper choice to fight all allegations of these crimes when accused by the federal government.

To view all of my qualifications and understand what should be done next if you or someone you care about is charged with money laundering, tax evasion, or facing any other federal criminal charges, click here.

*Superlative federal criminal defense in Miami, Fort Lauderdale and West Palm Beach as well as all the neighboring counties in the surrounding areas of South Florida since the turn of the twenty-first century.

**All Articles and Web pages that have been used to research this blog post, in full or in part can be found on the Internet at the links listed below:


Sources:
http://rt.com/usa/bitcoin-florida-laundering-arrest-431/

http://bitcoinist.net/charlie-shrem-jailed-bitcoin-crimes-hsbc-execs-walk-free/

http://www.bloomberg.com/news/articles/2014-02-09/miami-bitcoin-arrests-may-be-first-state-prosecution

http://observer.com/2015/02/bitcoin-crime-wave-breaks-out-in-nyc/

http://www.forbes.com/sites/alexknapp/2015/01/19/faking-murders-and-stealing-bitcoin-why-the-silk-road-is-the-strangest-crime-story-of-the-decade/

http://bitcoinexaminer.org/weekly-round-up-bitcoin-crime-skyrockets-dell-expands-btc-payment-option-more/

http://www.wired.com/2015/01/bitcoin-exchange-operator-sentenced-4-years-silk-road-transactions/

http://www.flofr.com/PressReleaseDetail.aspx?id=4252

http://fox2now.com/2014/12/10/illinois-man-sentenced-for-bitcoin-exchange-scheme/

http://www.coinfox.info/index.php/en/allnews/23-persons/1265-florida-bitcoin-exchange-organizer-sentenced-to-four-years-in-prison

http://en.wikipedia.org/wiki/Silk_Road

http://www.usatoday.com/story/news/2015/02/04/silk-road-verdict-ulbricht/22824331/

http://elitedaily.com/envision/the-craziest-things-you-couldve-bought-on-silk-road-the-black-market-of-the-internet/

http://www.usatoday.com/story/news/2015/01/28/silk-road-heroin-dealer-testifies/22490109/

http://arstechnica.com/tech-policy/2014/01/men-charged-with-scheme-to-sell-1-million-in-bitcoins-to-silk-road-users/

http://mashable.com/2015/02/04/ross-ulbricht-guilty-silk-road/

http://www.wired.com/2015/01/bitcoin-exchange-operator-sentenced-4-years-silk-road-transactions

http://arstechnica.com/tech-policy/2014/01/men-charged-with-scheme-to-sell-1-million-in-bitcoins-to-silk-road-users