US Court Seizes 81 BTC, Sends Bitcoin Trader to Jail for 41 Months for Money Laundering
A U.S. district judge has ordered a bitcoin trader to forfeit 81 bitcoins and sentenced him to 41 months in prison for money laundering. Thomas Mario Costanzo, also known as Morpheus Titania, sold bitcoins to undercover federal agents pretending to be drug dealers, according to the Department of Justice.
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41 Months in Prison
The U.S. Department of Justice (DOJ) announced Wednesday, August 1, that District Judge G. Murray Snow has sentenced a bitcoin trader to 41 months in prison.
Thomas Mario Costanzo, also known as Morpheus Titania, has been sentenced to “41 months’ imprisonment, with credit for time served since his arrest in April 2017,” the notice reads. “Costanzo was found guilty by a federal jury on March 28, 2018, of money laundering.”
The 54-year-old Arizona resident advertised on Localbitcoins, a peer-to-peer bitcoin exchange website, “that he was willing to engage in cash transactions up to $50,000,” the DOJ described, stating:
When undercover federal agents approached Costanzo and told him that they were drug dealers, Costanzo provided them with bitcoin and told them it was a great way to limit their exposure to law enforcement.
81 Bitcoins Forfeited
The jury learned at trial that, over the two-year period, “Costanzo took $164,700 in cash…from the agents,” according to the DOJ’s statement.
The agents claimed that Costanzo then “exchanged it for bitcoin in order to conceal and disguise the nature, location, source, ownership, and control of the drug proceeds.” The Justice Department further noted that “the evidence at trial also showed that Costanzo used bitcoin to purchase drugs from others and that he provided bitcoin to individuals who were buying drugs via the internet,” elaborating:
At the sentencing hearing Judge Snow also ruled on the forfeiture of the 80.94512167 bitcoins provided by Costanzo to the undercover agent.
The agency elaborated, “The current value of the forfeited bitcoins is more than $600,000,” adding that “Costanzo had previously claimed an interest in 49.99363132 of the seized bitcoins, and his interest was forfeited at the sentencing hearing.”
Third Party Under Investigation
In addition, the US government separately investigated Dr. Peter Steinmetz for engaging in an unlicensed bitcoin trading business. He supplied more than 30 BTC to Costanzo.
The agency agreed not to prosecute Steinmetz “for his prior bitcoin trading activity,” as he agrees “that going forward, and for the next two years, he will only purchase or sell virtual currency on exchanges registered with the Financial Crimes Enforcement Network, also known as Fincen.” The Justice Department clarified:
Dr. Peter Steinmetz has agreed to forfeit the remaining 30.95149035 bitcoins, and to also forfeit an additional $54,000 in U.S. currency.
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Images courtesy of Shutterstock and the DOJ.
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