A Los Angeles trader on LocalBitcoins who goes by the name “Bitcoin Maven” is facing up to 30 months in prison for running an illegal money transmitting business.
NBC Los Angeles claims fifty-year-old Theresa Tetley made at least $300,000 a year trading on the platform, with a transaction volume of $6 million to $9.5 Million between 2014 and 2017.
According to court documents, she has already pleaded guilty for conducting a particular transaction worth $80,000 involving proceeds of drug trafficking. Tetley has also been accused of failing to comply with federal registration requirements for a money transmitting service.
Describing Tetley’s business, the official court documents said she:
“Fueled a black-market financial system in the Central District of California that purposely and deliberately existed outside of the regulated bank industry.”
The government has asked US District Judge Manuel Real to sentence her with 30 months of prison time, while Tetley’s defence lawyer has asked only for 12. They’ve also asked for the forfeiture of 40 Bitcoins (currently worth around $270,000), $292,264 in cash, and 25 gold bars seized during the bust on March 30 this year.
This is not the first time a trader has seen jail-time for trading large volume of bitcoin on LocalBitcoins. In fact, early this year, Morgan Rockcoons, CEO of Bitcoin, Inc. was arrested by officials from US Immigration and Customs Enforcement (ICE) at his home in Las Vegas, Nevada. He was also charged with operating an unlicensed money transmitting business and money laundering. He had exchanged 10 Bitcoins for $10,000 back in Dec. 2017 with undercover agents.
In another incident late last year, 52-year-old Michigan man Bradley Anthony Stetkiw was charged with running an unlicensed money transmitting business after selling nearly $150,000 worth of bitcoin between 2013 and 2015, out of which $56,000 worth of transactions were with conducted undercover agents. Stetkiw, like the others, primarily used LocalBitcoins to arrange trades.
LocalBitcoins acts as an escrow service, connecting buyers and sellers directly. Since it is not an exchange by itself and not based out of the US, it has not followed KYC and other requirements needed for exchanges. However, this has led to trouble for traders who’ve done a large volume of transactions without reporting to the necessary government agencies.
It is not clear if agents went undercover to entice Tetley. However, she is likely set to serve some prison time because she’s already confessed to her crimes.
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Last modified: May 20, 2020 8:41 PM UTC