Bitcoin Launderer Gets 6 Years for Unlicensed Crypto Scheme

Danvers Man Sentenced to 6 Years for Running Illegal Bitcoin Business

A Massachusetts man who operated a covert cash-to-Bitcoin service without a license has been sentenced to six years in federal prison. Trung Nguyen, of Danvers, was convicted of running a “no questions asked” cryptocurrency exchange that prosecutors say facilitated money laundering and scams.

Nguyen, 41, was sentenced by U.S. District Judge Richard Stearns in Boston and ordered to serve an additional three years of supervised release. He must also forfeit $1.5 million in proceeds connected to the scheme, according to the U.S. Attorney’s Office.

Between September 2017 and October 2020, Nguyen ran an unlicensed money-transmitting business called National Vending. Under the guise of a vending machine company, he used tactics learned from an online course to conceal the true nature of his operations. These included using fictional supplier lists, avoiding the word “Bitcoin,” and breaking up large deposits to evade banking regulations.

Prosecutors say Trung Nguyen operated a fake vending machine business to obscure the cash deposits he was receiving. Source: Pacer

Authorities say Nguyen catered to various clients, including scam victims coerced into converting cash to Bitcoin and a drug dealer who funneled $250,000 through him across 10 transactions. In total, Nguyen exchanged over $1 million into Bitcoin, charging more than 5% commission, and failed to register with the Financial Crimes Enforcement Network (FinCEN) as required by federal law.

He also did not file legally mandated Suspicious Activity Reports or Currency Transaction Reports for transactions exceeding $10,000.

Nguyen’s downfall came after he was caught accepting cash from undercover officers during sting operations. He used encrypted messaging and deliberately structured bank deposits to avoid detection.

Although Nguyen pleaded not guilty in June 2023, a jury found him guilty in November of operating an unlicensed money-transmitting business and one count of money laundering. He was acquitted of a second money laundering charge.