Bitcoin company earns illegal money by using unlicensed kiosks
Fingers have been pointed at a bitcoin company and its executives over allegations of operating unlicensed cryptocurrency kiosks in Ohio, profiting from premeditated fraud.
S&P Solution, which operated as Bitcoin of America, along with three of its executives, have been charged with money laundering, conspiracy, as well as other offenses linked to operating more than 50 unlicensed cryptocurrency kiosks in the state. cointelegraph.com/bitcoin-price
On March 1, a Cuyahoga County grand jury reinstated the indictment against the company, owner and founder, Sonny Meraban, general manager Reza Meraban, and company attorney William Suriano; The three were arrested last week and search warrants were issued for their homes in Florida and Illinois.
3 men, 1 business charged in cryptocurrency scam; avoid Bitcoin of America ATMs, Cuyahoga Co. prosecutor says https://t.co/LaR1L2E1yH
— News 5 Cleveland (@WEWS) March 2, 2023
According to prosecuting attorney Andrew Rogalski, the scammers impersonating policemen, who also sent the scam automated messages, took advantage of weak anti-money laundering measures in the company’s systems to transfer funds from users’ cryptocurrency wallets.
“ATMs are built for scammers,” Rogalski commented during the press conference, adding:
Said devices direct victims, who are often the elderly or other vulnerable groups, to go specifically to Bitcoin of America ATMs to take money they want to withdraw from their savings and 401K accounts.
He explained that they are then instructed to deposit money in the machine in exchange for placing bitcoins in a wallet that they believe is theirs, but they cannot control it at all.
On one occasion, he added, an elderly man lost $11,250 in less than an hour, after making three transfers using an unlicensed kiosk.
At the same time, the company claimed to have taken a 20% transfer fee after each transfer, and continued to do so during the entire course of the fraudulent operation.
The said indictment also alleged that the company operated on “written misrepresentations relating to the nature of its business given to government agencies,” which helped it operate the kiosks without obtaining a money transfer license, according to a report by Law360 on March 3.
Related articles: Crypto ATMs emerging as popular method for crypto scam payments — FBI
Authorities seized 52 bitcoin ATMs last week, but the company has more such machines in Ohio and other states. Rogalski said that Bitcoin of America made $3.5 million in money deposited in these unlicensed kiosks in 2021.
Officials believe the company has been evading regulatory controls and compliance requirements in the financial sector since 2018.
The CIA’s Cyber Fraud and Money Laundering Task Force is reportedly leading the investigation against the company and its executives.
In October, the FBI’s Miami field office warned that cryptocurrency ATMs have become a common way for scammers to steal from users, amid a rise in “piggy-slaughter” scams.