Newsletters
Customer Relationship Management News NewsFactor Sites:       NewsFactor.com     Enterprise Security Today     CRM Daily     Business Report     Sci-Tech Today  
   
Home CRM Systems Customer Service Business Intelligence Sales & Marketing More Topics...
After Hours
24/7/365 Network Uptime
Average Rating:
Rate this article:  
Bitcoin Operators Charged for Money Laundering
Bitcoin Operators Charged for Money Laundering

 
January 29, 2014 9:39AM

Bookmark and Share
Prominent bitcoin world figure Charlie Shrem was arrested and charged in connection with a money-laundering conspiracy that allegedly funneled more than $1 million of the digital currency to users of the online black-market site Silk Road. Another man, Robert Faiella, also was arrested. The men are accused of facilitating anonymous drug sales.
 


The top executive of a New York City-based Bitcoin company and a Florida Bitcoin exchanger have been charged with conspiring to commit money laundering by selling more than $1 million in Bitcoins to users of the black market Web site Silk Road, authorities said Monday.

Charlie Shrem, 24, the chief executive officer of BitInstant and vice chairman of a foundation that promotes the Bitcoin currency system, was arrested Sunday at New York's Kennedy Airport, and Robert Faiella was arrested Monday at his Cape Coral, Florida, residence, prosecutors said.

Faiella and Shrem conspired to sell more than $1 million in Bitcoins to criminals who wanted to sell narcotics on Silk Road between December 2011 and October, U.S. Attorney Preet Bharara said in a release.

"Truly innovative business models don't need to resort to old-fashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act," Bharara said.

Over the objection of prosecutors, U.S. Magistrate Judge Henry B. Pitman allowed Shrem to be released on bail, though he required him to submit to electronicmonitoring and live with his parents in Brooklyn. They were required to post nearly $1 million in property as collateral.

Assistant U.S. Attorney Serrin Turner said Shrem "has held himself out as a `Bitcoin millionaire'" who was ready to flee rather than face charges that could put him in prison for nine to 11 years.

Turner said the nature of the Bitcoin industry meant that Shrem had a "storage locker in the clouds" with money to facilitate flight. He added that Shrem had traveled internationally 16 times since 2007, with most of the trips in the past two years to places including the Netherlands, Turkey, Panama, Aruba and Mexico.

Turner played a video interview of Shrem posted online in which the Manhattan resident boasted that if the government tried to make arrests or take down companies that promote the use of Bitcoin, "I have a plane ticket ready to take me to Singapore. There's another corporation already set up."

Shrem's defense lawyer, Keith Miller, said there were other videos of his client saying that everybody involved with virtual currency should comply with the law. In setting bail conditions, Pitman said he appreciated that "sometimes people make statements on video that may or may not carry weight."

As the bearded Shrem entered court in a sweatshirt with a hood on it, he waved to his family and nodded toward his girlfriend. Miller challenged a report from authorities that claimed Shrem had $6 million in assets, saying it apparently counted money that a company his client supported hoped to raise from investors. (continued...)

1  |  2  |  Next Page >

 


© 2014 Associated Press under contract with NewsEdge. All rights reserved.
 

Tell Us What You Think
Comment:

Name:

Jenna:

Posted: 2014-02-01 @ 10:41am PT
Everybody is making money with Bitcoin. It was $4 just last year and rose to over $1200.

There's plenty of media hype surrounding the currency but nobody really tells you the whole story.

Do yourself a favor and find out the Secrets of Bitcoin.

http://bit.do/BitCoinSecrets

jp11101:

Posted: 2014-01-31 @ 10:21am PT
Rickards is correct. When is Mainstream Media going to start covering this obvious case of selective prosecution by the Obama Administration/DOJ? See: http://libertyblitzkrieg.com/2014/01/27/some-money-launderers-are-more-equal-than-others-part-2-ceo-of-bitinstant-is-arrested/

How many Billions of US Dollars did HSBC launder for the Mexican Drug Cartels without a single Gangster Bankster C-suite executive being investigated or indicted by Obama’s Attorney General? See: http://www.bloomberg.com/news/2013-07-02/hsbc-judge-approves-1-9b-drug-money-laundering-accord.html

======
Jim Rickards: ‏now Stalin's NKVD police chief, #Beria, said "show me the man, and I'll find you the crime." Obama case v BitCoin execs is a case in point.

THE FEDS WILL GO AFTER AND SQUASH ANY CURRENCY (DIGITAL OR GOLD/SILVER) THAT COMPLETES WITH THEIR PHONY BALONEY BACKED-BY-NOTHING US DOLLAR SCAM

======



Your Next Generation Data Center Is Here! Vblock™ Systems: the world's most advanced converged infrastructure are built on the Cisco Unified Computing System with Intel® Xeon® processors. Vblock™ Systems deliver extraordinary time to market, ROI and TCO, and flexibility to meet your continually changing demands with 5X faster deployment, 96% less downtime, and 1/2 the cost. Click here to learn more.


 After Hours
1.   Study: Samsung Phone vs. iPhone
2.   Criterion Extends Hulu Streaming Deal
3.   Review: Galaxy S5 Features Useful
4.   French IT Staff Get Right To Unplug
5.   Roku Streaming Stick Packs a Punch


advertisement
A $200 'Micro' 3D Printer Earns Big
Kickstarter-funded, it could help biz.
Average Rating:
Review: Galaxy S5 Features Useful
Enough to give Samsung another hit.
Average Rating:
Roku Streaming Stick Packs a Punch
Small device for a crowded market.
Average Rating:
Product Information and Resources for Technology You Can Use To Boost Your Business

Network Security Spotlight
IBM Offers Security, Disaster Recovery as SoftLayer Service
New disaster recovery and security services for SoftLayer clients are being added by IBM. Big Blue said the new capabilities will speed cloud adoption by alleviating concern over business continuity.
 
How To Beat the Heartbleed Bug
Heartbleed headlines continue as IT admins scramble for answers no one has. Early reports of stolen personal data, including 900 social insurance numbers in Canada, are starting to trickle in.
 
After Heartbleed, OpenSSL Calls for More Support
The president of the OpenSSL Foundation says more support is needed from companies and governments that use its software so that it can better spot and fix flawed pieces of code such as Heartbleed.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
Google Glass may find its first markets in verticals in which hands-free access to data is a boon. Medicine is among the most prominent of those, as seen in a number of Glass experiments under way.
 

Mobile Technology Spotlight
Amazon 3D Smartphone Pics Leaked
E-commerce giant Amazon is reportedly set to launch a smartphone after years of development. Photos of the phone, which may feature a unique 3D interface, were leaked by tech pub BGR.
 
Zebra Tech Buys Motorola Enterprise for $3.45B
Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 million, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal.
 
CTIA Caves, Volunteers Kill Switch Plan
After bucking against the concept of a smartphone kill switch, the CTIA just announced the “Smartphone Anti-Theft Voluntary Commitment” to thwart smartphone thefts in the U.S.
 

Navigation
CRM Daily
Home/Top News | CRM Systems | Customer Service | Business Intelligence | Sales & Marketing | Contact Centers | Customer Data | CRM Press Releases
NewsFactor Network Enterprise I.T. Sites
NewsFactor Technology News | Enterprise Security Today | CRM Daily

NewsFactor Business and Innovation Sites
Sci-Tech Today | NewsFactor Business Report

NewsFactor Services
FreeNewsFeed | Free Newsletters | XML/RSS Feed

About NewsFactor Network | How To Contact Us | Article Reprints | Careers @ NewsFactor | Services for PR Pros | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 NewsFactor Network. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.