Following an investigation conducted by Immigration and Customs Enforcement, Homeland Security Investigations, and the US Postal Inspection Service, Richard Petix, of Rochester, NY, has been charged with unlawfully operating a bitcoin-exchange business that sold approximately $200,000 in bitcoins.
According to the press release, Petix, on supervised release for a 2009 federal child pornography conviction, conducted a bitcoin sale with an undercover federal agent, transferring approximately $13,000 to the agent using his laptop computer and smartphone. But when confronted by federal probation officers, Petix lied about the ownership of the gadgets, claiming that the laptop and smartphone were not his. He faces five years in prison on each of his charges.
“Between August 2014 and December 3, 2015, Petix is accused of unlawfully operating a bitcoin-exchange business that sold approximately $200,000 in bitcoins”, it added.
In a separate indictment, Zhe Wang and Kevin Szura, both of Queens, NY, have been charged with conspiracy to distribute controlled substances, money laundering conspiracy, money laundering, and conducting a monetary transaction in criminally derived property. Wang and Szura conspired to purchase and attempt to purchase approximately $74,000 in bitcoins. They allegedly used proceeds of drug sales to buy the bitcoins, and then used the bitcoins to buy bulk quantities of drugs off the dark web for further distribution. Wang and Szura face up to 20 years in prison.
The release said that during the time of arrest, Wang and Szura were attempting to purchase approximately $8,000 in bitcoins to buy more Xanax. They had a total of over $30,000 in their possession.
Defendant Petix will be arraigned before U.S. Magistrate Judge Hugh B. Scott on March 15, 2016 at 10:00 a.m. Defendants Wang and Szura were arraigned before U.S. Magistrate Judge Michael J. Roemer on March 10, 2016.
“This case demonstrates the ever-growing ways in which the virtual world is intersecting with, and being exploited by, real life crime and criminals,” said U.S. Attorney William J. Hochul Jr. “Those involved in such illicit activities should know that law enforcement is prepared to track them into the deep and dark portions of the web in order to bring criminals to justice.”
