Santa Monica Man Pleads Guilty to Using Cryptocurrency Exchange for Money Laundering

Summary

Charles James Randol, a 33-year-old resident of Santa Monica, has agreed to plead guilty to charges of using his cryptocurrency exchange business to help scammers and drug traffickers launder millions of dollars. The charges were filed on September 5 in a Los Angeles federal court, and Randol is expected to make his formal plea in the near future.

Details

According to the plea agreement, Randol owned and operated a virtual-currency money services business called Bitcoins4Less and later Digital Coin Strategies LLC from October 2017 to July 2021. His services included cryptocurrency exchange through ATMs, postal services, and in-person transactions. However, Randol failed to verify the identities of clients who conducted transactions exceeding $10,000, violating regulatory requirements.

Failure to Adhere to Regulatory Requirements

• Randol did not verify the identities of his clients, which is required by the Bank Secrecy Act.
• He facilitated suspicious currency exchange transactions and concealed them from law enforcement.
• His actions repeatedly violated federal law and his company’s own policies.

Advertisement and Misrepresentation

Randol advertised his services on his website and third-party sites, falsely claiming that Digital Coin Strategies was a fully compliant FinCEN registered money services business. He posted an anti-money laundering policy on his website, promising to prevent money laundering and comply with federal law.

Money Laundering Methods

Randol operated a network of automated kiosks in Los Angeles, Orange, and Riverside counties, allowing criminals to launder funds through cash-to-Bitcoin conversions. He also met with anonymous customers in person and utilized the postal service for Bitcoin-for-cash transactions. The cash received was often packaged in a suspicious manner, such as hidden inside children’s books or concealed within fake presents.

Investigation and Consequences

In June 2019, fraud proceeds were mailed to Randol’s post office, leading to an FBI inquiry. Shortly after, Randol announced a hiatus from converting cash parcels into cryptocurrency. However, he later agreed to exchange $10,000 in cash for Bitcoin for an anonymous client. If convicted, Randol faces up to five years in federal prison and a fine of up to $250,000 or twice the total illicit proceeds from the scams.