But in 2017, prosecutors say, Boden and some employees began running an illicit money-laundering business on the side. The Geek Group closed in late 2018 after its lab was raided by federal agents.
‘Cryptocurrency is not a license or invitation to commit crime.’ — Andrew Birge, U.S. attorney for the Western District of Michigan
On Monday, Boden, who was also known as the “Captain,” pleaded guilty to operating an unlicensed money-transmitting business, money laundering and structuring deposits to evade financial institution reporting requirements.
His co-defendants, Daniel “Danichi” DeJager, 35, of Tacoma, Wash., who worked as a consultant for the Geek Group and Leesa “Moose” Vogt, 37, of Grand Rapids, who was the group’s executive director, pleaded guilty to related charges.
Boden and DeJager face up to 20 years in prison. Vogt faces a maximum of 10 years. All are scheduled to be sentenced in February
Boden’s attorney, Brian Lennon, said his client had turned to bitcoin as a way to raise money to help finance his struggling science center.
“He sold it to others at a small profit, to help pay the mortgage for the building, keep the utilities on, and to pay for education programming at the Geek Group,” Lennon said. “Despite the loss of his life’s work, his company, staff, reputation and nearly everything he owns Mr. Boden continues working to this day to educate, inspire and entertain anyone with a sincere and passionate desire to learn about science and technology.”
Attorneys for DeJager and Vogt declined to comment.
Prosecutors said that in early 2017, Boden began letting it be known that he would exchange bitcoin for cash with no questions asked. Between then and December 2018, prosecutors say the group exchanged $740,000, some of which they were aware, according to prosecutors, had come from the sale of controlled substances.
“The defendant would tell customers that he sold ‘clean’ bitcoin that could not be traced to them, unlike licensed exchanges, which the defendant said sold ‘dirty bitcoin,’ ” according to Boden’s plea agreement.
The operation was ultimately undone when an undercover FBI agent posing as a drug dealer approached Boden, who agreed to exchange $15,000 in cash for bitcoin for a 15% fee, according to court documents.
Prosecutors say the scheme involved DeJager’s purchasing bitcoin and then putting it through a process called mixing, in which it would be commingled with other bitcoin with the end result being that its ownership would be obscured.
Boden would then take the bitcoin and sell it in exchange for cash. The cash would then be deposited into accounts in amounts less than $10,000 in order to avoid triggering banking reporting requirements.
In the U.S., anyone who regularly exchanges cryptocurrency for others is required to register as a money transmitter with banking regulators, something Boden did not do, prosecutors said. Boden’s lawyer said his client initially didn’t think he was required to register his operation as he was only engaging in small transactions. When Boden later realized he needed to, he discovered he could not afford the required fees, his attorney said.
“Cryptocurrency is not a license or invitation to commit crime,” said Andrew Birge, the U.S. attorney for the Western District of Michigan. “Federal law regulates those who deal in cryptocurrency as it does those who deal in government-issued currency. We will root out and prosecute crypto criminals wherever we find them.”
After the 2018 raid on the Geek Group’s headquarters, Boden posted on Facebook that the lab had been struggling financially for years, and could no longer continue.
“We never found a way to do it and make enough revenue to sustain it,” he wrote. “We tried, some of us for decades, and ultimately failed. We’ve been broke as a joke for years and stumbled through, but with the recent PR hit from being raided by four different federal agencies while being unable to actually tell people the truth about why, we’ve finally hit the wall.”
Source : https://www.msn.com/en-us/news/crime/owner-of-nonprofit-science-lab-for-children-admits-running-secret-bitcoin-money-laundering-operation-for-drug-dealers/ar-AAPJ8ua740