Kais Mohammad, aka “Superman29,” will plead guilty to federal charges of money laundering, operating an unlicensed money transmitting business and failure to maintain an effective anti-money laundering program, according to a report.
From December 2014 to November 2019, Mohammad took fiat currency in person from customers and used bitcoin ATMs to launder the cash. He admitted to laundering $15 million to $25 million during the time period.
When Mohammad began operating his bitcoin ATMs in 2014, he intentionally did not register his firm with the Financial Crimes Enforcement Network, according to the report. He also failed to report suspicious transactions and didn’t develop or maintain an anti-laundering program. When contacted by FinCEN in July 2018, Mohammad registered his firm, but never complied with any FinCen regulations. After his arrest, he admitted he knew at least one of his clients was engaged in criminal activity on the Dark Web.
Mohammad operated the bitcoin ATMs under the name ‘Herocoin.’ The machines were located near gas stations, malls and convenience stores in Los Angeles, Orange, Riverside and San Bernardino counties, giving customers easy access to buy and sell bitcoin in exchange for fiat.
As part of the investigation, undercover agents conducted multiple transactions on Herocoin ATMs that were not reported by the firm. The agents also conducted multiple in-person transactions with Mohammed.
In August 2019, one of the undercover agents met Mohammad, gave him $16,000 dollars in cash and said the funds had been earned through illegal activity. The agent received 1.58592 bitcoin in return, but Mohammad did not report the transaction to FinCen.
Mohammad faces a maximum of 30 years in federal prison, and, as part of the plea agreement, has agreed to forfeit cash, cryptocurrency and the 17 Bitcoin ATMs he operated.