Money Laundering as a Service. Cash to cryoto currency Bureau de Change owner pleads guilty.

News Desk

The owner of a business that exchanged crypto-currency for cash has pleaded guilty to US Federal Charges that he failed to maintain an effective money laundering control system.

According to the US Department of Justice "Randol offered his cryptocurrency exchange services in various ways, including meeting anonymous customers in-person to complete transactions, controlling and operating a network of automated kiosks in Los Angeles, Orange, and Riverside counties that converted cash to Bitcoin and vice versa, and conducting Bitcoin-for-cash transactions for unknown individuals who mailed large amounts of U.S. currency to him, including to post office boxes that he controlled."

He maintained a website that falsely claimed that his business which at various times was known by various names was “a fully compliant…money services business” that was registered with the Financial Crimes Enforcement Network, a bureau of the United States Treasury Department.

Randol frequently conducted in-person cash transactions that exceeded USD10,000 with anonymous or pseudo-anonymous individuals, including people who Randol knew only as “Puppet Shariff,” “White Jetta,” “Aaavvv,” “Aaaa,” “Yogurt Monster,” and “Hood.” In his plea agreement, Randol admitted to engaging in three specific transactions from October 2020 to January 2021 in which he exchanged a total of USD273,940 in cash for Bitcoin without requesting a name, proof of identity, Social Security number, or any other information about the buyer or the source of the funds being exchanged.

The company did, in fact, have a formal policy that required the identification of anyone undertaking transactions exceeding USD9,999,000 - a policy that seemingly confused identification requirements with those of the making of cash transaction reports.

But that wasn't all. "Randol also conducted hundreds of Bitcoin-for-cash transactions after receiving large cash shipments in the mail from anonymous individuals. In a typical transaction, an anonymous individual would text Randol using an encrypted platform to notify him that a parcel containing cash had been sent to a location that Randol controlled in or around Los Angeles. Once Randol received the parcel, he would count the money and send an equivalent amount of Bitcoin – minus a commission – to a digital wallet controlled by his customers."

It was worse: blatantly suspicious activity went unreported - "When Randol received the packages, the cash was often packaged in a suspicious manner, including cash hidden inside children’s books, concealed inside fake birthday or holiday presents, buried within puzzle pieces, or wrapped within multiple magazines."

The fact that Randol will be convicted of only one sample charge seems incredible because what has gone before is only a part of his money-laundering-as-a-service empire. The Department of Justice says "Because to Randol’s deficient AML practices, criminals were also able to structure and launder funds through his Bitcoin kiosks. Specifically, Randol operated numerous Bitcoin kiosks, which were in malls, gas stations, and convenience stores in cities such as Los Angeles, Glendale, Santa Clarita, Huntington Beach, Santa Ana, and Riverside. But the setting on Randol’s kiosks allowed customers to structure funds to avoid currency reporting requirements by creating numerous accounts and by engaging in successive transactions involving up to USD3,000. He also set up one or more “test” accounts that contained no customer information, which he allowed customers to use to complete kiosk transactions."

When Randol recruited a compliance officer, he ignored strong warnings about his conduct including specific advice that some practices were illegal.