This gives a whole new meaning to the idea of washing money.
A New York City man has been charged with allegedly running a network of illegal bitcoin ATMs in laundromats aimed at customers involved in criminal activities looking to anonymously launder money.
Robert Taylor, 35, allegedly completed $5.6 million in transactions in one year, charging customers fees of up to 25% to convert their cash to bitcoin BTCUSD,
Taylor allegedly operated 46 bitcoin kiosks in New York, New Jersey and Miami, mostly located in laundromats, according to an indictment announced Wednesday.
He justified the high fees to customers by stressing that his operation asked no questions and guaranteed anonymity, prosecutors said.
“Bro we gotta maintain everyone’s privacy. It’s worth the money,” prosecutors say the business wrote on Snapchat SNAP,
“Robert Taylor allegedly went to great lengths to keep his bitcoin kiosk business as secret as possible to attract a clientele that would pay top dollar for anonymity,” said Manhattan District Attorney Alvin Bragg.
Taylor was indicted on charges of operating an unlicensed money transmission business, criminal tax fraud and offering a false instrument for filing. A message left with Taylor’s attorney wasn’t immediately returned.
Taylor’s business was not licensed with the New York State Department of Financial Services or the U.S. Treasury Department of the Treasury, prosecutors said. It also didn’t require customers to show ID or answer any of the “know your customer” questions that banks are required to ask under law.
“We never ask for ID or have a camera that takes a pic of your face,” one customer was allegedly told, according to prosecutors.
The only identifying information on Taylor’s kiosks was a Snapchat icon, which linked to an anonymous Snapchat account that was connected only to a pre-paid burner phone and an encrypted Proton email account, prosecutors said. The Snapchat channel told customers not to tell anyone about the location of the ATMs. “We need to stay hidden,” the company said.
Snapchat did not respond immediately to a request for comment.
Investigators seized $250,000 in cash from Taylor’s Manhattan penthouse and $44,000 from 20 of the bitcoin ATMs. They also said they found a sketch in his apartment of two men installing a bitcoin kiosk at a laundromat.
Forensic analysis of Taylor’s kiosks showed that more than $5.6 million in cash was deposited between September 2017 and November 2018, generating more than $590,000 in fees. Prosecutors say Taylor then attempted to defraud the IRS, by claiming income of only $3,000 in 2017, and a loss of $140,000 in 2018.
Surveillance video and records obtained during the investigation showed that at least one of Taylor’s customers arrived at an ATM driving a stolen U-Haul truck. Others had recent criminal records related to the sale of drugs or credit card theft, prosecutors said.