A Bitcoin (BTC) technology company and its executives have been charged with allegedly operating unlicensed cryptocurrency kiosks in Ohio that knowingly profited from victims of cryptocurrency scams.
S&P Solutions, doing business as Bitcoin of America, along with three of its executives face charges of money laundering, conspiracy and other crimes related to the operation of more than 50 unlicensed cryptocurrency kiosks in the state.
A Cuyahoga County grand jury returned the indictment March 1 against the company, owner and founder Sonny Meraban, manager Reza Meraban and company attorney William Suriano. The trio were arrested last week and search warrants were executed at their residences in Florida and Illinois.
3 men, 1 company charged with cryptocurrency scam; avoid Bitcoin of America ATMs, Cuyahoga Co. prosecutor says https://t.co/LaR1L2E1yH
— News 5 Cleveland (@WEWS) March 2, 2023
According to prosecutor Andrew Rogalski, romance scammers, law enforcement impersonators and “robocallers” exploited the lack of anti-money laundering protections in the company’s systems to transfer funds from users’ crypto wallets. .
Rogalski commented during a press conference that “these ATMs are ripe for scammers,” adding that:
“Direct victims, who are often elderly or vulnerable, to specifically go to Bitcoin from US ATMs, take the money they have withdrawn from their savings or 401K accounts.”
They are then instructed to put the cash in the machine in exchange for BTC in a wallet they believe is theirs but over which they have no control, he explained.
He added that, in one case, an elderly man lost $11,250 in three transactions at one of the dubious kiosks in less than an hour due to this scam.
Meanwhile, the company allegedly pocketed a 20% transfer fee each time this occurred and continued to do so even after learning they were fraudulent.
The indictment also accuses the company of being able to operate because of “written misrepresentations about the nature of its business to government agencies,” helping it operate the kiosks without a money transfer license, according to a March 3, law360.
Related: Crypto ATMs Emerge as a Popular Method for Crypto Scam Payments: FBI
Last week, 52 Bitcoin ATMs were seized, but the company has more in Ohio and other states. Bitcoin of America made $3.5 million in profit from cash deposits at these illegal kiosks in 2021, Rogalski said.
Officials believe the company has been operating and evading regulatory safeguards and financial compliance requirements since 2018.
The investigation into the company and its executives was reportedly spearheaded by the United States Secret Service Anti-Money Laundering and Cyber Fraud Task Force.
In October, the FBI’s Miami field office warned that crypto ATMs were becoming a popular vehicle for scammers to defraud victims in a growing trend of “pig slaughter” scams.
