US police have seized 18 cryptocurrency ATMs that were purchased with fraudulent Small Business Administration (SBA) loans intended to help small businesses financially hurt by the Covid-19 pandemic. The loans were also used to buy bitcoins from a New York-based cryptocurrency exchange, the US Department of Justice (DOJ) said.
Coindawg Crypto ATMs Seized
The US Department of Justice (DOJ) announced Thursday that Charles Riley Constant, also known as Chuck Constant, has been arrested “on charges related to a scheme to steal and launder more than $1 million in fraudulently obtained loans.” from the Small Business Administration (SBA), including the use of fraud proceeds to purchase cryptocurrency ATMs.” The Department of Justice detailed:
Law enforcement agents seized, among other things, 18 cryptocurrency ATMs in Texas and Oklahoma that Constant purchased with fraudulent proceeds to start a cryptocurrency ATM business called ‘Coindawg LLC’, as well as the website of Coindawg.
The DOJ explained that Constant and his accomplices created false identities and businesses to obtain seven SBA Economic Injury Disaster Loans beginning in the fall of 2020. The funds were intended to help small businesses financially hurt by the Covid-19 pandemic. 19.
Constant used about $700,000 of the fraudulently obtained SBA loans to buy bitcoin (BTC) of a New York City-based cryptocurrency exchange, the Justice Department further noted.
The Department of Justice continued:
To date, Coindawg has traded over $3,000,000 worth of cryptocurrency and charged 15% in transaction fees.
Constant, 54, of Allen, Texas, has been charged with one count of conspiracy to commit money laundering, one count of theft of public money and one count of interstate receipt of stolen money. If convicted, she faces a maximum sentence of 20 years in prison for conspiracy to commit money laundering and 10 years each for theft of public money and interstate receipt of stolen money.
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