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  • Writer's pictureJamal Saafir

FBI Charges 6 for Alleged Illegal Money Transmission Using Crypto

According to a report from CoinDesk, the FBI has brought charges against six people accused of allegedly operating an illegal $30 million money-transmitting business using crypto, according to court documents filed Wednesday, October 18th in the Southern District of New York.

The accused – Shaileshkumar Goyani, Brijeshkumar Patel, Hirenkumar Patel, Naineshkumar Patel, Nileshkumar Patel, and Raju Patel – conducted business without a proper money transmitting license in New York, according to the filing.

Daniel A. Hochheiser, lawyer for Goyani, says the allegations against his client are unproven.

“If and when a grand jury issues an indictment, Goyani will enter a not guilty plea.”

The details of the unsealed affidavit of an FBI agent planning their arrest, state that between July 2021 and September 2023 they performed the illegal business by using the dark web to convert bitcoin or other cryptocurrencies into fiat.

A United States Magistrate has granted the conditional release of at least one of the entities charged, Naineshkumar Patel, according to a court document.

The filing cites an unidentified co-conspirator as saying that at least some clients "made money by selling drugs" and that the affluent clients "were hackers." The co-conspirator disclosed to an undercover officer that he had made approximately $30 million over a three-year period through the exchange of fiat for digital currency.

On February 7th, 2023, law enforcement apprehended an individual who had been sending packages of cash on behalf of the unnamed co-conspirator from a post office in Westchester County, New York. The arrested individual would later become a confidential informant and for the following eight months cooperate with law enforcement in roughly 80 controlled pick-ups of cash amounting to nearly $15 million.

The filing is supported by photographic and video surveillance of the accused in the act alleging that the defendants are not registered and do not possess a licensed money-transmitting business, which is mandatory in New York.

According to a report from The Daily HODL, FBI Special Agent Lawrence Lonergan says the business violates state and federal laws.

“By failing to register with FinCEN (Financial Crimes Enforcement Network), a money-transmitting business prevents the Treasury from ensuring that the business is properly filing CTRs (currency transaction reports) and SARs (suspicious activity reports).

This has the effect of allowing unregistered money transmitting businesses to operate as a shadow bank through which funds can pass without being subjected to the scrutiny that Congress has sought to impose upon the United States financial system.”

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