A Bitcoin technology company and its officials have been charged with operating unlicensed cryptocurrency kiosks in Ohio that intentionally profited from victims of cryptocurrency fraud.
S&P Solutions, which operated as Bitcoin of America, and three of its executives are accused of money laundering, conspiracy, and other offenses in connection with the operation of more than 50 unauthorized cryptocurrency kiosks across the state.
On March 1, a Cuyahoga County grand jury indicted the firm, its owner and founder, Sonny Meraban, manager Reza Meraban, and company attorney William Suriano. This Monday, the trio was apprehended, and search warrants were served at their homes in Florida and Illinois.
According to prosecuting attorney Andrew Rogalski, romance fraudsters, law enforcement impersonators, and “robocalls” used the firm’s systems’ lack of anti-money laundering safeguards to transfer funds out of consumers’ crypto wallets.
During a news conference, Rogalski stated that “these ATMs are ready-made for scammers,” adding that they:
“Direct the victims, which are often elderly or otherwise vulnerable, to specifically go to Bitcoin of American ATMs, take money that they’ve withdrawn from their savings accounts or 401Ks.”
Users are then instructed to deposit cash into the machine in exchange for BTC in a wallet they believe is theirs but over which they have no control, he continued.
He went on to say that in one case, an elderly guy lost $11,250 in three transactions to one of the shady kiosks in less than an hour due to this scam.
Nonetheless, the corporation allegedly pocketed a 20% transfer charge each time this occurred, and it continued to do so even after it was discovered that the transactions were fake.
According to a March 3 Law360 story, the indictment also accuses the corporation of being able to function due to “written misrepresentations describing the nature of their business to regulatory institutions,” which allowed it to run the kiosks without a money transfer license.
This week, authorities seized 52 Bitcoin ATMs, but the company has more in Ohio and other states. According to Rogalski, Bitcoin of America profited $3.5 million from cash deposits at these illegal kiosks in 2021.
Officials suspect the firm has been functioning since 2018 while dodging regulatory safeguards and financial compliance obligations.
The US Secret Service’s Cyber Fraud and Money Laundering Task Group is said to have led the investigation against the corporation and its leaders.
The FBI’s Miami Field Office warned in October that cryptocurrency ATMs were becoming a popular vehicle for scammers to swindle victims in a growing trend of “pig butchering” schemes.
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