Cryptocurrency including Bitcoin was allegedly used to launder more than $5.35 million for a drug trafficking organization in a conspiracy that included the reported distribution of counterfeit pharmaceutical pills and other controlled substances.
John Khuu, 27, from San Francisco, California, was indicted on charges of money laundering conspiracy by a federal grand jury, the Department of Justice said in a release on Friday (Oct. 7). The indictment handed down by U.S. Magistrate Judge John D. Love alleged that Khuu and others conspired to launder drug trafficking proceeds through cryptocurrency.
Using the dark web as a marketing portal, Khuu is accused of distributing fake prescription pills and other controlled substances to people nationwide, per the statement.
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Customers generally paid for their purchases using Bitcoin or other cryptos, making transfers from their dark web market customer accounts to one of Khuu’s vendor accounts, according to the allegations.
“Khuu and his co-conspirators traded the Bitcoin for U.S. currency and laundered the proceeds through hundreds of transactions and dozens of financial accounts,” according to the DOJ statement.
Read more: UK Bill Will Make It Easier to Seize Crypto in Money Laundering Cases
Khuu was indicted on May 18 by a federal grand jury in Texas on charges of conspiracy to commit money laundering.
He was also convicted by a federal grand jury in the Northern District of California on Aug. 17 on two counts of unlawful possession of a controlled substance. On Aug. 19, he was arrested on warrants in California.
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If convicted on all counts, Khuu faces up to 20 years in federal prison on each charge.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation, according to the release.
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