Los Angeles-area man to plead guilty to operating Bitcoin-cash exchange business and money laundering, following ICE investigation
LOS ANGELES – A San Bernardino County man was charged today with running an unlicensed company that exchanged tens of millions of dollars in Bitcoin and cash, following a probe by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Los Angeles and IRS Criminal Investigation.
In a two-count information, Hugo Sergio Mejia, 49, of Ontario, was charged with money laundering and operating an unlicensed money transmitting business. In a plea agreement also filed today, Mejia agreed to plead guilty to these federal felony offenses in in March.
According to his plea agreement, from May 2018 to Sept. 2020, Mejia operated a virtual currency business that exchanged Bitcoin for cash, and vice versa, charging commissions for these transactions. Mejia admitted he never registered his business with the Financial Crimes Enforcement Network, a bureau with the U.S. Treasury Department that collects and analyzes information to combat financial crimes – including money laundering.
During the nearly 2½-year period, according to the plea agreement, Mejia exchanged at least $13 million.
Mejia also admitted he established companies to mask his true activity, including Worldwide Secure Communications LLC, World Secure Data and The HODL Group LLC. He advertised his business online and was referred to customers by word of mouth, communicating with them via encrypted messaging services, and meeting them in person at coffee shops.
On several occasions between May 2019 and March 2020, Mejia met with a client – who was working with law enforcement --to exchange Bitcoin for tens of thousands of dollars in cash. On March 12, 2020, Mejia met with the client at a coffee shop in Irvine and facilitated the exchange of 14.273 Bitcoin for $82,150 in cash plus fees. During this meeting, the client informed Mejia that his primary customer was a methamphetamine buyer in Australia who purchased methamphetamine every four to six weeks and sold it in Australia for five times more than the average price in the United States.
Mejia and the client who was working with law enforcement conducted five Bitcoin-cash transactions that cumulatively exceeded $250,000.
Mejia also agreed to forfeit all assets derived from the illegal conduct, including $233,987 in cash seized from residences in Santa Ana and Ontario, silver coins and bars and approximately $95,587 in various cryptocurrency seized.
Once he pleads guilty to the two counts, Mejia will face a statutory maximum sentence of 25 years in federal prison.
This case received assistance from the Costa Mesa Police Department and is being prosecuted by the U.S. Attorney for the Central District of California’s International Narcotics, Money Laundering and Racketeering and Asset Forfeiture Sections.