52 crypto kiosks were seized in the investigation led by the U.S. Secret Service's Cyber Fraud and Money Laundering Task Force.
A Cuyahoga County grand jury returned the indictment on Mar. 1 against the firm, the owner and founder, Sonny Meraban, manager Reza Meraban, and company attorney William Suriano. The trio was arrested last week and search warrants were executed on their residences in Florida and Illinois.
According to the prosecuting attorney Andrew Rogalski, romance scammers, law enforcement impersonators, and “robocallers” exploited the lack of anti-money laundering protections in the firm’s systems to transfer funds out of users’ crypto wallets.
Rogalski commented during a press conference 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are often elderly or otherwise vulnerable, to specifically go to Bitcoin of American ATMs, take money that they’ve withdrawn from their savings accounts or 401Ks,”
They are then instructed to put the cash into the machine in exchange for BTC in a wallet they think is theirs but have no control over, he explained.
He added that in one instance, an elderly gentleman lost $11,250 in three transactions to one of the dodgy kiosks in under an hour to this scam.
Meanwhile, the company allegedly pocketed a 20% transfer fee each time this occurred and continued to do even after learning they were fraudulent.
The indictment also accuses the company of being able to operate due to “written misrepresentations regarding the nature of their business to government agencies,” helping it run the kiosks without a money transfer license, according to a Mar. 3 report from Law360.
52 Bitcoin ATMs were seized last week, but the firm has more in Ohio and other states. Bitcoin of America made $3.5 million in profits from cash deposits at these unlawful kiosks in 2021, Rogalski said.
Officials believe the firm has been operating and evading regulatory safeguards and financial compliance requirements since 2018.
The investigation into the firm and its executives was reportedly spearheaded by the United States Secret Service's Cyber Fraud and Money Laundering Task Force.
In October, the FBI’s Miami Field Office warned that crypto ATMs were becoming a popular vehicle for scammers to defraud victims in an increasing trend of “pig butchering” scams.
By MARTIN YOUNG | Original Link