A father and son who used the bitcoin exchange platform LocalBitcoins have both been sentenced to jail for running an unlicensed money transmission business. Randall Lord and his son Michael Lord were sentenced to 46 months and 106 months, respectively, for their activity.
The son was given a harsher sentence because he also plead guilty to a narcotics distribution conspiracy charge - he'd agreed to distribute controlled dangerous substances including alprazolam, a Schedule IV controlled substance - as well as running an unlawful money business while his father only plead guilty to the latter charge. The two plead their guilt in April last year.
Some of the specific errors the two made included not filing a receipt for $31,000 in US currency, and not registering their business with FinCEN.
Jerome McDuffie, from the Internal Revenue Service (IRS), said:
“Cybercrime is an emerging area of criminal activity, and we want the criminals who hide behind log-on names and internet aliases to know that IRS Special Agents will follow the money in whatever form, whether it be digital or paper currency.”
Michael Lord had a LocalBitcoins.com account under the username ‘Internet151’ that he operated since 2012. His profile lists over 3,000 confirmed trades; the court said it believes the pair used multiple personal and business accounts to hide the purchases. Law enforcement has come down heavily on a few traders from the LocalBitcoins platform. In the past month, two users from the site plead guilty to similar charges.
The case of Michael Lord, who was sentenced on an additional narcotics charge, upholds the common stereotype that the dark web, and its most popular cryptocurrency, bitcoin, are strongly tied to the drug trade. The most popular seizure of bitcoin drug money was when the FBI sprung on the Silk Road and its supposed maintainer Ross Ulbricht who is currently serving a jail term.