LOS ANGELES—A Santa Monica man who used his cryptocurrency cash exchange business to launder millions of dollars in criminal proceeds pleaded guilty on Oct. 4 to a federal charge.
Charles Randol, 33, entered his plea to failing to maintain an effective anti-money laundering program, a crime that carries a prison sentence of up to five years, according to the U.S. Attorney’s Office.
Sentencing was set for Jan. 17.
From October 2017 to July 2021, Mr. Randol owned and operated a virtual currency money services business known as Digital Coin Strategies LLC. The company offered cryptocurrency cash exchange services for a commission.
Mr. Randol met anonymous customers in person to complete transactions, controlling and operating a network of automated kiosks in Los Angeles, Orange, and Riverside counties that converted cash to Bitcoin and vice versa. He also conducted Bitcoin-for-cash transactions for unknown people who mailed large amounts of U.S. currency to him, including to post office boxes that he controlled, papers filed in Los Angeles federal court show.
Mr. Randol admitted in his plea agreement to repeatedly violating federal law and his company’s own policies by facilitating suspicious currency exchange transactions and taking steps to conceal them from law enforcement.
For example, Mr. Randol frequently conducted in-person cash transactions that exceeded $10,000 with anonymous or pseudo-anonymous individuals, including people Mr. Randol knew only by such monikers as Puppet Shariff, White Jetta, Yogurt Monster, and Hood.
In his plea agreement, Mr. Randol admitted to engaging in specific transactions from October 2020 to January 2021 in which he exchanged a total of $273,940 in cash for Bitcoin without requesting a name, proof of identity, Social Security number or any other information about the buyer or the source of the funds being exchanged—violations of the Bank Secrecy Act.
Mr. Randol also allowed criminals to structure and launder funds through his Bitcoin kiosks in malls, gas stations and convenience stores in Los Angeles, Glendale, Santa Clarita, Huntington Beach, Santa Ana and Riverside, prosecutors said.
