SANTA MONICA—Charles James Randol, 33, of Santa Monica has agreed to plea guilty to using his cryptocurrency exchange business to help scammers and drug traffickers launder millions through his service on Tuesday, September 5.
The charges and the plea agreement were filed on September 5 in a Los Angeles federal court, and he is expected to make his formal plea before the courts in the near future.
According to the plea agreement, Randol owned and operated a virtual-currency money services business known as Bitcoins4Less and later Digital Coin Strategies LLC from October 2017 to July 2021. He provided cryptocurrency exchange services that included ATMs, postal services, and in person. Randol handled cryptocurrency transactions that amounted to over $10,000 without knowing who his clients were, failing to adhere to regulatory requirements.
Those who have a similar business as Randol verify and record identities of their clients. Failure to do so violates the Bank Secrecy Act.
People by the names of “Puppet Shariff,” “White Jetta,” and “Yogurt Monster” were a few of his clients. “Randol did not request a name, proof of identity, social security number, or any other information about (the undercover agent) or the source of the funds being exchanged,” the agreement states.
The defendant admitted to repeatedly violating federal law and his company’s own policies by facilitating suspicious currency exchange transactions and concealing them from law enforcement.
The defendant advertised his services on his website, and third-party sites like localbitcoins.com, which “falsely represented that Digital Coin Strategies was ‘a fully compliant FinCEN registered money services business,'” according to prosecutors. Randol had posted an anti-money laundering policy “to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities,” and said that Digital Coin Strategies would take the above-mentioned actions to comply with the federal law.
Randol operated a network of automated kiosks in Los Angeles, Orange and Riverside counties that converted cash to Bitcoin and vice versa allowing criminals to launder funds through his machines which were located in malls, gas stations and convenience stores. He met with anonymous customers in person to complete transactions and utilized the postal service to conduct Bitcoin-for-cash transactions.
“Additionally, when the defendant received the packages, the cash was often packaged in a suspicious manner, including hidden inside children’s books, concealed inside fake birthday or holiday presents, buried within puzzle pieces, or wrapped within multiple magazines,” the court documents say.
In June 2019, fraud proceeds had been mailed to Randol’s post office and the FBI inquired. Two days after the questioning took place Randol indicated to his clients that he was taking a hiatus from converting cash parcels into cryptocurrency because he “ran into an issue.” Shortly after his announcement, Randol agreed to exchange $10,000 in cash for Bitcoin for the same anonymous client.
Randol faces up to five years in federal prison plus a fine of up to $250,000 or twice the total illicit proceeds from the scams.
