Father and son sentenced for laundering millions in Bitcoin
A Maryland father and son receive federal prison sentences for their involvement in a dark web drug trafficking and Bitcoin laundering operation.
In a case underscoring the complex challenges of digital crime, a father and son duo from Maryland have been sentenced for their roles in a sophisticated dark web drug trafficking operation and subsequent Bitcoin (BTC) laundering scheme.
Joseph Farace, 72, received a 19-month federal prison sentence on Jan. 8 for assisting his son, Ryan Farace, 38, in laundering Bitcoin earned from illegal drug sales. Court documents reveal that from November 2013 to June 2017, Ryan Farace masterminded a lucrative dark web operation, generating over 9,138 Bitcoin by selling illegal substances.
In 2020, from behind bars, Ryan Farace orchestrated the transfer of over 2,874 BTC to a foreign bank account, using a prison library book to communicate the recipient’s Bitcoin address to his father.
Federal investigators, however, intercepted these operations. By February 2021, they had seized all transferred Bitcoin, adding another 58.7 Bitcoin to the forfeiture in May 2021. Under his plea agreement, Ryan Farace consented to forfeit 2,957.9 BTC recovered during the investigations.
Ryan Farace received an additional 54-month federal prison sentence on Jan. 5 for his continued criminal activities while incarcerated. Following Joseph Farace’s 19-month sentence, he will face two years of supervised release.
Money laundering through crypto has been a hot topic over the last few years, even more so after mounting conflicts caused by the invasion of Ukraine caused regulatory bodies to fear this new asset class could be used to skirt sanctions. Last month, United States senators — led by Elizabeth Warren — broadened bipartisan backing for the Digital Asset Anti-Money Laundering Act to regulate cryptocurrency use.
High-profile cases are not a rarity, and one does not need to look further than early December 2023 to find an example, when Russian co-founder of crypto exchange Bitzlato, Anatoly Legkodymov, pleaded guilty to money laundering charges. Despite this, most United States crypto investigations do not concern money laundering but focus on tax issues.
Early December 2023 data shows that nearly half of United States crypto investigations concern taxes, and the Internal Revenue Service even played a key role in the criminal case that led to charges against former Binance CEO Changpeng Zhao.
