Lancaster Man Convicted of Money Laundering and Operating an Unlawful Money Transmission Business for Converting Cash to Bitcoin

Press Release

Defendant converted tens of thousands of dollars he believed to be proceeds of counterfeit goods, including fake Gucci products, into Bitcoin

BOSTON - A Lancaster, Mass. man was convicted on Nov. 22, 2024 following a five-day jury trial for his involvement in an unlicensed money transmission business that exchanged cash for Bitcoin for an individual who represented to be involved in unlawful trafficking in counterfeit goods.

Alan Joseph,36, was convicted of one count of operating an unlicensed money transmitting business and three counts of money laundering. U.S. District Court Judge Margaret R. Guzman scheduled sentencing for Feb. 24, 2025. Joseph was charged by criminal complaint and arrested in February 2021 and later indicted by a federal grand jury in March 2021.

"Mr. Joseph's conduct made him a critical cog in criminal enterprises, willingly converting illicit cash into cryptocurrency to help his customers conceal their tracks," said United States Attorney Joshua S. Levy. "This conviction sends a clear message: those who exploit emerging technologies like cryptocurrency to facilitate illegal activity will be held accountable. Our office, alongside our federal and local partners, will continue to disrupt these schemes and ensure that the integrity of our financial systems is upheld."

"This conviction proves that Mr. Joseph was more than willing to help criminals conceal their criminal cash flow in an attempt to cover up illegal activity," said Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division. "The FBI and our partners thank the jury for its service and swift verdict."

"Criminals rely on money laundering operations like the one run by Alan Joseph to obscure their proceeds, helping criminal enterprises evade detection, enhance profit margins and avoid tax liability. HSI's El Dorado Task Force is committed to working with our partners to follow the money and dismantle money laundering enterprises that facilitate and enable the illicit financial economy," said Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England.

"The guilty verdict of Alan Joseph demonstrates IRS Criminal Investigation's commitment to the prosecution of all who choose to not only break the law themselves but also those who assist criminals in facilitating their criminal activities," said Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation, Boston Field Office. "Joseph's actions allowed criminals to conceal their activity by converting bulk cash into bitcoin, allowing them to easily and covertly integrate their ill-gotten gains into the mainstream financial system. IRS Criminal Investigations continues to work closely with our law enforcement partner to rout out these bad actors that aid others in the furtherance of their crimes."

"Alan Joseph received money through the U.S. Mail and subsequently laundered it into Bitcoin. This conviction sends a stark warning to anyone who thinks they can illegally use the U.S. Mail for their own gain. The U.S. Postal Inspection Service will continue to remain steadfast in our mission to protect the U.S. Mail and its customers from any illegal activity," said Ketty Larco Ward, Inspector in Charge of the U.S. Postal Inspection Service in New England.

Between August 2020 and February 2021, Joseph engaged in at least four financial transactions where he converted cash to Bitcoin in connection with what Joseph believed to be trafficking in counterfeit goods, which is illegal under federal law. Bitcoin is a form of virtual currency, or cryptocurrency, that has no physical form and is traded exclusively by electronic means.

Joseph sought to promote and conceal the nature of such illegal activity. For instance, on Oct. 28, 2020, Joseph converted about $25,000 in cash to Bitcoin for the undercover agent. During this meeting, the undercover agent represented to Joseph that the money Joseph was converting was from "rich housewives" who purchased "fake" items. Additionally, Joseph expressed an interest in purchasing counterfeit goods from the undercover agent.

Contrary to federal law and regulations, Joseph never registered his money transmission business with the Department of Treasury, nor did he ever request identification from the undercover agent during the meetings.

The charge of money laundering provides for a sentence of up to 20 years in prison, up to three years of supervised release and a fine of $250,000. The charge of operating an unlicensed money transmitting business provides for a sentence of up to five years in prison, up to three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

U.S. Attorney Levy, FBI SAC Cohen, HSI SAC Krol, Acting IRS-CI SAC Wlodyka and USPIS Inc Larco Ward made the announcement. Assistant U.S. Attorneys John T. Mulcahy and Lindsey E. Weinstein of the Criminal Division prosecuted the case.

Updated November 25, 2024