Operator of unlicensed virtual currency exchange AurumXchange charged with federal money laundering and tax crimes

Date: Oct. 28, 2024

Contact: [email protected]

INDIANAPOLIS - A federal grand jury has returned a superseding indictment charging Maximiliano Pilipis, previously of Noblesville, Indiana, with five counts of money laundering and two counts of willfully failing to file a tax return. The charges relate to his years-long operation of AurumXchange, an unlicensed virtual currency exchange.

Court documents allege that, from approximately 2009 through 2013, Pilipis created and operated AurumXchange to allow individuals to exchange Bitcoin and other virtual currencies for U.S. dollars, and other government-issued and virtual currencies. AurumXchange and Pilipis collected fees worth millions of dollars for facilitating these transactions, including amassing over 10,000 Bitcoin, worth approximately $1.2 million at the time.

Federal law requires that such money transmitting businesses to comply with requirements including verifying customer identities, registering with the U.S. Treasury Department, and filing reports with the federal government, to safeguard the financial system from illicit use, combat money laundering, and promote national security.

According to court documents, AurumXchange was used to conduct over 100,000 transactions, resulting in the transfer of over $30 million in funds. A portion of the funds flowing through AurumXchange allegedly came from accounts held on Silk Road, an anonymous darkweb marketplace that hosted illicit activities including the sale of illegal drugs. Silk Road was shut down by federal law enforcement in 2013 and Pilipis stopped operating AurumXchange the same year.

Over the next several years, Pilipis split up and transferred the Bitcoin and other assets derived from his operation of AurumXchange as an unlicensed money transmitting business to launder and conceal the proceeds of the offenses. In approximately 2018, he began converting the proceeds into U.S. dollars, which he invested and spent, including his purchases of real property in Arcadia and Noblesville, Indiana. He also allegedly realized hundreds of thousands of dollars in income in 2019 and 2020, without filing tax returns as required by law.

"Combatting the criminal misuse of cryptocurrencies and other digital assets is a critical priority for the Department of Justice," said Zachary A. Myers, United States Attorney for the Southern District of Indiana. "Together with our partners in federal law enforcement, we will continue to work to investigate and prosecute offenders who exploit digital assets to fuel drug trafficking and other offenses, and those who unlawfully facilitate the transfer and laundering of the proceeds of crime."

Internal Revenue Service Criminal Investigation (IRS-CI), United States Postal Inspection Service, and Indiana State Police investigated this case. If convicted, Pilipis faces up to 10 years in federal prison and a fine of up to $250,000. A federal district court judge will determine the actual sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Myers thanked Assistant United States Attorneys MaryAnn T. Mindrum and Meredith Wood, who are prosecuting this case.

An indictment or criminal complaint are merely allegations, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.