Bitcoin User Arrested for Laundering Drug Money

Bitcoin used for Laundering Drug Money

Thomas Mario Costanzo of Mesa, Arizona, also known by his online username as Morpheus Titania, was convicted on five counts of money laundering in Phoenix Arizona. His first criminal activities with bitcoin are what prompted the DEA to begin their long-term investigation which resulted in the first conviction of bitcoin-based money laundering in the state of Arizona.

DEA agents began their investigation in response to an advertisement on a bitcoin trading website that Costanzo had posted where he claimed he was open to cash transactions up to $50,000.  Costanzo began trading with undercover agents who told Costanzo that they were drug dealers and were interested in bitcoin.

Costanzo told the undercover agents how bitcoin was a great way to hide their drug money from law enforcement and went on to trade $164,700 with the undercover agents over a two-year period. Costanzo continued the trading arrangement under the impression that it was a way for the agents he believed to be heroin and cocaine traffickers to launder their drug-related income.

“The DEA and our law enforcement partners will never relent in its pursuit of justice against those who continue to destroy our communities with their illicit activities.”  said DEA Special Agent, Doug Coleman “The DEA is committed to identifying and targeting those criminals like Costanzo who utilize sophisticated methods such as bitcoin and the dark web to conceal their drug trafficking and money laundering enterprises.”

The investigation of Thomas Costanzo was conducted by several law enforcement branches including the:

  • Drug Enforcement Administration (DEA)
  • Internal Revenue Service Criminal Investigation (IRS)
  • U.S. Immigration and Customs Enforcement Homeland Security Investigations
  • Scottsdale Police Department
  • Maricopa County Sheriff’s Office
  • United States Postal Inspection Service (USPIS)

The bitcoin used in the transactions is subject to forfeiture by the United States.  Sentencing is set for June 11, 2018. Each conviction of money laundering in the case of Thomas Costanzo carries a maximum penalty of a $250,000 fine, 20 years in prison, or both.

 

 

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.