A Los Angeles-based bitcoin trader on the off-exchange bitcoin trading site LocalBitcoins, is facing up to 30 months in a federal prison for allegedly operating a multi-million dollar unregistered illegal money transmitting business.
In a report covered by a local Los Angeles NBC media affiliate, the 50-year-old Theresa Tetley reportedly earned roughly $300,000 annually through her black market business she ran under the LocalBitcoin user name Bitcoin Maven. The report claims Tetley had a LocalBitcoins transaction volume of between $6 million and $9.5 million from 2014 to 2017.
Court documents reveal that Tetley has already pleaded guilty to at least one charge, in particular a transaction worth $80,000 that involves funds tied to illegal drug trafficking. Other charges include failing to register with the federal government as a money transmitting service.
US District Judge Manual Real has been asked to hit Tetley with a 30-month sentence for the charges she is facing, however, her defense lawyers are seeking to reduce the term to a year in federal prison. Tetley will also be forced to forfeit a sum of 40 bitcoins (valued at $257K at current bitcoin prices), over $292K in cash, and 25 gold bars that were seized during a sting back in March of this year.
NBC Los Angeles says the case is the first of its kind in Southern California, however, a similar case involving a Detroit native, Sam Mansy, who was sentenced in December 2017 to over a year in jail for operating a similar money transmitting business.
LocalBitcoins, where the transactions took place, acts as an escrow service connecting bitcoin buyers and sellers directly. However, it appears the service could be considered criminal activity in the United States depending on the volume of transactions. LocalBitcoins recently began rolling out a strict KYC policy for users in the United States.