The executives of Bitcoin of America, a Bitcoin technology firm, are being charged with operating unlicensed crypto kiosks in Ohio where they knowingly profited from cryptocurrency scam victims. Owner and founder Sonny Meraban, manager Reza Meraban, and company attorney William Suriano are facing charges of money laundering, conspiracy, and other crimes related to the operation of the company, which operated as S&P Solutions. The company operates more than 50 unlicensed kiosks.
Indictments were returned by a Cuyahoga County grand jury on March 1, and the trio was arrested last week, with search warrants executed at their Florida and Illinois homes. In particular, the prosecutor alleges that romance scammers, law enforcement impersonators, and "robocallers" exploited the lack of anti-money laundering protections in the firm's systems to obtain funds from the crypto wallets of victims. Often elderly or vulnerable victims of these scams were instructed to go specifically to Bitcoin of America ATMs, withdraw money from their savings accounts or 401Ks, and exchange it for bitcoins in a wallet that they believe to be theirs but do not have control of.
According to Andrew Rogalski, the prosecutor, "these ATMs are ready-made for scammers," and there are no anti-money laundering protections in the firm's systems, making it easier for scammers to exploit victims. Indictments concerning cryptocurrency-related scams have been on the rise in recent years, and the indictment is a significant development.
3 men, 1 business charged in cryptocurrency scam; avoid Bitcoin of America ATMs, Cuyahoga Co. prosecutor says https://t.co/LaR1L2E1yH
— News 5 Cleveland (@WEWS) March 2, 2023
The article also stresses the need for stronger regulatory oversight of cryptocurrency transactions and crypto kiosk operators in order to prevent fraud and protect vulnerable individuals from falling victim to these types of scams.
Bitcoin of America, a cryptocurrency kiosk operator, has been indicted by the US government for running fraudulent Bitcoin ATMs that defrauded customers out of thousands of dollars. According to reports, the company allegedly charged customers a 20% transfer fee for exchanging cash for Bitcoin but failed to deliver the cryptocurrency into their wallets. Instead, the company directed the funds to wallets that they controlled, leaving customers with no control over their digital assets.
One elderly gentleman lost $11,250 in just under an hour to one of the dodgy kiosks. Despite learning that the machines were fraudulent, the company continued to pocket the transfer fee. The company is also accused of misrepresenting the nature of its business to government agencies and running the kiosks without a money transfer license.
Authorities seized 52 Bitcoin ATMs last week, but the company still has more in Ohio and other states. Bitcoin of America made a profit of $3.5 million from cash deposits at these unlawful kiosks in 2021. Officials believe that the company has been operating unlawfully and evading regulatory safeguards and financial compliance requirements since 2018.
The investigation into the company and its executives were reportedly led by the United States Secret Service's Cyber Fraud and Money Laundering Task Force. The FBI’s Miami Field Office had previously warned of an increasing trend of “pig butchering” scams, where cryptocurrency ATMs were becoming popular vehicles for scammers to defraud victims.
