A bitcoin trader from Mesa was convicted by a federal court jury over the charge of five counts of money laundering this Thursday. Thomas Mario Costanzo, also known as Morpheus Titania was arrested and accused of trading $165,000 from covert agents in April 2017. Court’s documents state that undercover agents posed as cocaine and heroin dealers who wanted to exchange it for bitcoin.
According to the news in azcentral.com Costanzo was using bitcoin to purchase drugs online. He also added other people in dealing with traders. The Office of US Attorney stated that Costanzo is currently facing 20 years in prison and a fine of $25,000 for every count he has been charged with. The Justice Department would possibly seize all the bitcoins involved in money laundering.
Costanzo was also under scrutiny for charging between 7 to 10 percent commission over every transaction instead of the standard rate, i.e., 1.5 percent.
A series of allegations for the trader
As reported by The Arizona Republic 60 rounds of ammunition were found at Costanzo’s home in Mesa. The raid was conducted in April 2017; the same month money laundering charges were laid on him. Costanzo was already asked not to possess firearms due to an earlier felony marijuana conviction.
Peter Steinmetz, Costanzo’s co-defendant and Director at Barrow Neurological Institute, was released from an ongoing case when federal prosecutors took back all the charges. He was on trial for running a money trading business without a valid license. Steinmetz was relieved when investigators found that he refused to deal with an agent who posed a heroin buyer from Russia.
He has been under scrutiny since he got arrested earlier. Then he was caught with an AR-15 in the Phoenix Sky Harbor International Airport. In his defense, he claimed that it was a stunt performed to flaunt his right to carry a firearm. The Attorney’s Office, Maricopa County, ordered him to not carry any weapon to any Phoenix-area airport for the following two years.
Increase in crypto-related money laundering
Costanzo is not the first person to get convicted of money laundering using cryptocurrencies. Cointcentral.com reported that Europol was successful in busting a leading cybercrime gang known as Carbanak. It was convicted of stealing more than 1 billion Euros from over 100 financial institutions in 48 countries. The group used fake emails to take control of the central server and ATMs of a bank. The loot was further laundered with cryptocurrencies to prevent local authorities from tracking their hidings.
There have been many other cases where digital currencies were used to save criminals from getting arrested. It is believed that many hackers and dealers in the black market are using the technology for the instant and safe transfer of funds. These people mostly use unpopular currencies to maintain a low profile which makes tracking even harder. Although, crypto money is also used for legitimate transactions between business owners yet it cannot shake off allegations of assisting unlawful activities.
As of now, cryptocurrency is creeping into our businesses, and economy and governments have to be careful in its applications.