Two men in South Florida had been arrested last week over allegations of running a money laundering scheme partly operated on Bitcoin. Pascal Reid and Michel Abner Espinoza were arrested on what a local prosecutor has dubbed the first state law charges over the use of the virtual currency in fraudulent transactions. According to Miami state court filings, Reid, 29, Espinoza, 30, are facing one count of engaging in an unlicensed money servicing business and two counts of money laundering. Both were arrested on February 6 and are currently being detained in Miami-Dade County jails.
In a statement, Miami-Dade State Attorney Katherine Fernandez Rundle, "The use of Bitcoins in the transactions is a new technological flourish to this very old crime. (The) arrests may be the first state prosecutions involving the use of Bitcoins in money laundering operations." Fernandez Rundle also added that undercover police had been seeking out people of interest who had been engaged in high volume virtual currency activity.
Her office, however, clarified the notion of using Bitcoin as a promoter of illegal activity. "Bitcoins are neither good nor bad. Buying Bitcoins allows money to be anonymously moved around the world with a click of a computer mouse. Improperly used, Bitcoins are often seen as a perfect means of laundering dirty money or for buying and selling illegal goods, such as drugs or stolen credit card information."
Both legal representation of both Torres and Reid could not be reached or were unable to respond to Bloomberg's request for comment.
Bitcoin, said Bloomberg, was introduced as a software by a sole or a group of programmers dubbed Satoshi Nakamoto. Because of its anonymity and ease of handling online, Bitcoin has grown popular in terms of funding illegal activities.
Bloomberg said arrests tied to Bitcoin had been made since October of last year. In New York, "Dread Pirate Roberts," or Ross William Ulbricht, was arrested for charges of operating the black market online website Silk Road. Ulbricht has entered a not guilty plea and is set to appear at a November 3 trial in Manhattan.
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