Danvers man arrested for money laundering and operating unlicensed money transmitting business


Date: June 12, 2023

Contact: newsroom@ci.irs.gov

BOSTON — A Danvers man has been arrested and charged with money laundering in connection with allegedly running an unlicensed, "no questions asked" money transmitting business that converted more than $1 million in cash to the digital currency Bitcoin, including on behalf of scammers and drug dealers.

Trung Nguyen, a/k/a "DCS420" was indicted on one count of conducting an unlicensed money transmitting business, one count of concealment money laundering, and one count of money laundering. Nguyen was arrested on June 9, 2023 and, following an initial appearance in federal court in Boston, was released on $250,000 unsecured bond with conditions.

According to the indictment, between September 2017 and October 2020, Nguyen owned and operated National Vending, LLC. Through National Vending, Nguyen accepted cash from customers and, in exchange for a fee, sent them Bitcoin in return. Exchangers of virtual currency, including Bitcoin exchangers, were money transmitters under federal law and were subject to federal anti-money laundering (AML) regulations, which, among other things, required them to register as money service businesses with the Department of Treasury's Financial Crimes Enforcement Network (FinCEN) and to maintain effective AML programs, including by filing Suspicious Activity Reports with FinCEN, and by filing Currency Transaction Reports for Bitcoin-for-cash exchanges of more than $10,000.

It is alleged that Nguyen purposely failed to register National Vending with FinCEN, despite being required to do so. In approximately 15 transactions in 2018, Nguyen allegedly accepted a total of $200,000 to $300,000 in cash from an individual who identified himself to Nguyen as a methamphetamine dealer. In another series of transactions between October 2018 and September 2019, Nguyen allegedly accepted cash from an undercover law enforcement agent who told Nguyen that his business was delivering the controlled substance Adderall to gamblers at a Massachusetts casino. In a third series of transactions in 2020, Nguyen allegedly accepted approximately $60,000 from a 59-year old romance scam victim who believed she was sending cash to a romantic partner overseas. It is alleged that Nguyen failed to file Suspicious Activity Reports or Currency Transaction Reports on any of these transactions, including cash transactions of more than $10,000.

Nguyen allegedly concealed his money transmitting business by, among other ways, holding National Vending out to banks, cryptocurrency exchanges, and state authorities as a vending machine business, using encrypted messaging apps to communicate with customers, using technologies that made it more difficult to trace Bitcoin transactions, and breaking cash deposits of more than $10,000 into smaller cash deposits of less than $10,000 over consecutive days or at different branches of the same bank. Nguyen also allegedly enrolled in a paid course on concealing his business that recommended, among other things, that Nguyen purport to operate "a business for which cash deposits from around the country make sense" and that he "develop [his] cover story", "create a list or your suppliers Fictitious of course", and "Don't say the word 'Bitcoin'".

The charges of money laundering each provide for a sentence of up to 20 years, three years of supervised release and a fine of up to $500,000 or twice the value of the property involved in the transaction. The charge of conducting an unlicensed money transmitting business provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting United States Attorney Joshua S. Levy; Joleen Simpson, Special Agent in Charge of the Internal Revenue Service's Criminal Investigation; Michael Krol, Acting Special Agent in Charge of Homeland Security Investigations in New England; and Ketty Larco Ward, Inspector in Charge of the U.S. Postal Inspection Service's Boston Division made the announcement today. Assistant U.S. Attorney Seth B. Kosto, Deputy Chief of Levy's Securities, Financial & Cyber Fraud Unit, is prosecuting the case.

The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.