'Bitcoin Maven' Gaoled For Multi-Million Dollar Bitcoin-For-Cash Money Laundering Operation

A visual representation of the digital Cryptocurrency, Bitcoin alongside US Dollars on 7 December 2017 in London, England. (Photo: Getty)

Bitcoin has lost most of its (likely inflated) value in the last few months, but it still has plenty of value for law enforcement agencies looking for financial crimes to punish. The latest cryptocurrency criminal to get the book thrown at them is “Bitcoin Maven”, a 50-year-old woman who ran a bitcoin-for-cash exchange operation.

The US Department of Justice announced Theresa Lynn Tetley, a former stockbroker and real estate investor, was sentenced to 12 months and one day in federal prison this week for operating an unlicensed money transmitting business and money laundering. She was also ordered to forfeit 40 bitcoin (valued at about $344,000), $US292,264 ($394,279) in cash, and 25 gold bars acquired through her illegal business.

Tetley’s scheme, highlighted by Ars Technica, involved offering people bitcoin in exchange for cash, which on its face probably doesn’t sound like much of a crime. But Tetley did everything off the books. She failed to register her operation as a money services business and didn’t offer any sort of “anti-money-laundering mechanisms,” per the Justice Department.

Most of Tetley’s transactions were completed in person, with cash being provided for the virtual currency. She advertised her service through localbitcoins.com, a site that facilitates such exchanges, where she posted under the name “Bitcoin Maven”. She lived up to it, too; According to the DOJ, she exchanged between $US6 and $US9.5 million ($8.1 and $12.3 million) over the course of several years.

Her undoing came when she began unwittingly started doing business with an undercover agent from the Drug Enforcement Administration. The agency started closing in on her in 2016, and dragged her along for nearly a year as they built a case against her.

The plan to bring Tetley down included introducing a second agent, posing as the first agent’s boyfriend, to conduct a number of large transactions with the Bitcoin Maven.

According to Ars Technica, at one point the fake boyfriend informed Tetley that he possessed a large supply of “coke, meth and weed” that had been “stolen”, and was selling that stash for the bitcoin he was trading with her. Tetley moved forward with the transactions anyway, at one point showing up with $US300,000 ($404,715) in two Trader Joe’s grocery bags to make a trade with the undercover agent.

“Providing cash in envelopes (and in the significant amounts she did), in coffee shops and restaurants, is no way to conduct legitimate business, certainly when that volume exceeds the millions,” prosecutors wrote in a sentencing memorandum, per Ars Technica.

“Someone such as defendant — a former stockbroker and real estate investor — was certainly aware of that.”

Not helping her case was the fact that Tetley was also doing business with William James Farber, a man believed to be at the head of one of the largest drug rings on the now-shuttered dark web marketplace Alphabay. Ars Technica noted Farber was arrested last year and charged with conspiracy to possess and distribute controlled substances.

For her run as the Bitcoin Maven, Tetley will spend 366 days behind bars in a US federal prison. Her stash of bitcoin collected from the business, which now belongs to the government, was worth about $339,000 as of Thursday morning — but it’ll likely be worth $539,000, then $100,000, then $339,000 again by the end of the week.

[Ars Technica]

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