NEWS : 'We're Going to Find You' - How Undercover Agents Trade Prison Time for Bitcoins
An Australian national living in Boulder, Colorado was slammed with a one year and a day prison sentence last month for trading bitcoins. An August 23 statement from the Colorado U.S. District Attorney’s Office states that Emilio Testa, 32, was charged with money laundering, and claims Testa knew the funds he was acquiring had been used in narcotics deals. While Testa’s reason for trading was reportedly that “he preferred not to use banks or deal with taxes,” and the type of “narcotics” was not mentioned, the D.A. has pinned him for more serious crimes nonetheless, in an emergent pattern of targeting bitcoin traders while letting big-time criminals like banks, governments, and drug companies off the hook.
A Pattern of Entrapment
Testa is not alone in his predicament. As news.Bitcoin.com reported last month, 42-year-old William Green of New Jersey could similarly face five years in prison and a $250,000 fine. Bitcoin hobbyist and family man Jason Klein barely avoided five years himself, having to pay a $10,000 fine after two agents posing as friendly bitcoin traders tricked him into selling larger and larger amounts, and used code words to describe drugs which Klein didn’t understand.
It seems that when it comes to over-the-counter (OTC) and peer-to-peer trading these days, no one is safe. In the ominously worded D.A. press release, United States Attorney Jason Dunn threatens:
Trying to hide criminal proceeds in Bitcoin? We’re going to find you.
Steven Cagen, Homeland Security Investigations (HSI) Special Agent in Charge, Denver, states: “Criminals may be sophisticated enough to use cryptocurrency but they’re not smart enough to stay out of jail, as this conviction shows.”
What Is a Criminal?
While the D.A.’s report mentions that Testa “agreed to exchange Bitcoin for narcotics proceeds” and that this was done “while understanding that the transaction would conceal or disguise the nature … of the money,” it fails to detail what specifically was mentioned, and in regard to what type of narcotics. The legal definition of the term is broad and dangerously murky, historically covering anything from from cannabis plants to heroin and crack cocaine. Druglibrary.org claims that there are three main reasons for this ambiguity, where medically and etymologically the term “narcotic” more clearly means a sleep-inducing agent:
One reason is that they are genuinely ignorant about these drugs and their effects …The second reason is that “narcotic” sounds dangerous and makes good headlines …The third reason is that it blurs the line between things like marijuana and heroin. Police can’t take a lot of credit for busting someone with an ounce of pot, so they call it a “narcotics bust.”
This in mind, whether Emilio Testa knowingly laundered money for what he thought were big time drug dealers, or simply sold some bitcoin to a couple guys talking casually about cocaine or pot, remains to be seen. The D.A.’s release also omitted the amount of money that was involved.