U.S. law enforcement officials have seized 18 cryptocurrency ATMs purchased with fraudulent loans from the Small Business Administration (SBA) for the purpose of helping small businesses economically affected by the Covid-19 pandemic were seized. The loans were also used to purchase bitcoins from a New York cryptocurrency exchange, the U.S. Department of Justice (DOJ) said.
Coindawg’s crypto ATM seized
The U.S. Department of Justice (DOJ) arrested Charles Riley Constant, aka Chuck Constant, on Wednesday on charges related to a scheme to “steal and launder more than $1 million in loans fraudulently obtained from the Small Business Administration (SBA), including the use of fraud proceeds to purchase cryptocurrency ATMs The company announced that it “made the arrest. The DOJ detailed that:
Law enforcement agencies seized, among other things, 18 cryptocurrency ATMs in Texas and Oklahoma that Constant purchased with fraud proceeds to start a cryptocurrency ATM business named “Coindawg LLC,” and Coindawg’s website were seized.
The DOJ explained that Constant and his co-conspirators created the fake identities and businesses to obtain seven economic injury disaster loans from the SBA beginning in the fall of 2020. The funds were intended to assist small businesses economically harmed by the Covid-19 pandemic.
Constant used approximately $700,000 of the fraudulently obtained SBA loan to purchase bitcoins (BTC) from a New York-based cryptocurrency exchange, the DOJ further noted.
The DOJ continued:
To date, Coindawg has exchanged over $3 million in cryptocurrency and charged 15% in transaction fees.
Constant, 54, of Allen, Texas, was charged with one count of conspiracy to commit money laundering, one count of theft of public funds, and one count of interstate receipt of stolen money. If convicted, he faces a maximum sentence of 20 years for conspiracy to commit money laundering and 10 years each for theft of public funds and interstate receipt of stolen money.
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