CLEVELAND — The Cuyahoga County Prosecutor’s office and the Secret Service Field Office in Cleveland unsealed an indictment in a major cryptocurrency scam on Thursday.
Three individuals and one business are indicted on a charge of engaging in a pattern of corrupt activity among several other charges for operating cryptocurrency kiosks in Northeast Ohio. In total, 30 law enforcement offices were involved with the investigation.
A Cuyahoga County grand jury returned an indictment, charging S and P Solutions, which operates as Bitcoin of America, the founder Sonny Meraban, 45, his father and manager of the company Sonny Meraban, 75, and their attorney William Suriano, 69.
They are all charged with one count of engaging in a pattern of corrupt activity, one count of conspiracy, eight counts of money laundering, eight counts of receiving stolen property, 33 counts of license requirement violation, five counts of tampering with records, one count of possessing criminal tools and one count of taxation.
Wednesday, police agencies seized 52 Bitcoin of America ATMS in mostly neighborhood gas stations throughout Lorain and Cuyahoga counties.
Police arrested Sonny Meraban at his home in Miami and the two other men near the Chicago area.
In 2021, Bitcoin of America’s profits from cash deposits in Ohio was more than 3.5 million, according to investigators. BOA operates over 2,600 crypto ATMs across 35 states and is the 4th largest cryptocurrency ATM in the nation.
Blaine Forschen, the United States Secret Service special agent in charge, said shortly after Bitcoin of America’s ATMs began popping up in Ohio, complaints came in.
“The investigation revealed, since 2018, Bitcoin of America has evaded numerous regulatory safe guards and financial compliance requirements in Ohio by misrepresenting the company’s role in transferring funds by cryptocurrency,” he said. “It was the pathway for money to go from the victims to the scammers, unregulated and unmonitored.”
Investigators revealed the first issue is that the ATMs are not properly licensed in Ohio.
“We are dealing with a new industry of cryptocurrency but we are not dealing with new laws,” said Andrew Rogalski, the economic crime supervisor at the Cuyahoga County Prosecutor’s Office. “Cryptocurrency is money. if you’re a money transmitter in the State of Ohio, you need to have a license. Bitcoin of America does not have a license.”
Forschen added the company misrepresented its money transfer capabilities to avoid Ohio regulators and because of the lack of regulations, BOA became attractive to scammers.
“Because of their lack of money-laundering safeguards, criminals around the world have utilized the company to receive victim payments and launder elicit funds to criminals, both in the U.S. and across the world. Scammers, robocallers, international organized crime groups have capitalized on the company’s lack of compliance and licensing,” he said.
He added victims, unknowingly, sent money to organized crime groups in Russia and other foreign countries.
Investigators stated that Bitcoin of America takes 20% of every transaction without revealing it to users beforehand.
“The money that goes into the Bitcoin of America machine is deposited into the company’s out-burning account, whether it’s a legitimate transaction or an illegitimate transaction, Bitcoin of America retains the 20% as profit,” said Rogalski.
He added even when the company had users call and report their money gone, BOA never returned its own 20% profit.
The indictment shows eight victims in Northeast Ohio were scammed out of tens of thousands.
But Cuyahoga County Prosecutor Michael O’Malley said he’s confident there are many more victims and encourages anyone who believes they have been scammed to contact your local police department and file a report on the Federal Trade Commission’s website.
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