Founder of the fake AML Bitcoin Project, Rowland Marcus Andrade, was sentenced to seven years for defrauding investors and laundering $10 million.
He made false promises and misused customer funds while assuring investors about fake partnerships.
Regulators successfully traced his blockchain transactions, in a show of just how far law enforcement has come.
The case adds more urgency for AML and KYC compliance across the crypto space.
Rowland Marcus Andrade, the founder of AML Bitcoin, has been sentenced to seven years in federal prison for wire fraud and money laundering.
The case, which involved a $10 million crypto scam is yet another moment in the U.S. government’s effort to crack down on financial crimes in the digital asset space.
While prosecutors pushed for a harsher sentence of over 17 years, the court settled on seven years, followed by three years of supervised release.
According to the U.S. Department of Justice (DOJ), Andrade lied to investors about AML Bitcoin. One particular claim he made to investors involved telling them that the token would be used by the Panama Canal Authority for shipping transactions:
Which was a partnership that simply didn’t exist.
Rowland Marcus Andrade sentenced to nearly a decade | Source: Twitter
Instead of building a legitimate crypto platform, Andrade funneled about $2 million of investor funds into personal luxuries. He bought real estate, splashed money on expensive cars, and spent money on a lavish lifestyle, all while pretending to be leading a real crypto startup.
The ongoing case against Andrade wasn’t just about fake promises or lies to investors.
Prosecutors pointed out that his crimes were not only premeditated, but he also used layered blockchain transactions to hide the origin and movement of these stolen funds.
He likely meant to take advantage of the anonymity that blockchain provides in order to steal and launder these funds.
However, law enforcement has come a long way over the last few years. Investigators now have tools that can track down criminals, alongside access to the crypto exchanges they use.
As a result, investigators were able to trace the flow of funds, unmask Andrade and build a strong case against him.
As part of his sentence, Andrade must forfeit the stolen assets to help reimburse victims of the fraud. A separate restitution hearing is scheduled for September 16 to determine the final amount owed.
Andrade will begin serving his sentence on October 31. After his release, he will be required to follow strict supervision rules for three years, including regular check-ins with law enforcement.
This isn’t the first time AML Bitcoin has made headlines. Five years ago, notorious political lobbyist Jack Abramoff was fined and barred from securities offerings for illegally promoting the token. Abramoff, who was previously convicted in a separate bribery scandal involving Native American tribes and casino interests, admitted to his role in the scam and paid a $55,000 disgorgement.
This case sends a clear warning to other crypto entrepreneurs that compliance is no longer optional.
Prosecutors and regulatory bodies like the Financial Action Task Force (FATF) have been pushing for worldwide adherence to Anti-Money Laundering (AML) and Know-Your-Customer (KYC) guidelines.
The AML Bitcoin case shows how bad actors can manipulate relatively new technologies like blockchain, but also how regulators now possess the tools to track and punish these activities.
The crypto industry is under pressure to clean up its act. As more fraud cases like Andrade’s become investigated, investigators are going after more and more non-compliant platforms. As such, companies that fail to implement proper transaction monitoring and KYC checks could face harsh legal backlash.
Experts believe this ruling will force more crypto companies to take compliance more seriously as part of their operations. Not just as a regulatory checkbox, but in order to stay competitive with others.
The downfall of AML Bitcoin and its founder now serve as a cautionary tale for the entire crypto space.
However, it also shows that the regulatory space is maturing. Nowadays, authorities are better equipped than ever to enforce the law, even when blockchain-based crimes are involved.
In essence, as the industry grows further, those building blockchain and non-blockchain projects must do so with integrity. Because today, cutting corners isn’t just unethical: It has become criminal.
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