A 25-year-old Los Angeles man has been charged for operating an unlicensed money transmitting business and money laundering scheme. United State District Court of California charged Kunal Kalra for four felonies– distribution of methamphetamine, laundering money, operating an unlicensed money transmitting business and failure in maintaining an anti-money laundering program.
The Department of Justice made a statement mentioning that Kalra operated a cryptocurrency exchange from May 2015 to October 2017 without a license. Kalra worked with high-value clients and had the minimum transaction limit of $5,000. With this exchange, he converted to cash to Bitcoin and vice-versa. The authorities believe that laundered about $25 million dollars in the form of cash and Bitcoin.
Kalra acknowledged during his plea that he offered his services to drug dealers and criminals, helping them in money laundering and other activities. He used a Bitcoin ATM to mask his operations and ignored the anti-money laundering regulations. The customers were able to exchange cryptocurrency for cash with ease and without revealing their identities.
Kalra was able to keep his illegal activities up and running through several bank accounts that were opened using fake identities and business names. However, this “success” was short-lived as his money laundering business came to an end when several undercover agents conducted sting operations on him.
In 2017, an undercover agent posed as a drug dealer and reached out to him for his services. He exchanged $400,000 in cash for Bitcoin and similarly he was also involved in drug trafficking when he sold two pounds of methamphetamine to another undercover agent for $6,000.
Later, that same agent approached him to exchange $50,000 for Bitcoin. When the law enforcement raided his place and accounts, they recovered $889,000 in cash, 54 Bitcoins and several other cryptocurrencies from Kalra. All this together had a value of more than half a million dollars.
Kalra is facing similar charges in Texas Federal Court where he was associated with a drug trafficking network that sold counterfeit prescription medications and was planning to commit money laundering. Kalra will appear in the court next month, and he will face a maximum possible sentence of life in prison.
