Crypto Exchange Operator, Charles James Randol Faces Guilty Plea for Aiding Criminals in Laundering Money

In Los Angeles, a man from Santa Monica has agreed to plead guilty for violating federal law by allowing his cryptocurrency-cash exchange company to aid criminals, including scammers and drug traffickers, in laundering millions of dollars in illegal proceeds. 

This startling revelation was disclosed by the Justice Department.

The individual in question, Charles James Randol, aged 33, has consented to plead guilty to a single-count information charging him with the failure to maintain an effective anti-money laundering (AML) program. 

This offense carries a maximum statutory sentence of five years in federal prison.

The information and plea agreement were formally submitted in United States District Court in downtown Los Angeles, and it is anticipated that Randol will formally enter his guilty plea in the ensuing weeks.

According to his plea agreement, spanning from October 2017 to July 2021, Randol owned and operated a virtual-currency money services business that later became known as Digital Coin Strategies LLC. This enterprise offered cryptocurrency-cash exchange services for a commission.

Randol conducted cryptocurrency exchange services through various means, such as meeting anonymous clients in person to complete transactions, overseeing a network of automated kiosks across Los Angeles, Orange, and Riverside counties that converted cash to Bitcoin and vice versa, and facilitating Bitcoin-for-cash transactions for unidentified individuals who sent substantial sums of U.S. currency to him, often to post office boxes under his control.

Notably, Randol promoted his business on various websites and maintained a company website falsely claiming to be a "fully compliant...money services business" registered with the Financial Crimes Enforcement Network, an agency under the United States Treasury Department. 

However, as Randol admitted in his plea agreement, he consistently violated federal law and his company's AML policies by assisting suspicious currency exchange transactions and concealing them from law enforcement. This included failing to file mandatory currency transaction reports and suspicious activity reports.

For instance, Randol frequently engaged in cash transactions exceeding $10,000 with anonymous or pseudo-anonymous individuals, neglecting to request critical identification information, such as full names, addresses, Social Security numbers, verified phone numbers, and photocopies of official government IDs, from customers in transactions exceeding $9,999. 

These actions contravened the Bank Secrecy Act and his company's AML policy.

While operating his cryptocurrency exchange business, Randol also conducted numerous Bitcoin-for-cash transactions after receiving substantial cash shipments through the mail from anonymous individuals. 

In these transactions, an anonymous sender would inform Randol through an encrypted platform that a package containing cash had been dispatched to a location under his control in or around Los Angeles. 

Upon receiving the package, Randol would count the cash and transfer a corresponding amount of Bitcoin (minus a commission) to digital wallets owned by his clients. Importantly, he conducted no due diligence on the senders of large sums of cash, the source of the funds, or the purpose of these transactions.

Following an FBI interview on June 5, 2019, regarding fraud proceeds mailed to post office boxes he managed, Randol temporarily ceased his cash-to-crypto activities. However, he resumed them shortly thereafter when a previous anonymous customer requested a $10,000 cash-to-Bitcoin exchange.

It's important to note that Randol's inadequate adherence to Bank Secrecy Act requirements allowed criminals to exploit his business to launder millions of dollars in criminal proceeds. 

For instance, between June 2018 and early 2020, Randol facilitated the conversion of cash, sent by a New Jersey resident deceived into believing his grandson needed financial assistance for a fabricated legal issue involving a purported accident. While Randol did not participate in the fraud, his business converted the victim's cash into cryptocurrency without conducting necessary due diligence or investigating the source of the funds.

Additionally, Randol's cryptocurrency kiosks permitted customers to structure funds to evade currency reporting requirements, allowing for successive transactions involving up to $3,000. 

He also maintained "test" accounts lacking customer information that customers could use for kiosk transactions.

Despite hiring a compliance officer for Digital Coin Strategies in September 2020, Randol ignored advice to discontinue the use of "test" accounts for customer transactions on Bitcoin kiosks. 

He also persisted in conducting in-person transactions, disregarding the compliance officer's warning of increased risk associated with the cash or Bitcoin received from illicit sources.

In another news, a Zimbabwean serial killer who preyed on Street children has been arrested. See detailed story here.

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