Two arrested, including one Canadian, in the 1st state bitcoin prosecution in Florida over alleged money laundering

By Christine Duhaime | February 5th, 2014

In another first for bitcoin, the Miami Beach Police today arrested two men for alleged money laundering involving bitcoin. And one of them is Canadian.

According to police, undercover officers and special agents from the Miami Electronic Crimes Task Force posed as bitcoins buyers and contacted various bitcoin sellers on the website “localbitcoins.com” specifically requesting assistance to “move money” to facilitate criminal activities. Allegedly, the men arrested agreed to assist the agents in moving proceeds of crime “for a fee” of 17% using bitcoin transactions.

A Canadian, Pascal Reid, who lives in Florida and allegedly processed transaction on www.localbitcoins.com  was arrested during a meeting with the undercover agents to finalize a deal to sell $30,000 worth of bitcoin. Reid had 403 bitcoins on his iPhone wallet, equal to $316,000. Mr. Pascal was charged with money laundering and being an unlicensed money transmitter under Florida state law. The arrest of Mr. Pascal is the first Canadian arrest involving bitcoin crime.

Also arrested was Michell Espinoza who is alleged to have also agreed to sell $30,000 worth of bitcoin to agents to move proceeds of crime. One of the agents allegedly informed Mr. Espinoza that he wanted to use bitcoins to buy stolen credit cards online.

Other reports suggest that a third person was arrested, Vincente Loyola, also a Canadian, who is allegedly already incarcerated in Florida for drug trafficking. He was allegedly charged with money laundering under state law.

State Attorney Katherine Rundle and U.S. Secret Service Agents noted the challenges in identifying and prosecuting bitcoin transactions.

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