Bitcoin ATMs Were Used to Launder COVID Fraud Money, Feds Charge
Federal authorities have arrested the founder of Coindawg, a bitcoin ATM operation, and charged him with money laundering, saying he helped steal pandemic loans and used the ATMs to launder the proceeds.
Charles Riley Constant was part of a scheme to claim more than $1 million in bogus loans, prosecutors said. He laundered about $700,000 of the co-conspirators’ money through bitcoin purchases and stole the remaining $300,000 himself, funneling the money into his Coindawg ATMs, a federal agent said. in court documents.
Mr. Constant was arrested on Wednesday.
“He converted most of the proceeds of crime into bitcoin for his co-conspirators and used some of the rest to start his own lucrative cryptocurrency ATM business,” said Damian William, the U.S. attorney for the case. Southern District of New York, announcing the charges.
Authorities said the Small Business Administration loans were filed under false identities and for non-existent businesses.
The money was paid out and transferred through accounts controlled by Mr. Constant, and he distributed $700,000 of the cash in bitcoins to others involved in the scam, prosecutors said.
With some of the money left over, he bought Coindawg ATMs, which he placed in Texas and Oklahoma, making over $3 million in cryptocurrency withdrawals while charging a $15 transaction fee. %.
Authorities seized 18 of the ATMs as part of the investigation.