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唐朱昌
唐朱昌
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复旦大学法学院教授、博士生导师;复旦大学国际刑法研究中心主任。...
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祝亚雄
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高增安
高增安
复旦大学中国反洗钱研究中心特聘研究员,专事反洗钱与贸易领域的研...
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上传时间: 2023-03-24      浏览次数:570次
Coindawg Founder Arrested For Laundering Proceeds Of Fraudulently Obtained Small Business Administration Loans

 

https://www.justice.gov/usao-sdny/pr/coindawg-founder-arrested-laundering-proceeds-fraudulently-obtained-small-business

 

Damian Williams, the United States Attorney for the Southern District of New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced today the arrest of CHARLES RILEY CONSTANT, a/k/a “Chuck Constant,” for charges in connection with a scheme to steal and launder over $1 million in fraudulently obtained loans from the Small Business Administration (“SBA”), including the use of fraud proceeds to purchase cryptocurrency ATMs.  CONSTANT was arrested yesterday morning and is being presented today before a U.S. Magistrate Judge in the Eastern District of Texas.  In connection with CONSTANT’s arrest, law enforcement agents seized, among other things, 18 cryptocurrency ATMs in Texas and Oklahoma that CONSTANT purchased with fraud proceeds to start a cryptocurrency ATM business named “Coindawg LLC,” as well as Coindawg’s website.

 

U.S. Attorney Damian Williams said: “As alleged, Charles Constant helped to launder over $1 million of proceeds from loans that his co-conspirators fraudulently obtained from the SBA.  He converted the bulk of the crime proceeds into Bitcoin for his co-conspirators and used a portion of the rest to start his own lucrative cryptocurrency ATM business.  Thanks to this Office’s teamwork with the HSI, Constant is now facing serious criminal charges for his alleged crimes.  We will continue to hold accountable people who steal funds intended for small businesses that struggled as a result of the COVID-19 pandemic.”    

 

HSI Special Agent in Charge Ivan J. Arvelo said: “As alleged, Charles Constant specifically exploited the Small Business Administration’s Economic Injury Disaster Loan program put in place to help our small businesses weather the COVID-19 pandemic, for the purpose of expanding his criminal money laundering enterprise.  Constant is accused of defrauding the federal government and robbing U.S. taxpayers with his illicit money-laundering scheme.  HSI New York will continue to exhaust every resource at our disposal to ensure criminals like this will be held accountable for their actions.”

 

According to the allegations in the Complaint, which was unsealed today in Manhattan federal court:[1]

 

CHARLES RILEY CONSTANT, a/k/a “Chuck Constant,” knowingly assisted others involved in a scheme to fraudulently obtain over $1 million in loans from the SBA, which CONSTANT and his co-conspirators laundered through Bitcoin transactions.  The perpetrators of the fraud against the SBA used false identities and non-existent companies to obtain seven Economic Injury Disaster Loans from the SBA — funds that were intended to help small businesses financially harmed by the COVID-19 pandemic.  The loan proceeds were transferred directly from the SBA to a bank account held by C2 LLC, an entity that CONSTANT owned and registered with the U.S. Treasury Department as a money services business.  CONSTANT then used approximately $700,000 of the crime proceeds — a portion of which he routed through a second bank account held by C2 LLC — to purchase Bitcoin from a cryptocurrency exchange headquartered in New York City.  CONSTANT directed the New York-based exchange to distribute the Bitcoin to his co-conspirators.

 

CONSTANT then stole the remaining $300,000 of fraud proceeds.  CONSTANT transferred $53,000 of the $300,000 to a third bank account held by C2 LLC and an additional $98,300 to an account in CONSTANT’s name at a cryptocurrency exchange headquartered in California.  Beginning in the fall of 2020, CONSTANT used a portion of these fraud proceeds to purchase, among other things, seven cryptocurrency ATMs (“Crypto ATMs”), cryptocurrency, and promotional services to start a cryptocurrency ATM business named “Coindawg LLC.”  CONSTANT used revenue generated by the seven Crypto ATMs to acquire additional Crypto ATMs and more cryptocurrency to expand Coindawg’s operations.  To date, Coindawg has exchanged over $3,000,000 worth of cryptocurrency and charged 15% in transaction fees.  Below is a photograph of one of the Coindawg Crypto ATMs seized by law enforcement in connection with CONSTANT’s arrest:

 

CONSTANT, 54, of Allen, Texas, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison; one count of theft of public money, which carries a maximum sentence of 10 years in prison; and one count of interstate receipt of stolen money, which carries a maximum sentence of 10 years in prison.

 

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

 

Mr. Williams praised the investigative work of the HSI.  Mr. Williams also thanked the HSI Field Office in Dallas, Texas, for their assistance in the investigation of this case.

 

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Sarah Lai, Olga I. Zverovich, and Andrew K. Chan are in charge of the prosecution.

 

The charges contained in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.