Earlier this week the Arizona resident Thomas Costanza (Thomas Costanzo), known under the name Morpheus Titania, was convicted of money laundering by using Localbitcoin.
Charges were brought by the Office of the U.S. attorney for the district of Arizona and the Ministry of justice.
In April 2017 in the house of Costanza was searched, and on 20 April he was arrested and taken into custody. At that time, the media speculated that the arrest Costanzo has been associated with the operation on a national scale to combat money laundering in the United States.
Apart from Localbitcoins, Costanzo also worked on the OTC trading cryptocurrency. For his services he took a Commission in the amount of 7-10%, whereas centralized exchanges charge a 1-2% per transaction.
When Federal agents under the guise of drug dealers got in touch with Costanza, he gave them bitcoins, and said that this is a great way to hide their activities from law enforcement. However, he not only helped the drug dealers launder illegal income, but he bought drugs with bitcoin.
During the operation Costanzo received from agents, working under cover, about $164 700 in cash.
On March 28, the Federal court of Phoenix has recognized Costanzo guilty to five counts of money laundering.
A large investigation was attended by the U.S. internal revenue service, the Office for the fight against drugs, Immigration and customs enforcement, US Postal service and a police force of Arizona.
Costanzo will appear before the court for sentencing on 11 June 2018. All five articles of the charges will cost him 20 years in prison, a fine of $250 thousand or both together.