A Sunnyside man was convicted by a federal jury in Brooklyn Tuesday, Oct. 11, for laundering Bitcoin and operating an unlicensed money-transmitting business following a four-day trial before U.S. District Judge Pamela Chen.
Mustafa Gokiu, 50, also known as “Mustangy,” was found guilty of money laundering and operating an unlawful money transmitting business as part of a scheme to launder purported Bitcoin proceeds of drug trafficking, according to federal prosecutors.
As proven at trial, in July 2018, DEA agents identified an advertisement posted on localbitcoins.com where an individual with the username “Mustangy” offered to purchase up to $99,999 worth of bitcoins (BTC), a digital currency, and convert them into U.S. currency for a fee. Law enforcement agents later identified Gokiu as the individual using “Mustangy.”
On July 11, 2018, a DEA special agent acting undercover, began exchanging encrypted text messages with Gokiu to arrange in-person exchanges on BTC to U.S. currency. The agent and Gokiu met and engaged in seven transactions or attempted transactions of BTC to cash over a nine-month period, culminating in his arrest in April 2019.
The agent indicated to Gokiu on several occasions the source of the BTC the defendant was exchanging was narcotics trafficking and that as part of the undercover agent’s business was selling oxycodone, Adderall, and marijuana. The transactions occurred in Gokiu’s parked Mercedes-Benz, at a coffee shop in Sunnyside, and at other Manhattan locations. The amounts exchanged at each transaction ranged from $5,000 to $50,000 for a total of $133,000.
During each transaction, the agent transferred BTC to Gokiu’s cryptocurrency wallet, after which the defendant retained a seven or eight-percent commission fee and provided the undercover agent with the remaining amount in cash.
The evidence introduced at trial also showed that Gokiu was engaged in similar Bitcoin exchanges with multiple other individuals.
“The defendant offered his customers the ability to launder their criminal proceeds, remain anonymous and conceal where their Bitcoin was coming from so they could continue to engage in drug trafficking and other crimes while avoiding law enforcement detection,” said U.S. Attorney Breon Peace. “With today’s verdict, Gokiu’s illicit business of converting money from one form to another without a required license has been shutdown and the defendant has been convicted for his crimes.”
When sentenced, Gokiu faces up to 25 years in prison.