A former cryptocurrency trader and exchange operator from the U.S. state of Arizona, has been sentenced to 41 months in jail for laundering drugs money with bitcoin.
The sentencing was announced by the Department of Justice on Wednesday, after a federal jury convicted Thomas Mario Costanzo on five charges of money laundering on March 28. The sentence will credit time already served since his arrest in April 2017.
As previously reported, federal agents raided the man's home last year based on suspicion of unlawful possession of ammunition, as well as money laundering through a peer-to-peer bitcoin exchange he operated.
Evidence presented to the court later showed that Costanzo had laundered $164,700 over two years through bitcoin transactions – money he took from an undercover federal agent, who told him the funds were from heroin and cocaine traffickers.
The release states:
"When undercover federal agents approached Costanzo and told him that they were drug dealers, Costanzo provided them with bitcoin and told them it was a great way to limit their exposure to law enforcement."
Costanzo was also found guilty of purchasing drugs with bitcoin and using the online bitcoin exchange to help others buy drugs without enforcing know-your-customer authentication procedures.
At the time of his conviction, the DoJ said each of the five money-laundering charges have a maximum sentence of 20 years in prison.
As part of the decision on Wednesday, the court also ruled that 80 bitcoins seized from Costanzo, provided by him to the undercover agents, will be forfeited.
Early this month, a former bitcoin trader and exchange operator from Los Angeles known as the "Bitcoin Maven" was also sentenced to one year in federal prison after she admitted to operating an unlawful money transmission business.
Prison bars image via Shutterstock