Three Defendants Sentenced For Illegal Bitcoin Business

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FILE PHOTO: Signage is seen at the United States Department of Justice headquarters in Washington, D.C.

          GRAND RAPIDS, MICHIGAN — U.S. Attorney Andrew Birge announced today that Christopher Allan Boden, a/k/a “Captain,” 46, of Grand Rapids, Daniel Reynold DeJager, a/k/a “Daniel Miester,” and “Danichi,” 35, of Tacoma, Washington, and Leesa Beth Vogt, a/k/a “Lis Bokt,” and “Moose,” 37, also of Grand Rapids, were sentenced by the Honorable Robert J. Jonker, Chief United States District Judge, for the commission of various financial crimes.  In October, the three defendants pled guilty.  Boden pled guilty to operating an unlicensed money transmitting business, money laundering, and structuring deposits to evade financial institution reporting requirements.  DeJager pled guilty to conspiracy to operate an unlicensed money transmitting business and money laundering.  Vogt pled guilty to structuring while operating the unlicensed money transmitting business. 

          The Court sentenced Boden to 30 months in custody and ordered him to pay $75,000 and forfeit bitcoin, among other penalties.  DeJager received 10 months in custody for his role in the scheme and was ordered to pay $25,000.  Vogt was sentenced to four years of probation and ordered to pay $62,711 to the government.  In total, the defendants forfeited and were ordered to pay more than $200,000 in bitcoin and U.S. currency.

          According to public records filed in the case, Boden, DeJager, and Vogt operated an unlicensed money transmitting business at The Geek Group, a registered non-profit entity, between March 2017 and December 2018, when federal agents searched the business.  After the search, Boden, who was president of The Geek Group, and Vogt, its executive director, decided to close the business.  DeJager purchased bitcoin from registered exchanges, often laundered it, and then sent it to Boden to sell.  Boden and other staff at The Geek Group, including Vogt, would sell bitcoin to customers.  Boden, Vogt, and others then “structured” deposits of the cash proceeds to avoid detection of their operation and to purchase more bitcoin.  The defendants sold more than $740,000 in bitcoin.  Boden’s customers included drug dealers, and he held himself out to be a money launderer, explaining to prospective customers that “people buy from” him because he sold “clean” bitcoin, not “dirty” bitcoin that could be traced.  Boden boasted that he did not collect certain information required to be collected by a federal law that prevents money laundering, commonly known as “know your customer” information. 

          In connection with sentencing, DeJager explained to the Court that he and Boden started selling bitcoin because of their “anarchy streak”: they were drawn to “[t]he possibility of making a lot of money while deposing government controlled currency with one that was anonymous.”  Boden acknowledged to the Court that they “mixed” bitcoin to thwart anti-money-laundering controls put in place by licensed cryptocurrency exchanges: they knew licensed exchanges would not sell them bitcoin if the exchanges discovered Boden’s customers were doing “something . . . illegal with it.” 

          Boden also solicited an undercover agent to collect a bitcoin debt that had purportedly accrued to $500,000 by using violence if necessary.  Boden delivered a dossier with information on the debtor to the agent and said, among other things: “If all I wanted to do was f*** him up, his head in burlap is easy to do.  I want my money.  I don’t give a f*** about him; I don’t give a f*** about his family.  I want my money.”  And: “What happens to him, I don’t give a sh** . . . [Y]ou kill him, he ain’t gonna pay me.  And, and I don’t need him dead; he’s dumb. . . . How you handle this, this is your world.  I care that I get my money back.  Beyond that, it’s whatever’s most efficient for you.”  Boden told the agent, who he thought was a cocaine dealer, that a drug dealer was his “exact favorite kind of client.”  Boden also said, “I want to get your world working on bitcoin.”

          “These defendants knew they were breaking the law and ran their illegal money transmitting business anyway,” said U.S. Attorney Birge.  “In addition to laundering money for their customers, some of whom were involved in drug trafficking, they set about to defeat the anti-money-laundering controls of licensed financial institutions.  My hope is the Court’s sentences will deter others who think cryptocurrency operates in a lawless environment from committing similar financial crimes.”

          “This case reflects the vital role HSI plays in disrupting criminals who use cryptocurrency to further their illegal enterprise,” said Homeland Security Investigations Detroit Acting Special Agent in Charge James C. Harris III.  “Our special agents, working with federal and local partners, will continue to identify and investigate those who endanger our communities, and provide an avenue for criminals to conduct illegal activity.”

          “These sentencings serve as an important reminder that the Internal Revenue Service – Criminal Investigation actively investigates all schemes designed to negatively impact taxpayers, including those in the emerging cryptocurrency market,” said Special Agent in Charge Sarah Kull, IRS Criminal Investigation, Detroit Field Office.

          Homeland Security Investigations and IRS Criminal Investigation handled the investigation, with assistance from the Grand Rapids Police Department.  Assistant U.S. Attorney Justin M. Presant prosecuted the case.

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