The founder of a company that sold bitcoin tokens meant to prevent money laundering was convicted of money laundering Wednesday by a San Francisco jury.
Investors lost more than $2 million in Rowland Marcus Andrade’s AML Bitcoin, according to federal prosecutors.
The verdict comes as the value of the genuine bitcoin has plummeted 19% over the last month. On Feb. 13, bitcoin traded at more than $96,000; it had fallen to $80,051.21 on Thursday morning.
Prosecutors presented evidence that Andrade, 47, of Texas made false representations to potential investors about the technology, viability, potential business deals, and release date of AML Bitcoin. Andrade claimed his crypto coin would prevent money laundering through “biometric technologies.”
Among his claims, Andrade falsely told investors that the Panama Canal Authority was close to permitting the coin’s use for ships passing through the canal.
In a LinkedIn profile, he touted AML Bitcoin as “perhaps the first and possibly only coin that, because of its structure, is compliant with anti-money laundering, anti-terrorism and anti-terrorist financing laws, bank secrecy laws, know-your-customer laws, and anti-financial crimes laws both in the United States and abroad.”
Prosecutors showed at trial that Andrade diverted more than $2 million from the coin’s sales for personal expenses, including two Texas properties and two luxury automobiles, and laundered investor funds through various bank accounts before using the money for the purchases.
“Fraudsters often tout new and innovative technology in order to raise money from investors. But raising money through lies and misrepresentations is neither new nor innovative,” acting U.S. Attorney Patrick D. Robbins said in a statement Thursday. “It’s unlawful, plain and simple.”
Andrade’s lawyer sought to push blame for the scheme away from his client onto others involved in the company. Among them were lobbyist Jack Abramoff and other partners, according to Bloomberg Law. “He was swimming with the sharks,” defense attorney Michael Shepard said during opening statements. Abramoff, who gained notoriety for a D.C. lobbying scandal in 2005 and was portrayed by Kevin Spacey in the 2010 film “Casino Jack,” pleaded guilty in 2020 to conspiring to commit wire fraud and defrauding investors for his role in promoting AML Bitcoin.
Andrade’s sentencing is slated for July 22. He faces up to 20 years in prison for wire fraud and 10 years for money laundering, as well as forfeiture of property connected to his crimes.