Posted by: DeepDotWeb
January 21, 2015
Robert M. Faiella – who was a vendor on Silk road known as BTCking, was sentenced to four years in prison for knowingly transmitting nearly $1 million in Bitcoins intended to facilitate drug trafficking on Silk Road with the knowledge and active assistance of Charles Shrem, the Chief Executive Officer of BitInstant – who was sentenced to two years in prison.
The Official FBI press release:
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ROBERT M. FAIELLA, a/k/a “BTCKing,” an underground Bitcoin exchanger, was sentenced today to four years in prison for his role in knowingly transmitting nearly $1 million in Bitcoins intended to facilitate drug trafficking on “Silk Road,” a black-market website designed to enable users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. FAIELLA pled guilty in September 2014 before U.S. District Judge Jed S. Rakoff, who also imposed today’s sentence.
According to the allegations contained in the Complaint, the Indictment, the Superseding Information, and statements made in other documents filed in Manhattan federal court and related court proceedings:
From about December 2011 to October 2013, FAIELLA ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” FAIELLA sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through BitInstant, a company based in New York, New York. BitInstant was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and charged a fee for its service. FAIELLA obtained Bitcoins with BitInstant’s assistance, and then sold the Bitcoins to Silk Road users at a markup.
With the knowledge and active assistance of Charles Shrem, the Chief Executive Officer of BitInstant, FAIELLA exchanged nearly $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road.
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In addition to the prison sentence, FAIELLA, 55, of Fort Myers Beach, Florida, was sentenced to three years of supervised release and was ordered to forfeit $950,000, representing the amount of funds involved in the offense that were intended to promote illegal activity.
FAIELLA’s co-defendant, Shrem, was sentenced to two years in prison by Judge Rakoff on December 19, 2014.
Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the U.S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement—Homeland Security Investigations, the New York State Police, the U.S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshals Service, New York National Guard, Office of Foreign Assets Control, and the New York Department of Taxation and Finance. Mr. Bharara also thanked the FBI’s New York Field Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Andrew Adams of the Money Laundering and Asset Forfeiture Unit is in charge of the forfeiture aspects of the case.
The Criminal complaint against Robert M. Faiella: