Tag: cryptocurrency

WEST HOLLYWOOD—The city is launching an effort to help inform community members about how to protect themselves from cryptocurrency fraud and scams.

The city of West Hollywood reported on its website that cryptocurrency is digital currency acquired through an app on a phone, a website, or at a cryptocurrency Automated Teller Machine (ATM). Bitcoin and Ether are well-known cryptocurrencies, but there are others. Scammers can use cryptocurrencies because they do not have the same legal protections as credit cards or debit cards, and payments usually cannot be reversed.

Here are some tips to avoid cryptocurrency scams:

-Only scammers demand payment in cryptocurrency. No legitimate business or government agency will demand any type of payment with cryptocurrency; that is a scam.
-Never pay a fee to get a job. If someone asks for upfront payment to secure a job with cryptocurrency or any other type of payment; that is a scam.
-Never mix cryptocurrency and online dating. If a potential online date asks for cryptocurrency or wants to “help” invest in crypto; that is a scam.
-Do research on companies and organizations before investing or sending money to avoid falling victim to an illegitimate company or website. When companies or websites (fake or not) have look or sound-alike names to well-known organizations, the potential confusion created for consumers is real. Attempting to take advantage of such confusion is a tactic employed by bad actors looking to profit from unsuspecting consumers.

The State of California Department of Financial Protection and Innovation (DFPI) announced the launch of a Crypto Scam Tracker to help Californians spot and avoid crypto scams. The tracker details apparent crypto scams identified through a review of complaints submitted by the public and allows California consumers and investors to complete their own research and prevent harm to themselves and others.

The site features a database searchable by company name, scam type, or keywords to learn more about the crypto-specific complaints the DFPI received. An accompanying glossary aims to help consumers better understand common scams. As reports of new crypto scams emerge, the DFPI will continually update this tracker to promptly alert and protect the public.

For community members who believe they have been a victim of a scam or fraud, or hear about a scam that is currently not listed on the Scam Tracker should notify the DFPI immediately by filing a complaint with the DFPI online at https://dfpi.ca.gov/submit-a-complaint or by calling toll-free: (866) 275-2677.

For more details contact Anita Shandi, West Hollywood’s Public Safety Manager at (323) 848-6446 or at ashandi@weho.org. For people who are Deaf or hard of hearing call TTY (323) 848-6496.

By Trevor

SANTA MONICA—Charles James Randol, 33, of Santa Monica has agreed to plead guilty to using his cryptocurrency exchange business to help scammers and drug traffickers launder millions through his service on Tuesday, September 5.

The charges and the plea agreement were filed on September 5 in a Los Angeles federal court, and he is expected to make his formal plea before the courts in the near future.

According to the plea agreement, Randol owned and operated a virtual-currency money services business known as Bitcoins4Less and later Digital Coin Strategies LLC from October 2017 to July 2021. He provided cryptocurrency exchange services that included ATMs, postal services, and in person. Randol would handle the cryptocurrency transactions that amounted over $10,000 without knowing who his clients were failing to adhere to regulatory requirements.

Those who have a similar business as Randol verify and record identities of their clients. Failure to do so violates the Bank Secrecy Act.

People by the names of “Puppet Shariff,” “White Jetta,” and “Yogurt Monster” were a few of his clients. “Randol did not request a name, proof of identity, social security number, or any other information about (the undercover agent) or the source of the funds being exchanged,” the agreement states.

The defendant admitted to repeatedly violating federal law and his company’s own policies by facilitating suspicious currency exchange transactions and concealing them from law enforcement.

The defendant advertised his services on his website, and third-party sites like localbitcoins.com, which “falsely represented that Digital Coin Strategies was “‘a fully compliant FinCEN registered money services business,'” according to prosecutors. Randol had posted an anti-money laundering policy “to prohibit and actively prevent money laundering and any activity that facilitates money laundering or the funding of terrorist or criminal activities,” that said Digital Coin Strategies would take the above-mentioned actions to comply with the federal law.

Randol operated a network of automated kiosks in Los Angeles, Orange and Riverside counties that converted cash to Bitcon and vice versa allowing criminals to launder funds through his machines which were located in malls, gas stations and convenience stores. He met with anonymous customers in person to complete transactions and utilized the postal service to conduct Bitcon-for-cash transactions.

“Additionally, when defendant received the packages, the cash was often packaged in a suspicious manner, including inside hidden children’s books, concealed inside fake birthday or holiday presents, buried within puzzle pieces, or wrapped within multiple magazines,” the court documents say.

In June 2019, fraud proceeds had been mailed to Randol’s post office and the FBI inquired. Two days after the questioning took place Randol indicated to his clients that he was taking a hiatus from converting cash parcels into cryptocurrency because he “ran into an issue.” Shortly after his announcement, Randol agreed to exchange $10,000 in cash for Bitcoin for the same anonymous client.

Randol faces up to five years in federal prison plus a fine of up to $250,000 or twice the total illicit proceeds from the scams.

By Christianne