LOS ANGELES – A San Bernardino County man was charged today with running an unlicensed company that exchanged tens of millions of dollars in Bitcoin and cash.
Hugo Sergio Mejia, 49, of Ontario, was charged in a two-count information with operating an unlicensed money transmitting business and money laundering. In a plea agreement also filed today, Mejia agreed to plead guilty to these felony offenses. Mejia is expected to plead guilty to the information in United States District Court in March.
According to his plea agreement, from May 2018 to September 2020, Mejia operated a virtual currency business that exchanged Bitcoin for cash, and vice versa, charging commissions for these transactions. Mejia admitted he never registered his business with the Financial Crimes Enforcement Network, a bureau with the United States Department of the Treasury that collects and analyzes information to combat financial crimes, including money laundering.
During the nearly 2½-year period, according to the plea agreement, Mejia exchanged at least $13 million.
Mejia also admitted he established companies to mask his true activity, including Worldwide Secure Communications LLC, World Secure Data, and The HODL Group LLC. Mejia advertised his business online and was referred to customers by word of mouth, communicating with them via encrypted messaging services, and meeting them in person at coffee shops, the plea agreement states.
On several occasions between May 2019 and March 2020, Mejia met with a client, who was working with law enforcement, to exchange Bitcoin for tens of thousands of dollars in cash, according to the plea agreement. On March 12, 2020, Mejia met with the client at a coffee shop in Irvine and facilitated the exchange of 14.273 Bitcoin for $82,150 in cash plus fees. During this meeting, the client informed Mejia that his primary customer was a methamphetamine buyer in Australia who purchased methamphetamine every four to six weeks and sold it in Australia for five times more than the average price in the United States, according to the plea agreement. Mejia and the client who was working with law enforcement conducted five Bitcoin-cash transactions that cumulatively exceeded $250,000, the plea agreement states.
Mejia further agreed to forfeit all assets derived from the illegal conduct, including $233,987 in cash seized from residences in Santa Ana and Ontario, silver coins and bars, and approximately $95,587 in various cryptocurrency seized.
Once he pleads guilty to the two counts in the information, Mejia will face a statutory maximum sentence of 25 years in federal prison.
This matter was investigated by IRS Criminal Investigation and Homeland Security Investigations, which received assistance from the Costa Mesa Police Department.
This case is being prosecuted by Assistant United States Attorneys Puneet V. Kakkar and Brittney M. Harris of the International Narcotics, Money Laundering, and Racketeering Section. Assistant United States Attorney Brent A. Whittlesey of the Asset Forfeiture Section is handling the forfeiture aspect of the case.