New Orleans man sentenced for defrauding customers via unlicensed Bitcoin activity | USAO-EDLA

NEW ORLEANS – US Attorney Duane A. Evans announced that MICHEL YUSKO, III, 47, a New Orleans resident, was today sentenced to a year and a day in prison by U.S. District Judge Barry W. Ashe for operating an unlicensed money transfer business, a violation of 18 USC § 1960. The charge stems from by YUSKO sale of bitcoin to customers, and subsequent customer complaints that YUSKO had defrauded them by not providing them with the agreed upon bitcoin after taking their money. YUSKO had previously pleaded guilty in the case under a plea agreement.

According to court documents, federal agents received complaints from May 2018 that YUSKO sold bitcoins and other cryptocurrencies to its customers, but did not follow through on the transactions. YUSKO would promise customers any amount of bitcoin in exchange for US dollars at five percent above the market price for a five percent fee. He then instructed these clients to deposit US dollars into one of several corporate bank accounts, including Nervous Light Capital LLC, Ready Demolition LLC, Patriot Concrete Pumping, LLC, Praetorian Energy, LLC, and Hudson Oak Partners LLC. . YUSKO failed to register these companies as money transmission businesses with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN), nor did it otherwise comply with the regulations of Title 31, United States Code. States, Section 5330. YUSKO also asked its customers not to tell any bank employee that the purpose of their transfer was to buy cryptocurrency. Officers learned that banks frequently close accounts used to sell cryptocurrency, and banks have closed before YUSKO‘s accounts for such activity.

Court documents detail how customers contacted YUSKO and paid him tens of thousands of dollars for bitcoin. While YUSKO made transactions with many clients, he did not execute other transactions, then he did not return the US dollars deposited in his accounts. YUSKO admitted liability for $201,399.00 in casualty losses.

Judge Ashe sentenced YUSKO to one year and one day in prison, as well as three years of probation and a mandatory $100 special assessment fee. As part of his sentence, YUSKO was ordered to fully compensate the victims in the amount of $411,009.00.

US Attorney Evans praised the work of the FBI Field Office in New Orleans and the US Secret Service Field Office in New Orleans. Assistant United States Attorney Matthew R. Payne is in charge of the prosecution.