Undercover Cops Bust Bitcoin Launderer, Lands 6-Year Sentence

A Danvers man has been sentenced to six years in federal prison for operating an illegal cash-to-Bitcoin exchange that prosecutors say functioned under a “no questions asked” policy.

Trung Nguyen, of Danvers, was also ordered to forfeit $1.5 million and will face three years of supervised release, the US Attorney’s Office in Boston announced on 22 May.

According to prosecutors, Nguyen ran an unlicensed money-transmitting business called National Vending from September 2017 to October 2020.

The operation used deceptive tactics learned from an online course to avoid detection—posing as a legitimate vending machine company, inventing suppliers, and deliberately avoiding references to Bitcoin in financial documents to mislead banks, crypto exchanges, and regulators.

Nguyen’s scheme enabled the conversion of over $1 million into Bitcoin, often without verifying the source of funds.

Among his clients were scam victims coerced into converting cash by overseas fraudsters, and a drug trafficker who sent $250,000 in cash across 10 transactions in 2018.

Despite clear obligations under federal anti-money laundering laws, Nguyen failed to register with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and never submitted the required Suspicious Activity or Currency Transaction Reports, even for large cash deposits.

The case highlights growing concerns around unregulated crypto exchanges and their role in facilitating financial crime. https://www.coinlive.com/news/crypto-crimes-hit-close-to-home-as-south-korean-woman

Nguyen Caught in Bitcoin Sting by Undercover Officers

Nguyen’s downfall came through a series of in-person cash exchanges with undercover law enforcement officers, according to prosecutors.

In a May 2023 indictment, authorities detailed how Nguyen met agents posing as clients, accepted large sums of cash, and returned Bitcoin—charging just over a 5% fee for the service.

To conceal his activity, Nguyen relied on encrypted messaging apps and deliberately used tools designed to obscure the origin of his crypto transactions.

He also structured his cash deposits—spreading them out over several days and across multiple branches of the same bank—to avoid detection by financial institutions and regulators, a classic tactic known as "smurfing."

Nguyen was ultimately charged with operating an unlicensed money-transmitting business and two counts of money laundering.

He pleaded not guilty in June 2023.

However, a jury convicted him in November on the charge of operating an unlicensed transmission business and one count of money laundering.

He was acquitted on the second money laundering charge.

The case underscores how traditional cash handling methods, when combined with digital currency, continue to pose regulatory and enforcement challenges.