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5 sealed federal crime cases, half-a-mil seized from BitCoin "investor," and warning from U.S. Atty



By Jacob Nakamura

jacob@kanditnews.com


A peculiar series of federal asset forfeitures from Guam resident Julien Abat Weymouth has left his friends, associates, and those who claim to know him asking, 'Why?'


Why did the U.S. Secret Service seize more than half a million dollars in cryptocurrency, cash, and cars from the young entrepreneur?



According to the Money Laundering and Asset Recovery Section (MLARS) of the U.S. Department of Justice, the agency uses "asset forfeiture as a tool to deter, disrupt, and dismantle criminal enterprises, denying them the instruments and the proceeds of criminal activity. The effective use of both criminal and civil asset forfeiture is an essential component of the Department’s efforts to combat the most sophisticated criminal actors and organizations including terrorist financiers, fraudsters, human traffickers, transnational drug cartels, and cyber criminals."


Mr. Weymouth, according to several sources who claim to know him, is a BitCoin investor who may have been engaged in multi-level marketing, commonly known as MLM. Weymouth, in his social media profiles, describes himself as a "Crypto Enthusiast ... Investor ... Poker Player ... Traveler."



Indeed, his pictures and posts show him traveling the world, enjoying himself in casino settings, and promoting cryptocurrency. None of those activities are illegal on its face.


The Justice Department states that among the reasons for seizing assets include, "To punish and deter criminal activity by depriving criminals of property used in or acquired through illegal activities; and To recover assets that may be used to compensate victims when authorized under federal law."


Selling cryptocurrency without registering as a financial institution would be an example of an illegal activity. According to the U.S. Attorney's Office in New Orleans, and also to the FBI, "Under federal law, any business that engages in the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means is deemed to be a money transmitting business. Such businesses include those that trade fiat currency, such as U.S. dollars, for cryptocurrency, such as Bitcoin, Litecoin, and Ethereum. These companies must register with the Financial Crimes Enforcement Network (“FinCEN”) as money transmitting businesses." The statute they quote from, 18 USC Section 1960, makes it illegal to operate an unlicensed money transmitting business.


So would receipt of funds from the sale of drugs; but in this case, neither the U.S. Drug Enforcement Agency nor Homeland Security Investigations were involved in the civil forfeiture. It is the Secret Service.



Taking a person's money on the promise of investing it into cryptocurrency, while charging fees, taking a commission, and then holding onto the money would be another example of criminal activity. Three years ago, the Pacific News Center and the Guam Daily Post published stories linking then-Senator Tommy Morrison to a Dubai-based company called USI-Tech that claimed to sell BitCoin packages. The company was placed on fraud alert throughout the United States, and eventually ceased operations in the country. The allegations against the company included that local actors were running a BitCoin ponzi scheme through it.



In 2019, the Justice Department indicted a Romanian man, Silviu Balaci, 35 at the time, in Germany for his part in a $722 million fraud scheme through the BitClub Network. According the federal court documents in the case, "BitClub Network was a fraudulent scheme that solicited money from investors in exchange for shares of purported cryptocurrency mining pools and rewarded investors for recruiting new investors into the scheme."


BitClub Network had engagement tied to the local BitCoin MLM community. cryptocurrency mining also is happening on Guam.


According to the federal court docket in the U.S. District Court of Guam, there is no case against Julien Weymouth; at least none that the public can see.


As of this publication, the United States Attorney, Shawn Anderson, has brought 15 criminal cases before the U.S. District Court of Guam. Of those 15 cases, one-third, or five of them, are sealed. This means the files within these cases, and even whom these cases are against, are not publicly available.


Normally, cases are sealed because public knowledge of the charges against those persons would jeopardize ongoing investigations.


We asked Mr. Anderson whether anyone on Guam was involved in the BitClub Network scheme. He replied clearly: "That case was not associated with our districts."


Asked whether there are any ongoing cases relating to cryptocurrency mining, or people on Guam offering and selling BitCoin in an unlawful way, Mr. Anderson replied, "We can neither confirm nor deny any pending investigations."


He continued, "The mining of cryptocurrency is not unlawful in and of itself. Although, Guam is a relatively unattractive place for mining due to the energy intensive nature of this activity. Cryptocurrency facilitates a wide variety of criminal conduct and may also represent proceeds of crime. This is concerning for all law enforcement agencies. Federal law also regulates cryptocurrency administrators and exchangers as money services businesses, subjecting them to registration and record keeping requirements. Our federal law enforcement partners work closely with FinCEN to monitor suspicious financial activity on Guam and the CNMI. No one should consider our islands a safe haven for cybercrime."


Kandit then asked the U.S. Attorney if his office has an idea of how many people have duped due to these schemes, and how much money people have lost because of it. He solicited for crime victims to come forward, and sent a strong warning about federal law enforcement's ability to find illegal activity:


"We can neither confirm nor deny any pending investigations. Anyone suspected of being a crime victim should contact law enforcement. Federal agents have training and experience in the seizure and preservation of electronic evidence, particularly for cybercrime."

And, finally, we asked him specifically about Mr. Weymouth, whether any of the unsealed cases are his, or whether any federal criminal cases have been lodged against Mr. Weymouth in Guam or Hawaii.


His response was, "We can neither confirm nor deny any pending investigations."

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