Danvers Man Sentenced to 5 Years in Prison for Running an Unlicensed Bitcoin Business

A jury found Trung Nguyen, 48, of Danvers, guilty of running an unlicensed Bitcoin business and sentenced him to six years in prison for turning cash into Bitcoins.

A jury has found a Danvers man guilty of running an unlicensed Bitcoin business and a judge has sentenced him to six years in prison for converting cash into Bitcoins.

The sentencing order, written by Judge Richard G. Stearns, calls for five years in prison, three years of supervised release and forfeiture of $1,513,000.04.

From 2017 to 2020, Trung Nguyen's vending machine company allowed a meth dealer and several scammers to carry out their crimes.

Nguyen, 48, was acquitted of the money fraud charge. His trial, titled DCS420, spanned five days and concluded in November 2024. The jury found the defendant guilty of one count of unlicensed money business and another of money laundering.

Assistant U.S. Attorneys Seth B. Kosto and Benjamin A. Saltzman said during the trial that Nguyen wilfully broke federal rules.

Unlicensed Bitcoin Operation Exposed

Nguyen's plan involved National Vending, LLC, which he presented as a professional vending machine operation to banks and government officials. In reality, he collected cash from clients, including a meth dealer and a romance scammer, and exchanged it for Bitcoin at a fee.

In 2018, Nguyen received $250,000 in 10 different transactions from the narcotics dealer. From 2019 to 2020, he collected money from romance scam victims in Missouri, Connecticut and Massachusetts, instructing them to exchange cash for Bitcoin, which he then sent to overseas fraudsters.

Federal law classifies virtual currency exchangers as money transmitters and requires them to register with FinCEN, a division of the Department of Treasury. The company did not register as a money services business and it also did not file required reports for transactions that exceeded $10,000.

"Nguyen was aware of receiving illegal funds and helped facilitate crime," said Acting U.S. Attorney Joshua S. Levy in a statement. "As we continue to see new types of cryptocurrency crime emerge, we will take swift action against those who break the law."

To avoid detection, Nguyen relied on encrypted messaging and software that concealed his Bitcoin transactions. He split deposits over $10,000 into various limits and spread them over several days or across different branches to keep his actions hidden.

To avoid detection, Nguyen followed the paid course by setting up a fake business front, leaving out references to Bitcoin and making up supplier names.

Law Enforcement Takes Tough Action

The scheme was uncovered by an investigation by Homeland Security Investigations, IRS Criminal Investigation and the U.S. Postal Inspection Service.

Michael J. Krol, Special Agent in Charge of Homeland Security Investigations in New England, said the suspect flouted bank rules and directed illegal money into the legitimate economy. The probe revealed that Nguyen knowingly handled money from drug dealers and scam victims on behalf of his clients involved in criminal acts.

The government's actions against Nguyen further highlight its commitment to tackling cryptocurrency crimes. The Department of Justice is actively targeting services that transfer funds illegally, many of which connect to fraud and drug trafficking.

Recently, a Texas man was sentenced to prison for laundering over $1 million in fraud funds using a similar method. The scammer tricked victims into sending money for fake government grants and a fake cancer charity.