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Justice News

Department of Justice
U.S. Attorney’s Office
Central District of Illinois

FOR IMMEDIATE RELEASE
Tuesday, December 9, 2014

Mclean County Man To Serve Four Years In Prisonfor Operating Unlicensed Internet Bitcoin Exchange

Peoria, Ill. – The first defendant prosecuted in the Central District of Illinois for running an unlicensed internet money service business has been sentenced to four years in federal prison, as announced by U.S. Attorney Jim Lewis. Last week, on Dec. 4, Chief U.S. District Judge James E. Shadid sentenced John D. Powell 55, of Normal, Ill., to 48 months in prison for operating an unlicensed Bitcoin exchange on the internet. Powell was also ordered to serve three years of supervised release following his incarceration.
      
On July 31, 2014, Powell entered an open plea of guilty to two counts of operating an unlicensed money service business. Bitcoin is a cyber-currency that allows individuals to conduct transactions anonymously. According to court documents and statements during court hearings, Powell’s exchange business allowed individuals increased anonymity by exchanging cash anonymously for bitcoin. Investigators found that Powell received more than $3,000,000 from individuals during an 18-month period ending in February 2014, even though he had not registered, as required by law, as a money service business with either the State of Illinois or the United States.

Following the sentencing hearing, Powell was remanded to the custody of the U.S. Marshals Service. On Sept. 30, 2014, Powell was arrested, and had been ordered detained pending sentencing after the government filed a petition to revoke Powell’s pretrial release supervision. Powell had been placed under pretrial release supervision with conditions, including that the defendant not use or unlawfully possess illegal drugs. In support of revocation of Powell’s pretrial release, the petition cited four occasions from July 29 to Sept. 11, 2014, when the defendant submitted to testing for a prohibited substance and tested positive for cannabis. 

The case was prosecuted by Assistant U.S. Attorney Bradley W. Murphy.  The investigation was conducted by the Internal Revenue Service Criminal Investigation and the U.S. Postal Inspection Service.


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Updated June 22, 2015