Two Plead Guilty to Federal Wire Fraud Connected to Scheme to Defraud The Department of Veteran Affairs
NEW ORLEANS – U.S. Attorney Duane A. Evans announced that MICHAEL YUSKO, III, age 47, a resident of New Orleans, was sentenced today to one year and one day in prison by U.S. District Judge Barry W. Ashe for operating an unlicensed money transmitting business, a violation of 18 U.S.C. § 1960. The charge stems from YUSKO’s sale of bitcoin to customers, and customers’ subsequent 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 this case pursuant to a plea agreement.
According to court documents, federal agents received complaints beginning in May 2018 that YUSKO was selling customers bitcoin and other cryptocurrencies but failing to follow through on transactions. YUSKO would promise customers any amount of bitcoin in exchange for U.S. dollars at five percent above market price for a five percent fee. He then directed these customers to deposit U.S. dollars into one of several business bank accounts, among them Nervous Light Capital LLC, Ready Demolition LLC, Patriot Concrete Pumping, LLC, Praetorian Energy, LLC, and Hudson Oak Partners LLC. YUSKO did not register these companies as money transmitting businesses with Financial Crimes Enforcement Network (FinCEN) of the Department of Treasury, and he otherwise did not comply with the regulations of Title 31, United States Code, Section 5330. YUSKO also instructed his clients not to tell any bank employees that the purpose of their wire transfer was to purchase cryptocurrency. Agents have learned that banks frequently shut down accounts used to sell cryptocurrency, and banks had previously shut down YUSKO’s accounts for such activity.
The court documents detail how customers communicated with YUSKO and paid him tens of thousands of dollars for bitcoin. While YUSKO did carry out transactions with many customers, he failed to fulfill other transactions, and then he failed to return the U.S. dollars deposited in his accounts. YUSKO admitted to being responsible for $201,399.00 in losses to victims.
Judge Ashe sentenced YUSKO to one year and one day of prison, as well as three years of supervised release and a $100 mandatory special assessment fee. As part of his sentence, YUSKO was ordered to make full restitution to victims in the amount of $411,009.00.
U.S. Attorney Evans praised the work of the FBI New Orleans Field Office and the U.S. Secret Service New Orleans Field Office. Assistant United States Attorney Matthew R. Payne is in charge of the prosecution.