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US law enforcement has seized 18 cryptocurrency automated teller machines previously purchased via fraudulent loans taken from SBA (Small Business Administration).
The loans obtained from the SBA were meant to support small businesses that were financially harmed by the Covid-19 pandemic. The US DOJ (Department of Justice) also stated that the loans were used to buy bitcoin from a New York-based cryptocurrency exchange. The news for seizure was published by US DOJ on Thursday announcing that Charles Riley Constant (the founder of Coindawg), aka Chuck Constant, has been arrested “for charges in connection with a scheme to steal and launder over $1 million in fraudulently obtained loans from the Small Business Administration (SBA), including the use of fraud proceeds to purchase cryptocurrency ATMs.”
The DOJ detailed, “Law enforcement agents seized, among other things, 18 cryptocurrency ATMs in Texas and Oklahoma that Constant purchased with fraud proceeds to start a cryptocurrency ATM business named ‘Coindawg LLC,’ as well as Coindawg’s website.”
The DOJ explained that Constant and his co-conspirators generated fake identities and businesses to obtain seven Economic Injury Disaster Loans from the SBA, beginning in the fall of 2020. They took funds in the name of helping businesses harmed during the COVID-19 pandemic. Constant used almost $700,000 of the fraudulently obtained SBA loans to buy BTC from a New York-headquartered crypto exchange.
The DOJ further added, “To date, Coindawg has exchanged over $3,000,000 worth of cryptocurrency and charged 15% in transaction fees.”
Constant, 54, of Allen, Texas has been charged with money laundering conspiracy, plus one count of public money theft, and one count of interstate receipt of stolen money. On conviction, he will face a maximum of 20 years imprisonment for money laundering conspiracy and 10 years each for public theft and receipt of stolen assets.