Along with money laundering, Maximiliano Pilipis is also accused of failing to file a tax return for income generated in 2019 and 2020.
The United States Department of Justice has charged the operator of crypto exchange AurumXchange with money laundering, alleging it processed millions for the darknet marketplace, Silk Road.
In an Oct. 28 statement, the DOJ alleges when 53-year-old Maximiliano Pilipis operated AurumXchange, over $30 million in funds across 100,000 transactions went through the exchange, a portion of which came from accounts held on the Silk Road.
Under the pseudonym Dread Pirate Roberts, American Ross Ulbricht operated the Silk Road from 2011 to 2013 as a marketplace on the Tor network, allowing users to buy and sell products anonymously, which was used by thousands of drug dealers.
It’s alleged that Pilipis operated his exchange without a license from 2009 until 2013, the same year the FBI shut down the Silk Road.
Pilipis collected millions in fees for facilitating these transactions, including 10,000 Bitcoin worth about $1.2 million at the time, alleges the DOJ.
Authorities also accuse Pilipis of neglecting federal registration and reporting requirement for crypto exchanges by failing to register with the US Treasury Department and file reports of the exchange’s activity with the federal government.
He also didn’t implement Know Your Customer(KYC) rules, in violation of Anti-Money Laundering (AML) and counter-terrorism financing (CTF) regulations, it said.
After AurumXchange shut down, authorities say Pilipis split up and transferred the Bitcoin and other assets he gained from operating AurumXchange to “launder and conceal the proceeds of the offenses.”
He is accused of converting his crypto into US dollars, which was then used for real estate investments in Arcadia and Noblesville, Indiana.
One of Philips’ reported properties in Noblesville, according to real estate listings, is currently bank-owned. Source: Redfin
In the process, authorities say Pilipis assets generated hundreds of thousands of dollars in income in 2019 and 2020, and he didn’t file a tax return.
A federal grand jury returned a superseding indictment, charging Pilipis with five counts of money laundering and two counts of willfully failing to file a tax return.
If convicted, he could face up to ten years behind bars and a fine of up to $250,000.
However, a federal district court judge will ultimately decide Pilipis fate based on the sentencing guidelines and other statutory factors, meaning his sentence could be lighter.
