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Wednesday, January 21 09:31:23
A Florida plumber who operated an underground bitcoin exchange selling the digital currency to users of the black market website Silk Road was sentenced to four years in prison on Tuesday.
Robert Faiella, 55, was sentenced by U.S. District Judge Jed Rakoff in Manhattan after pleading guilty to operating an unlicensed money transmitting business.
His sentence came a year after prosecutors unveiled charges against Faiella and his co-defendant, prominent bitcoin evangelist Charlie Shrem.
His sentencing came as trial continued for Ross Ulbricht, the alleged operator of Silk Road, a website where drugs and other illicit goods could be bought secretly with bitcoin.
Rakoff in December sentenced Shrem, the former vice chairman at the trade group Bitcoin Foundation, to two years in prison for aiding and abetting an unlicensed money transmitting business.
But Rakoff said Faiella, who must with Shrem also forfeit $950,000, deserved a harsher sentence, citing in part a prior conviction for a tax offense.
"He knew from his own criminal history the nature of the risk he was taking, and he knowingly assumed that risk," Rakoff said.
Prosecutors say from December 2011 to October 2013, Faiella sold bitcoin for cash to users of Silk Road, a website that by the time authorities closed it had $200 million in drug sales.
Operating under the name BTCKing, Faiella would fill user orders for bitcoins through Shrem's exchange, BitInstant, ultimately trading in over $1 million in cash, prosecutors said.
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