Courtroom Confused by a Suspect’s Bitcoin Laundering Methods

In late January 2018, a 26-year-old from Pfaffenhofen, Bavaria, faced a judge at the Neuburg District Court for drug trafficking and drug distribution in no small amount. The Neuburg prosecutor accused the man of using the darknet to buy and sell hash and marijuana. According to the prosecutor, the defendant committed two types of drug distribution crimes; he sold hash on the darknet on several occasions and he purchased dry bud on the darknet to sell in person. During the hearing, the 26-year-old’s case grew more complex, requiring too much time for the judge and the prosecutor. Instead of making any decisions, the judge set a date for a second hearing in February.

In May 2017, the prosecutor said, the defendant sold hash on two occasions. Both sales involved 50 grams of hash in exchange for close to $300, totalling 100 grams of hash and $600 in the month of May alone. The 26-year-old’s crimes did not end there, though. German authorities intercepted 142 grams of marijuana that a vendor had shipped to the house of the 26-year-old’s father. In the defendant’s room at his father’s house, German authorities found a stash of 235 grams of marijuana. The court made one fact clear: the quantity of marijuana the defendant had possessed, combined with narcotics trafficking, guaranteed a prison sentence of at least one year.

He had also mistakenly sold 147 grams of marijuana to undercover LKA officers. However, on their second attempt to purchase marijuana from him, they received a box of chocolates. The prosecutor said the chocolates had been sent as a distraction.

At the very beginning of the trial, the 26-year-old admitted that he had sold the hash and that he had also purchased marijuana. He dug himself into an even deeper position when he started explaining the methods he used to turn the dirty bitcoins into clean euro notes. He admitted money laundering—a crime the prosecution had not even accused him of pulling off. He made his case sound even worse when he explained that he used a fake name to complete a portion of the money laundering. Both the judge—Judge Christian Veh—and prosecutor Fabian Lettenbauer needed to ask several times for a better explanation of the money laundering. His methods seemingly confused the court.

Towards the end of the hearing (or the end of that day’s hearing), the court came to the understanding that the defendant obtained bitcoin online; made a profit from the bitcoin somehow; created credit cards with fake names; sold the bitcoins online; transferred the balance to the credit cards; used the credit cards at ATMs to withdraw euro notes; and then deposited the euros into his personal bank account. The courtroom, according to one report, could not comprehend the so-called “scam” described by the defendant.

In total, at the time of the court appearance, he had earned €19,000. He may not have cashed out his entire portfolio’s worth of bitcoin, so the balance may change based on the value of bitcoin at his next court appearance. At the next court appearance, the court will discuss the defendant’s history of narcotic use or abuse. The second hearing will take place two weeks from the first hearing.