Louisiana Man Sentenced for Defrauding Customers Through Unlicensed Bitcoin Business

Published January 21, 2022

Louisiana – U.S. Attorney Duane A. Evans announced that Michael Yusko, III, age 47, a resident of New Orleans, Louisiana, was sentenced on January 21, 2022, 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, followed by customer complaints that Yusko had defrauded them by failing to deliver the agreed-upon bitcoin after taking their money. Yusko previously pleaded guilty in this case as part of a plea agreement.

According to court documents, federal agents began receiving complaints in May 2018 that Yusko was selling bitcoin and other cryptocurrencies to customers but failing to follow through on transactions. Yusko would promise customers any amount of bitcoin in exchange for US dollars at 5% above market price in exchange for a 5% fee. He then instructed them to deposit US dollars into one of several business bank accounts, including Nervous Light Capital LLC, Ready Demolition LLC, Patriot Concrete Pumping, LLC, Praetorian Energy, LLC, and Hudson Oak Partners LLC.Yusko failed to register these companies as money transmitting businesses with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), and he otherwise failed to comply with Title 31, United States Code, Section 5330 regulations. Yusko also advised his clients not to inform any bank employees that the purpose of their wire transfer was to buy cryptocurrency. Banks frequently close down accounts used to sell cryptocurrency, and banks had previously closed down Yusko’s accounts for such activity.

Customers communicated with Yusko and paid him tens of thousands of dollars for bitcoin, according to court documents. While Yusko did conduct business with a large number of customers, he failed to complete other transactions and then failed to return the US dollars deposited in his accounts. Yusko admitted to being responsible for victims’ losses totaling $201,399.00.

Yusko was sentenced to one year and one day in prison, three years of supervised release, and a $100 mandatory special assessment fee by Judge Ashe. Yusko was sentenced to make full restitution to victims in the amount of $411,009.00 as part of his sentence.

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.