NEW YORK CITY — A 35-year-old man has been indicted on charges he operated an illegal bitcoin ATM business—mostly in laundromats—that he marketed toward individuals engaged in criminal activity.
Robert Taylor is accused of operating bitcoin kiosks in at least 46 locations in New York City, as well as spots in New Jersey and Miami, says Manhattan District Attorney Alvin L. Bragg Jr.
Between 2017 and 2018, Taylor allegedly converted more than $5.6 million of his customers’ cash while charging fees of 10-20%. This allegedly generated more than $590,000, approximately $160,000 of which was deposited into Taylor’s personal bank accounts. He only claimed income of roughly $3,000 on his 2017 tax returns, and a loss of $140,000 on his 2018 tax returns, among other false representations, according to Bragg.
Taylor and his businesses did not have a legally required money transmission license or virtual currency business license.
The New York Supreme Court indictment charges Taylor with multiple felony counts of Operating an Unlicensed Money Transmission Business, Criminal Tax Fraud in the Third Degree, and Offering a False Instrument for Filing in the First Degree.
Taylor allegedly went to great lengths to keep his bitcoin kiosk business as secret as possible to attract a clientele that would pay top dollar for anonymity, Bragg says.
Court documents allege the only identifying information contained on the kiosks concerning their ownership was a Snapchat icon, which linked to an anonymous Snapchat account that only contained information about a pre-paid “burner” phone and a Swiss-based encrypted email service.
Unlike licensed bitcoin ATMs and cryptocurrency exchanges, Taylor’s kiosks did not require customers to provide identification or other “know your customer” information prior to making deposits, nor did they include cameras to record users.
Taylor advertised the anonymity of his machines, sharing a video showing a man from the torso down, spreading out a large stack of U.S. currency. The man says he only buys bitcoin “in the laundromats; these racks only go into the machine with no ID and no camera.”
During the course of the investigation, search warrants were executed at Taylor’s Manhattan penthouse apartment and more than 20 different locations that housed his bitcoin kiosks. Among other evidence, a sketch of two young men installing a bitcoin kiosk in a laundromat hung in Taylor’s apartment.
The warrants resulted in the recovery of $250,000 in cash and 20 bitcoin ATMs containing $44,000 in cash.
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