A federal jury in the Northern District of California found cryptocurrency entrepreneur Rowland Marcus Andrade guilty on Wednesday of wire fraud and money laundering related to the sale of a token called AML Bitcoin.
The charges originated from an initial coin offering that Andrade ran for AML Bitcoin in 2017 and 2018. Preliminary court documents alleged that Andrade, a resident of Texas, misleadingly assured investors that AML Bitcoin tokens would eventually be converted into a tradeable cryptocurrency—one that never actually launched and was named to evoke the well-known Bitcoin.
This conviction marks the conclusion of one of the earliest and most protracted cases of “pump-and-dump” schemes in the crypto world that engaged U.S. federal authorities.
The Department of Justice identified prominent D.C. lobbyist Jack Abramoff as a co-conspirator, who pleaded guilty in 2020, resulting in over $50,000 in repayment and interest. Abramoff is more infamous for his connection to a federal corruption scandal that led to his imprisonment and was portrayed in the film “Casino Jack.”
A statement from the U.S. Department of Justice claimed that Andrade misappropriated “over $2 million in proceeds from the sale of AML Bitcoin” to cover “personal expenses, including purchasing two properties in Texas and two luxury cars.”
Furthermore, Andrade allegedly made false claims about the Panama Canal Authority nearing approval for AML Bitcoin’s use for ships passing through the Panama Canal, despite there being no such agreement.
“Fraudsters frequently promote new and cutting-edge technology to solicit funds from investors. However, securing capital through falsehoods and misrepresentations is neither novel nor innovative; it is illegal, period,” stated Acting United States Attorney Patrick D. Robbins. “If you deceive investors for personal gain and squander their money on personal expenses, you will face consequences.”
Andrade is scheduled for sentencing in July, and according to the DOJ announcement, “he could face up to 20 years in prison for the wire fraud charge and 10 for the money laundering charge, along with forfeiture of all property accrued from his wire fraud and money laundering offenses, including assets purchased in Texas.”