Federal Judge Gives Man 8-Year Sentence For Running Unlicensed Bitcoin Exchange (apnews.com) 78
Ian Freeman, a New Hampshire man in his 40s, has been sentenced to eight years in prison for running an unlicensed bitcoin exchange business. He will also be fined at least $40,000, although the exact amount still has to be determined in a hearing. The Associated Press reports: Ian Freeman was taken away in handcuffs following his sentencing in U.S. District Court in Concord. Prosecutors said Freeman, a libertarian activist and radio show host, created a business that catered to fraudsters who targeted elderly women with romance scams, serving as "the final step in permanently separating the victims from their money." Freeman, who is in his 40s, said in court he did not believe he broke the law. He said he was trying to get people to adopt bitcoin. He said there were times he detected fraud and protected many potential scam victims. He apologized for not being able to help them all. "I don't want people to be taken advantage of," said Freeman, who said he cooperated with law enforcement to help some people get their money back.
Freeman said he devised a series of questions for customers, including whether a third party was putting them up to their transactions or if they were under duress. Some victims lied about their circumstances, he said. Freeman also said he didn't learn about scam victims until he saw their stories in the news. "It didn't matter how strict I was or how many questions I asked," he said. After a two-week trial, he was convicted of eight charges in December, although his conviction on a money laundering charge was later overturned by the judge. The prosecution is appealing it to the 1st Circuit Court of Appeals.
Freeman was sentenced on the remaining charges, which include operating an unlicensed money transmitting business and conspiracy to commit money laundering and wire fraud. Freeman's lawyers said they planned to appeal and asked that he remain free on bail for now, but U.S. District Court Judge Joseph LaPlante didn't allow it. The sentencing guidelines called for much longer term, ranging from about 17 years to nearly 22 years in prison.
Freeman said he devised a series of questions for customers, including whether a third party was putting them up to their transactions or if they were under duress. Some victims lied about their circumstances, he said. Freeman also said he didn't learn about scam victims until he saw their stories in the news. "It didn't matter how strict I was or how many questions I asked," he said. After a two-week trial, he was convicted of eight charges in December, although his conviction on a money laundering charge was later overturned by the judge. The prosecution is appealing it to the 1st Circuit Court of Appeals.
Freeman was sentenced on the remaining charges, which include operating an unlicensed money transmitting business and conspiracy to commit money laundering and wire fraud. Freeman's lawyers said they planned to appeal and asked that he remain free on bail for now, but U.S. District Court Judge Joseph LaPlante didn't allow it. The sentencing guidelines called for much longer term, ranging from about 17 years to nearly 22 years in prison.
Liberty in Our Lifetime (Score:2)
Indeed. [fsp.org]
Toss that one on the heap of failed experiments.
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The whole sticking it to the man thing to me seems to have boiled down to a bunch of people who don't like government having power because they want it for themselves and they'll fool however many people into believing their freedom and liberty BS that they need to in order to get it.
Look at any banana republic that has yet another coup - usually the incomer promises the moon on a stick to the people and ends up as bad or worse than the psychopath they replaced. Zimbabwe is a first class example. Mugabe was
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Now do Sam Bankman-fried.
Fair enough (Score:1)
Don't have to convict him for the victims, he earned his time for the finance laws he broke.
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Sadly that does actually seem to be the case in a lot of legal jurisdictions. Here in the UK if you commit a large financial crime they'll throw away the key. If you commit rape you'll maybe get a few years if convicted.
Re:Fair enough (Score:4, Insightful)
British satirist Jonathan Pie recently released a video which includes a line which brilliantly summarises so much of what's wrong with the modern world:
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Yeah, pretty much sums it up. All governments and pundits seem to talk about when discussing the state of a nation is GDP, nothing much else seems to matter including the state of the populations wellbeing.
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Legally, yes.
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This guy wasn't the one defrauding the victims. He did a lot to try to protect them. He just didn't fill out the right paperwork.
The US Fed, private bank with government muscle (Score:1)
"I'll teach YOU that you can escape our banking system!" -The Mob
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>escaping the banking system is fine, many exchanges operate completely **legally.** What you can't do is operate outside of the **legal requirements** for an exchange.
I've seen what banks do "legally" to know that that qualifier means next to nothing to actually protect me, the lowly plebeian, and everything to protect the elite patrician banking class.
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Nobody's stopping anybody from "escaping" the banking system. I think you mean, escaping pesky laws protecting people from scammers.
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>Nobody's stopping anybody from "escaping" the banking system.
Tell that to Gaddafi and his plan to make the pan-African Gold Dinar backed by Libya's gold reserves.
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If Gaddafi is your poster boy representing a poor innocent person being unable to "escape" the repressive banking system, then you are making my case for me. If the Fed's oversight contributed to Gaddafi's capture and killing, then I applaud them for their efforts. He is exactly the kind of person who *should* be caught in the Fed's web.
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"Nobody's stopping you from escaping the banking system." "Look what they did to this guy as soon as he tried to escape the banking system." "Yeah well he's evil and deserved to be overthrown and his country turned into a warzone for trying to escape the banking system."
By probing your argument with a single thought experiment we've watched it crumble as easily as poking a rusty truck with a stick.
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No, my argument didn't crumble at all.
If you're up to no good, like being a scammer, or a ruthless dictator, then yes, the Fed has tools to track and trap you.
If you're a regular person minding your own business, just want to play with cryptocurrency to try it out or make some extra money, the Fed doesn't have any motivation or funding to keep you from "escaping."
So yeah, it matters what you are doing. YOU are just not that important in the Fed's eyes. If you were, yeah, they can get you. If not, you can "e
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Your argument dissolved from "no one's stopping you from escaping the banking system" to the next shell, "no one's stopping you from escaping the banking system unless you're an evil person and deserve to be stopped." This too can be crumbled away by just providing some counter-examples of people the banking system has fucked over or killed.
What's going to be particularly telling is that when presented with these examples, you'll play the same card that the people were evil, and therefore judgment regarding
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It's not about how evil you are, but about how *big* you are. Ghaddafi, and this Bitcoin exchange operator, hurt enough people to get the attention of the Fed. It's a high bar. If you swindle 3 or 4 people by selling them Bitcoin and they lose their money, they're not coming after you. Little fish aren't worth the money it takes to investigate and prosecute.
Privacy doesn't exist, whether you're hiding from the Fed, or from Google. They just don't care enough, until you make enough people angry, to get notic
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I've said it once, I've said it at least half a dozen times. Probably more. The only way left to get rich with bitcoin is to open and exchange and disappear in to the night with the funds.
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So you have nothing new to say and are fishing for easy karma
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That's like saying the only way to get rich at a casino is to operate the casino. Safer bet? Sure. Good idea? Yup. But insanely hard to setup. But you can also visit a casino with a ton of cash, bet big, and lose it all, or get rich.
BTC is a high-beta investment vehicle that has almost no resemblance to its original ostensible aim of being a currency.
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But you can also visit a casino with a ton of cash, bet big, and lose it all, or get rich.
Since casinos can invariably kick you out for any reason, and their main reason is "taking too much of the casinos money", you are not getting rich. Bet limits, and big guys in suits make sure that winning big is not an option. Gambling is all about the thrill, don't cha know?
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Weird how the people making the regulations have net worths hundreds of times greater than their publicly paid salaries.
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Technically you just described the internet.
Nail-in-coffin quote about libertarianism... (Score:4, Funny)
Re: Nail-in-coffin quote about libertarianism... (Score:2)
What science fiction have you written?
If you've fleshed out even one single character as well as any of the characters in Red Mars, I'll eat YOUR hat.
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He wasn't arrested for running a Bitcoin exchange (Score:3, Insightful)
That said 8 years in prison seems insane. I think it would be simple enough to prevent him from running another money laundering scam whether he was in jail or not. And as I've said before prisons should be reserved for people but we can't prevent from causing additional harm. Containment rather than punishment. It's 2023 and we should have grown out of punishment as a species
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Last month, one of the victims described herself as a lonely widow who got scammed by a man she met on a dating site. At his instruction, she sent $300,000 to Freeman, wiping out her life’s savings.
Yep. That's not only running a bitcoin exchange.
Re:He wasn't arrested for running a Bitcoin exchan (Score:4, Interesting)
That said 8 years in prison seems insane.
i know a little bit more about what has actually been going on, here. Ian is part of the "Libertarian" Movement (self-governance), and the FBI and the U.S. Government have been looking for ways to take him down for years. at several of the regular meetings he holds for people he has been approached to get bitcoin for buying drugs. they are so ridiculously transparent about it and quite obviously and blatantly "sting entrapment" agents that i heard he even told them so, as he was asking them to leave.
it would not in the least bit surprise me if many of these "victims" also turned out to be "sting entrapment", but also, just as sadly, it would not surprise me if they were actually real. this is one of the dark sides of anonymous financial transactions: people are not doing their *own* Due Diligence, and they're not properly thinking things through. it's a transistion: we're *so used* to being "Mummy'ed" by Governments telling us "yes this transaction is safe" that of course people when they think cryptocurrency is the same as fiat currency, they fall flat on their faces.
honestly i am astounded that anyone would put USD 300,000 through bitcoin to someone they have *never met*, and it sounds so ridiculously unlikely and suspicious that my opinion is that it's a sting operation.
By "self governance" (Score:3)
It's a money laundering case. There's no victims per say, he's in trouble for facilitating criminal activity. The other stuff is pretty miner and he could get off w/o a prison sentence on it.
I don't think they particularly cared if he was. They're cracking down on money laundering via crypto currency. He would've been an easy target. You can't go after the major exchanges (yet) because they've got tons of money and the lawyers that go with it. Plus they all
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"And as I've said before prisons should be reserved for people but we can't prevent from causing additional harm. "
You can say it, doesn't mean it's true.
Reserving prison for "people but we can't prevent from causing additional harm" just means that people need to make sure their next crime is awful enough.
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I think it would be simple enough to prevent him from running another money laundering scam whether he was in jail or not. And as I've said before prisons should be reserved for people but we can't prevent from causing additional harm.
Your thinking needs to be re-scrutinized. Why wasn't it "simple enough" to prevent him from running a scam in the first place? What you are imagining is Singapore on steroids. Singapore is a lovely place but the fine grained controls on everyone's life so that everything they do is closely regulated is not implementable, or desired, anywhere else.
In the U.S. there are has been a collapse in the prosecution rate of white collar crimes, which were never diligently prosecuted ever, and for those that are prose
A Libertarian Walks Into A Bear` (Score:2, Flamebait)
You can read about a whole gaggle of Libertarian morons - including Ian Freeman, who appears within - in this hilarious book:
A Libterarian Walks Into a Bear [vox.com]
Anybody who identifies as a libertarian is stupid, full stop.
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amusing as fuck
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I'll bet 540 dollars you reply to me with an ad hominem attack.
amusing as fuck
Well, at least that wasn't an ad hominem.
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Anybody who identifies as a libertarian is stupid, full stop.
One could say the same for Republicans and Democrats. Or maybe substitute "Evil" instead.
I'm more of a classical libertarian - from before the Ayn Rand types took over (Ayn Rand actually hated libertarians despite some accidental intersections in desired policies).
What I'm not, thus, is an Anarchist looking for a better name, Randian, etc... I'm all for limited government - IE having designated powers that they have to stick to, not necessarily a small government. I also try to balance fiscal liberty wit
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I'm all for limited government - IE having designated powers that they have to stick to, not necessarily a small government.
This is what most liberals want..
Libertarians make it about size above everything else.
Note: Some of the regulation is just because we don't have the time to scrutinize fine print contracts for every single transaction.
More importantly, good regulation prevents people abusing their positions of power to a great extent.
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Interesting article. There's this:
"There’s a lesson in this for anyone interested in seeing it, which is that if you try to make the world fit neatly into an ideological box, you’ll have to distort or ignore reality to do it — usually with terrible consequences."
Off the top of my head, I'm reminded of the difference between theory and execution by the examples of Soviet Russia, the colony of Georgia in the pre-USA, and the Baghwan in Oregon. A counter-example that worked for a small society would be Quakers/Mennonites in the Pennsylvania area."
...and this...
"
One of the central characters in the book is a firefighter named John Babiarz. And John had the distinction of running for the governor of New Hampshire on the libertarian platform, and did better than any other gubernatorial libertarian candidate has ever done in America. And he invited the libertarians to come in and begin the Free Town Project. He was their local connection.
But by the end of the project [sometime in 2016], he had really drawn some distinctions between himself and many of the extremist libertarians who came to town. He still considers himself to be a libertarian, and a very devout one at that, but by the end of the project he was at odds with most of the other libertarians. And it shows that until you actually have a libertarian-run community, it’s very hard to say what it is or what it will look like.
"
This line "...by the end of the project he was at odds with most of the other libertarians." for some reason reminded me of that old joke during the OS wars, comparing Unix to building a plane: A group of people come together each bringing a piece of the aircraft, arguing constantly about what an airplane should be and how it should be designed.
It was stated better in the original--I should look it up for auld lang syne. (Does that make Unix libertarian? :)
Oh,
Re: A Libertarian Walks Into A Bear` (Score:2)
You can read about a woke hippie in the Bible but nobody does. Instead they read about the angry god.
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But this time, communism will totally work. Trust us.
Terrible summary. (Score:5, Insightful)
First that business was setup without any licening or registration, minor issue, then he used false records to make it look like a church owned the assests so he could protect it from taxes. he also instructed people to say in tax forms that they had donated money to his various fake churches.
It was then shown in court that he knew the scammers were using his site, and he would charge then up to 21%, for him to act as the middleman. Asking some questions is not going to cover you if you know people are using you for illegal activities.
The $40,000 is a fine, some for the lack of filing business papers. the next court action is to find out how much he will required to pay in restitution, and that will be in hte millions; the scammers had used him to take in over $10 million.
The trial for this took place last year when he was convicted.
Re:Terrible summary. (Score:4, Insightful)
For those that were wondering for him to receive 8 years and what was really happening.
First that business was setup without any licening or registration, minor issue, then he used false records to make it look like a church owned the assests so he could protect it from taxes. he also instructed people to say in tax forms that they had donated money to his various fake churches.
It was then shown in court that he knew the scammers were using his site, and he would charge then up to 21%, for him to act as the middleman. Asking some questions is not going to cover you if you know people are using you for illegal activities.
The $40,000 is a fine, some for the lack of filing business papers. the next court action is to find out how much he will required to pay in restitution, and that will be in hte millions; the scammers had used him to take in over $10 million.
The trial for this took place last year when he was convicted.
If anything this is a better argument that churches should not be tax exempt.
A church should have to pay taxes on it's profits. Churches that spend the majority of their income on charitable work would still not pay much, if any tax. Those who are just getting rich and only spending on expanding their church will have to pay.
I know it's as likely as finding a cache of rocking horse poo, but I digress.
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Yeah, it won't happen. Those mega-churches and such you see on TV rake in too much money in profits to not b
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The prosecution admitted that there were no actual victims of Freeman's actions. In a memo to the judge, the prosecution said that no restitution was owed. The judge took it upon himself to order restitution anyway.
Freeman maintains his innocence but requested during his allocution that any money taken from him go to scam victims rather than the government.
A Libertarian, you say? (Score:3)
He should get eight years just for that.
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Here's a different take on this story [reason.com] and a deep dive into Ian Freeman [nymag.com].
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I've been on /. long enough to remember when most people here leaned libertarian.
I used to be one of them. Then I grew up.
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I was going to write exactly that. I shall not commit Redundancy!
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And decided that despite the preponderance of evidence, that this time will be different, and you can learn to love big brother. LOL
Re: A Libertarian, you say? (Score:3)
What I decided is that with a government you might get representation, but with anarchy or feudalism (which is what anarchy becomes) you do not.
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> Here's a different take on this story [reason.com] and a deep dive into Ian Freeman [nymag.com].
Thank you, surprisingly good takes despite the nature of those websites.
Sounds like he was totally railroaded, did nothing wrong, and scammed noone.
They sent an undercover at him to entrap him, and he turned the man away.
His major sin was not sufficiently encrypting his computers. They used his records of people attesting that they knew they were buying bitcoin and not being scammed into false evidence that
Boy, our justice is messed up (Score:3)
It really is NOT about race/sex/gender/etc here, but about class. You have $ and you can get away with rape, murder, etc. Hell, Trump raped/created insurrection and he is still being voted for president
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Ian had NOTHING to do with the scams. He set up an unlicensed bitcoin exchange. Nothing more. Other than being unlicensed, he did nothing wrong.
OTOH, this rich woman pushed another well respected rich woman into the oncoming train, and then ran and tried to hide back home. It was FIRST DEGREE MURDER.
And she got 8.5 years vs his 8 years.
This is justice that is WAY OFF KILTER. She should have gotten 15-20 years.
Taken advantage of (Score:3)
"I don't want people to be taken advantage of,"
Says the guy who was running anything at all having to do with Bitcoin.
Journalist and Side Hustle (Score:1)
Sad regime story.
He's the head of the most-syndicated libertarian talk show on radio.
This would be like if they busted Rush Limbaugh for selling ugly ties in the 90's because he was a thorn in Clinton's side.
They tried to frame Freeman for kiddie porn several years ago and forensics proved the Feds used a 0-day flash exploit to do it. It may have been the SS agent who was convicted of stealing Silk Road bitcoin.
They got Julian Assange.
They got Owen Shroyer.
They got Ian Freeman.
Slashdot celebrates!
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The fact that he was an irritating Freestate jackass probably didn't help.
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"This would be like if they busted Rush Limbaugh for selling ugly ties in the 90's because he was a thorn in Clinton's side."
Sure, if selling ugly ties destroyed people's lives...and was illegal. Just like that. We know Rush Limbaugh loved destroying people's lives, but not by selling ties.
"Slashdot celebrates!"
As they should. Criminals meeting justice is worth celebrating, unless you're a criminal.