Convicted sex offender guilty of running unlawful Bitcoin operation.
In 2009, Richard Petix was convicted of knowingly transporting child pornography in inter-state commerce. After this conviction, he was released under supervision. As a condition of his supervision, Petix was required to notify his probation officer of any computers he used and, if there was any impermissible or suspicious activity, he was to allow examinations of these computers.
In October 2015, Petix lied to federal probation officers and law enforcement agents, after using a laptop computer and a smartphone at his home. Using these devices, he had conducted a Bitcoin transaction with an undercover federal agent at a business in Buffalo, transferring approximately $13,000 in the form of 37 bitcoins. Federal probation officers then confronted him at the business. When questioned, Petix claimed that the laptop and smartphone were not his, and that he had no access to them.
Between August 2014 and December 2015, Petix conducted over 100 Bitcoin transactions whereby he transferred over $200,000 to customers across the United States. Some of these customers then used the funds to purchase controlled substances on the dark net. At no time during this period did Petix comply with federal business registration requirements for the transfer of funds.