Unlicensed B.C. bitcoin trader jailed in U.S. after federal sting
Louis Ong told agents to stop talking about drug dealing because he needed 'plausible deniability'
A DIY Vancouver bitcoin trader who begged federal agents posing as drug dealers to stop talking about where their money came from has been sentenced to 20 days in a U.S. jail — equal to time served.
Louis Ong pleaded guilty last week in Seattle U.S. District Court to operating an unlicensed money transmission business.
According to court documents, the 37-year-old told undercover operatives it was best if he didn't know anything about the sale of narcotics.
"I didn't hear that," Ong explained to one agent. "So there is one thing I tell people is I don't really care what ... they use the bitcoin for ... it's better that I don't actually know. 'Cause then I can have plausible deniability."
'I get the job done'
In addition to the jail sentence, Ong has also agreed to forfeit cash and bitcoin worth more than $1.1 million US.
According to the original complaint, the U.S. department of Homeland Security began investigating Ong in December 2016 after responding to an online advertisement advertising the anonymous buying and selling of bitcoin.
After an exchange of text messages, an agent met Ong in a McDonald's parking lot in Tukwila, Wash. to exchange $12,000 US for bitcoin.
Ong used a money counter to verify the amount and then transmitted bitcoin to a digital wallet using an iPhone. He claimed a fee of 7.3 per cent.
Agents later followed Ong as he deposited cash to a number of banks.
At the next meeting, the same agent asked Ong to trade $50,000 US for a fee of slightly more than nine per cent.
"I am charging ... higher than a lot of people, but because ... I get the job done, people come to me," he was recorded as saying.
'Your friends seem to be a bit open'
At one point in March 2017, Ong asked an agent who was acting as the 'boss' of the operation if his underlings could stop talking about drugs.
"I am not interested in what you buy or sell (bitcoin) for, so please do not mention it or have your friends mention it either," he said.
"Your friends seem to be a bit open about what you do when there is really no need to be."
After a uniformed agent confronted Ong, he registered with the federal U.S. agency tasked with stopping money laundering.
But then he proceeded to make three more transactions with undercover agents in violation of the rules.
According to Ong's sentencing memorandum, he moved to Canada from Singapore with his mother in 1987, graduating from the University of B.C. with a degree in computer science.
He is described as an entrepreneur who worked to develop video game software.
The U.S. government claims a forensic review of his digital device revealed that he had been involved in the world of bitcoin since at least 2013.
'He wanted to be his own boss'
Ong's friends and family filed a number of glowing letters with the U.S. court.
Ong has been living in Los Angeles with his sister pending the outcome of the charges. He volunteers with a church and a number of charities that help the homeless.
The references provide little insight as to how Ong got into bitcoin trading, though one letter from a Vancouver-area doctor describes Ong as a natural entrepreneur.
"Louis was forever looking for another (legal and honest) way to make money and he always seemed to have his fingers in several pies. He wanted to be his own boss and did not like the restrictions of a regular, 'nine-to-five' job," the letter says.
"When Louis called me recently, he explained to me what he had been doing and how in doing so, he had broken a law in the state of Washington."
According to a news release from the department of Homeland Security, Ong tearfully told the court he realized how his activities had "facilitated more people being exposed to addictive substances."
In addition to his jail sentence, Ong was also given three years of supervised release and will likely be unable to return to the U.S.
His lawyer told CBC News he was satisfied with the outcome.
"We are very pleased the judge recognized Louis' genuine remorse and let him leave court a free man as we had requested," read an email. "He has a very bright future in front of him."
- A previous version of this story suggested Ong would spend 20 more days in jail than already served.May 20, 2018 9:48 AM PT