Bitcoin of America arrests: Ohio cryptocurrency kiosk operation

by James · March 2, 2023

CLEVELAND — Three people and a business are facing charges for allegedly illegally owning and operating cryptocurrency kiosks across Northeast Ohio.

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Cuyahoga County Prosecutor Michael O’Malley announced details of the operation during a news conference Thursday, saying two arrests occurred in Chicago and one in Miami.

Those arrested include the owner and founder of S&P Solutions, Sonny Meraban, Meraban’s father, and William Suriano, an attorney for Bitcoin of America.

Authorities say the company charged — S&P Solutions — did business as Bitcoin of America.

The full press conference can be seen below:

Table of Contents

THE OPERATION

On Wednesday, March 1, multiple law enforcement agencies executed 54 search warrants in Cuyahoga and Lorain counties during an operation that included 29 law enforcement agencies.

A total of 51 bitcoin machines operating under Bitcoin of America were confiscated across the two counties. 41 of the machines were found in Cuyahoga County and 11 in Lorain County.

“These ATMs were seized, 52 of them, yesterday from primarily gas stations in the neighborhood,” said Andrew Rogalski, Financial Crimes Supervisor and Assistant District Attorney. “These ATMs look like any other ATM. Basically, you put money in and you tell the machine where you want to send cash that is converted into cryptocurrency that can go anywhere in the world, usually using a QR code or barcode that you can scan from your phone. These ATMs are ready for scammers. The scammers here, whether romance scams or law enforcement impersonators, will direct their victims, who are often elderly or otherwise vulnerable, to specifically go to Bitcoin from US ATMs, take money they’ve withdrawn from their savings accounts or 401Ks, put it into the Bitcoin machine and send it to a wallet sent to them over the phone – which they may think is their own wallet, but actually belongs to a third party which could be anywhere in the world.”

FEES

All three individuals are charged with the exact same crimes, which are listed below:

Engage in a pattern of corrupt activity
Conspiracy (2 counts)
Money laundering (7 counts)
Receiving stolen property (9 counts)
Violation of CTS license requirements (33 points)
Tampering with records (5 counts)
Has criminal tools
Tax

“We’re dealing with a new industry of cryptocurrency, but we’re not dealing with new laws,” Rogalski said. “The same laws and legal theories apply to this business as any other business. Cryptocurrency is money. If you are a money transmitter in the state of Ohio, you must have a license.”

THE INVESTIGATION

Officials noted that one of the biggest problems was that Bitcoin of America took about 20 percent of the money deposited in each transaction at the bitcoin ATMs.

“One of the main problems was certainly the machines that weren’t licensed in the state of Ohio, and these people were taking 20 percent of every transaction that happened in the machine,” O’Malley said. “However, these machines were also used to defraud elderly people in Northeast Ohio, including eight victims who were led to these machines by fraudulent means to transfer money.”

Rogalski gave an example of an elderly gentleman being defrauded in Northeast Ohio.

“There is one case where an elderly gentleman in one hour made three transactions on the same Bitcoin of America machine, all in excess of $2,500, all to the same third-party wallet. The $11,250 went to him within seconds. So Bitcoin of America does little to prevent these transactions and even less to help when the victim realizes they are a victim of crime.”

According to US Secret Special Agent Blaine Forschen, authorities began receiving reports from a number of elderly fraud victims who were defrauded by ATMs operated and owned by Bitcoin of America in September 2021, prompting an investigation. In October 2022, the task force and investigative unit presented the case to the Cuyahoga County Prosecutor’s Office.

Officials believe that since 2018, Bitcoin of America has evaded numerous regulatory safeguards and financial compliance requirements in Ohio by “misrepresenting the company’s role in transferring funds through cryptocurrency.”

EDITOR’S NOTE: The video above previously appeared on 3News on March 1, 2023, in an unrelated story.