The founder of a crypto token called AML Bitcoin has been sentenced to seven years in prison after being found guilty earlier this year of wire fraud and money laundering.
The US Department of Justice said on Tuesday that Rowland Marcus Andrade defrauded investors out of $10 million and used $2 million from the sale of AML Bitcoin to fund his personal expenses, including purchasing properties and luxury vehicles.
Prosecutors said Andrade also deceived investors by making false claims about AML Bitcoin’s technology and its business deals, one of which saw him claim that the Panama Canal Authority would allow the token “to be used for ships passing through the Panama Canal when no such agreement existed.”
The sentence comes below the government’s request to put Andrade behind bars for 17 and a half years. A California jury convicted Andrade in March on charges of wire fraud and money laundering in relation to AML Bitcoin.
“The defendant made one false claim after another about a sophisticated cryptocurrency offering to create the illusion of a legitimate business,” said San Francisco US Attorney Craig Missakian. “He exploited numerous investors who put their trust in him, not knowing that their hard-earned money was, in fact, funding his lavish lifestyle. Today, Andrade learned the price of his greed.”
Andrade to forfeit assets
Andrade will also have to forfeit assets, which will be used to reimburse his victims. The court will determine the amount to be forfeited for restitution on Sept. 16.
Andrade’s seven-year prison sentence will begin on Oct. 31. Upon completion of his prison sentence, he will be under supervised release for the next three years, where he will have to abide by court stipulations such as regularly checking in with police.
AML Bitcoin tied to lobbyist Jack Abramoff
Political lobbyist and convicted criminal Jack Abramoff was ordered to pay $55,000 in disgorgement for promoting AML Bitcoin in 2020. He was also permanently barred from participating in securities offerings.
Abramoff admitted to fraud, tax evasion, and conspiring to bribe public officials in a scandal involving Native American tribes wishing to develop a casino.
Related: IRS wants court to toss crypto exec’s appeal over bank record summons
In January 2021, a judge stayed an SEC lawsuit until Andrade’s criminal case was concluded, which suggests that relevant parties can file a request for a status hearing within 30 days of the resolution.
Prosecutors had requested longer sentence
Andrade’s seven-year prison sentence is far shorter than the more than 17-year prison sentence that prosecutors asked for in a July 22 filing.
However, the final sentencing was far longer than what Andrade’s legal team wanted, as they had sought a two-year prison sentence followed by supervised release.
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