Bitcoin exchanger gets 4 years in prison

NEW YORK (AP) - A Florida bitcoin exchanger who admitted he enabled the digital currency to be funneled to the black market website Silk Road for drug sales was sentenced on Tuesday to four years in prison.

U.S. District Judge Jed Rakoff noted that Robert Faiella had been convicted in a tax case previously and his sentence needed to be long enough to deter him from committing other crimes.

"In his case, clearly he didn't learn the lesson," said the judge, who also ordered Faiella to forfeit $950,000.

Faiella, 55, pleaded guilty in September to operating an unlicensed money transfer business. The Fort Myers Beach, Florida, resident admitted earning about $30,000 in commissions by enabling drug transactions from December 2011 through October 2013.

His co-defendant, Charles Shrem, who was the top executive of a New York-based bitcoin company, pleaded guilty in September to aiding and abetting the operation of an unlicensed money transmitting business. He was sentenced last month to two years in prison.

Faiella and Shrem were accused of letting more than $1 million in bitcoins reach the Silk Road website. Authorities have said Silk Road's San Francisco operator generated more than $1 billion in illicit business from 2011 until the website was shut down in 2013.

Published: Thu, Jan 22, 2015