By: Sam Thorpe
10/19/2021
Christopher Boden, former president of the Grand Rapids Maker-space the Geek Group, pled guilty to three counts of money laundering and related activities in a plea agreement filed on September 30th, 2021. Three associates of his pled guilty to money laundering related financial crimes as well; Daniel DeJager, pled guilty to two counts, one of conspiracy to operate an unlicensed money transmitting business, the other money laundering. Jeremy Swink, a longtime volunteer at the Geek Group pled to operating an unlicensed money transmitting business. Lisa Vogt, the Executive Director of the Geek Group, pled to the financial crime of ‘structuring’, which is to deposit amounts of money under $10,000 to avoid the mandating reporting required of banks. Swink’s indictment and plea were conducted separately and earlier than the other three.
The Geek Group was raided in 2018 by the IRS and the Department of Homeland Security, following with the Group’s President Boden explaining that the group “cannot sustain operations anymore” and that the company had a “debt load of about $20,000 a month”, according to this mLive article from 2018. The Geek Group leadership mentioned earlier were indicted on February 24th, 2021 for their parts in the money laundering scheme. Swink was sentenced to probation on July 8th, 2021, the sentencing dates for DeJager, Boden and Vogt are set for February of 2022.
The Story
The descriptions and information for this part comes from the indictment of the three primary individuals as well as the plea agreements filed by all four. The indictment includes further charges which will be dismissed as parts of the plea agreements, and as such, those will not be focused upon. All individuals are innocent until proven guilty in the court of law, and with those other charges being dismissed without the individuals pleading guilty to them, they retain the presumption of innocence in regard to those.
The operation was relatively simple. Chris Boden began the scheme with the idea to sell the cryptocurrency Bitcoin at the Geek Group, generally from the front desk. This front desk was where Jeremy Swink often volunteered. Swink would initially sell up to $10,000 worth of Bitcoin, but that would be reduced to under $1,000, with Chris personally handling any transactions over $10,000. Under section 5330 of title 31 of the United States Code, businesses which exchanges or transmits currencies must register with the Federal and State Governments as part of efforts to combat money laundering. This was one of the crimes committed, failing to register as a money laundering business.
The Bitcoin sold was acquired from Daniel DeJager, who would purchase the currency from online exchanges using the money from the sales made by Swink and Boden. DeJager would take the crypto purchased at different times and on different exchanges and ‘mix’ it. This was supposed to disguise the origin and ability for the coin to be tracked. Boden used this as a sales tactic to promote his illegal exchange, saying that coin purchased on online (legal) exchanges could be tracked and was ‘dirty’, whereas his was untraceable and ‘clean’. DeJager knew the exchange at Geek Group was illegal and participated in that knowingly.
After Bitcoin was sold, Boden would direct either Swink or Vogt to take the cash and deposit it in a Chase bank account shared between Boden, Vogt and DeJager. Boden directed Swink and Vogt to keep any deposits under $10,000 to avoid reporting requirements levied on banks from the Federal government. This crime is called structuring, intentionally evading the reporting requirement that financial institutions face. The money deposited would then be used by DeJager to purchase more Bitcoin and the scheme would repeat. Hundreds of deposits and transfers account for more than $740,000 in sales of Bitcoin.
At one point, an undercover operative bought Bitcoin from DeJager and Boden for $15,000, and had earlier attributed that cash to the sale of cocaine illegally. Boden took the money, had Swink and Vogt deposit the money into Chase bank accounts in amounts under $10,000, and the supposed Cocaine money was then transferred to Cryptocurrency exchanges for DeJager to then purchase more Bitcoin. Here the illegal money transfer enterprise engaged in structuring and then money laundering of cash which the individuals believed resulted from illegal drug sales.
The Crimes
18 U.S. Code § 1960 prohibits unlicensed money transmitting businesses in the United States. This was the crime committed by Boden, DeJager and Swink when they transferred and sold Bitcoin at the Geek Group.
18 U.S. Code § 1956 (a)(3(B) prohibits money laundering, specifically (a)(3)(B) relates to intending “to conceal or disguise the nature, location, source, ownership, or control of property believed to be the proceeds of specified unlawful activity”. The specified unlawful activity was the sale of Bitcoin supposed to be untraceable for cash which was received in the sale of Cocaine (an unlawful activity). This crime was committed by DeJager and Boden when they met and did business with an undercover agent.
31 U.S. Code § 5324 (a)(3), (d) prohibits structuring transactions to evade reporting requirements, which in this case refers to federal law requiring banks to report deposits over $10,000. (a)(3) refers specifically to structuring with one or more financial institutions, and (d), which increases penalty when the crime is over $100,000. Boden, Swink and Vogt committed this crime through their hundreds of deposits to banks with amounts under $10,000, all while knowing that this was to avoid the reporting requirement.
The Aftermath
Jeremy Swink has been sentenced to two years of probation following his participation in this saga. Boden, DeJager and Vogt are set to be sentenced in February of 2022, with varying levels of possible punishments being available. Vogt could face up to 10 years of prison and a $500,000 fine, and has already forfeited around $62,000 which was involved with what she has plead guilty to in the plea agreement. DeJager could see similar maximum imprisonment and fines, and has already forfeited $25,000 which was involved in what he pled guilty to. Boden may be subject to a maximum of 20 years of imprisonment and fines over $500,000. Boden has forfeited $75,000 related to one of the counts he has pled guilty to, as well as around .3 of Bitcoin found and the devices which contained the wallets, obtained during the 2018 raid, which were key to the investigations and prosecution.
A significant jail or prison sentence for any of the three individuals still awaiting sentencing seems unlikely. The most likely conclusion to this whole debacle may result in time served with fines and probation for DeJager and Vogt, and either time served or 6 months to 2 years of jail time along with fines for Boden. These days, jail time seems quite unlikely for financial and non-violent crimes in general. The Geek Group building, a former YMCA on Leonard Street in Grand Rapids, Michigan, has sat vacant and empty following the 2018 raid. The property has been purchased and plans are in the works to turn the site into an apartment building and mixed-use development.
Read the Justice Department press release here.
Links and sources from the article: