NEW YORK — Samourai Wallet developer Keonne Rodriguez was sentenced Thursday to five years in prison for his role in creating a Bitcoin mixing service. Prosecutors allege the service was used to launder $237 million in dirty money.
District Judge Dennis Cote of the Southern District of New York (SDNY), who oversaw the case, handed down the verdict after about an hour of hearing in federal court in downtown Manhattan.
Rodriguez’s five-year sentence is the maximum statutory penalty for his crime. In a government sentencing memo filed in court on Oct. 31, prosecutors urged Judge Cote to impose that maximum sentence, writing that the two intentionally and knowingly laundered “proceeds from drug trafficking, darknet markets, cyber intrusions, fraud, murder-for-hire schemes, and child pornography websites” through Samurai Wallet. Mr. Rodriguez’s lawyer, in his own sentencing submission, suggested a sentence of one year and one day in prison.
Rodriguez and fellow Samurai Wallet developer William Lonergan Hill were arrested last April and charged with money laundering and conspiracy to operate an unauthorized money transfer business. The pair fought the case for more than a year, but in July they reached a surprising agreement with prosecutors, agreeing to plead guilty to a lesser charge of conspiracy to commit unauthorized money laundering in exchange for a charge of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, to be dropped.
Their changes come during the trial of fellow developer Roman Storm, also in the Southern District of New York. Storm, who, like Rodriguez and Hill, was one of the creators of the once-popular cryptocurrency privacy tool TornadoCash, was charged with conspiracy to operate an unauthorized money transfer business and conspiracy to commit money laundering, with an additional charge of conspiracy to violate international sanctions. A Manhattan jury found Storm guilty only of the unauthorized transfer charge, and could not reach a unanimous verdict on the other two charges. Prosecutors have not yet indicated whether they plan to retry Mr. Strom on the two strangulation charges.
Hill is scheduled to be sentenced by the same judge Friday at 11 a.m. ET.
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