Lexington man pleads guilty to money laundering charge using Bitcoin

A Lexington County man was involved with trafficking drugs through the use of Bitcoin, an internet based currency, U.S. Attorney Bill Nettles said Friday.

Joseph Patrick Gelli, 23, plead guilty to conspiracy to commit money laundering after investigations found that he used Bitcoin to purchase marijuana and psychotropic mushrooms from illegal websites on “the deep internet”--a portion of the internet not available through common search engines like Yahoo or Google. Gelli had the drugs delivered to his house, and he sold them, according to the U.S. Attorney’s office.

A search of his home revealed drugs and $38,000 in cash.

Gelli faces a maximum penalty of twenty years of imprisonment and a fine of $500,000.

Bitcoin is a virtual currency that can be used in a wide variety of crimes involving tax fraud, money laundering, and other financial crimes, IRS special agent Thomas Holloman said .

“IRS-CI will continue to focus on financial crimes that involve virtual currency by collaborating with FinCEN, its internal business units and other federal law enforcement agencies to identify the movement of illegal monies utilizing virtual currency,” he said.

This story was originally published May 1, 2015 at 1:01 PM with the headline "Lexington man pleads guilty to money laundering charge using Bitcoin."