Father-Son Team Sentenced To Five Years Each For Laundering Cannabis Bitcoin Cash, Here's What Happened

The Department of Justice sentenced dad Kenneth Rhule and son Keith Rhule to five years for breaking some serious federal rules: conspiracy to manufacture and distribute cannabis and money laundering. What the duo had apparently intended to do with an undercover agent made their case even more distasteful.

Human Trafficking

According to the DOJ, Kenneth Rhule (dad) had agreed to exchange Bitcoin, BTC/USD, for cash and even offered some advice on using digital currency to hide funds. Rhule exchanged $142,000 worth of Bitcoin for cash with agents who were posing as human traffickers who wanted to launder money.

“Pair chose to defy state marijuana licensing scheme and laundered over one hundred thousand dollars from sales using bitcoin and dark web,” tweeted Western Washington's U.S. Attorney's Office.

At that same time, the DOJ said the Washington State-based Rhules were operating an unlicensed product business using cash and cryptocurrency to sell to customers nationwide and that the operation had grossed more than $13 million with a net profit of $2.5 million.

“Not only did this pair produce and distribute marijuana products on the dark web, in violation of the state’s regulatory scheme, they also illegally laundered immense amounts of Bitcoin that their enterprise earned. When law enforcement moved in, there were more than a dozen firearms – some loaded and ready to be used to protect their drug trade,” said U.S. Attorney Nick Brown, according to Decypt, which initially reported this story.

Blame It On Bitcoin

“Bitcoin’s use in crime continues to be a stick that regulators use to beat back the mainstream adoption of digital currency,” noted Decypt, adding the story of Jeremy Spence, a 25-year-old Rhode Island crypto trader who was sentenced to 42 months in prison for running what the DOJ called a “Ponzi-like” crypto investment scheme.