Aria DiMezzo of ‘Crypto 6’ sentenced to 18 months for bitcoin fraud

Freeman is still awaiting sentencing and attended DiMezzo’s hearing in U.S. District Court in New Hampshire to support her as a friend, he told the Globe.

Scammers would court their victims – who were often vulnerable, elderly people – posing as a romantic interest, pretending to develop a relationship with the victim online. The scammer then told the victim they were in trouble and needed money, and used a business like DiMezzo’s or Freeman’s to transfer and launder the money, converting it from cash to bitcoin.

Three other members of the Crypto 6 who were accused of wire fraud received sentences that did not involve jail time. But federal prosecutors argued that DiMezzo was more involved in Freeman’s business, taking on some of his clients and opening bank accounts when he no longer could. After she serves the 18-month sentence, DiMezzo will also have one year of supervised release.

Prosecutors asked for a maximum sentence of 37 months, arguing that DiMezzo had willfully and intentionally turned a blind eye to the unsavory customers her business attracted and had designed a business that would facilitate those kinds of transactions. DiMezzo’s business did not have the same safeguards as a regulated financial institution.

“Because it wasn’t a safe business, people got hurt,” said Seth Aframe, an assistant U.S. attorney. “People gave money to DiMezzo’s business and they were defrauded.”

DiMezzo and her attorney pushed for her to serve a year of home confinement without any jail time. Both DiMezzo and her attorney claimed she had no idea the transactions were part of a scam.

“As misguided as she was about the licensing issue, she was not trying to defraud anyone,” her attorney Richard Guerriero told the judge, Joseph Laplante. “The only thing she did wrong was not having a license.”

And they said the judge should take into account other factors of DiMezzo’s identity when determining her sentence, such as the particular risk prison might pose to her as a transgender woman. DiMezzo’s attorney portrayed her as someone who escaped a troubled home in northern Mississippi with drug-addicted parents and now lives humbly: a 36-year-old woman with no criminal record who rents a house, lives with her dog and works as an assistant. manager at Domino’s.

The summer of 2020 was the height of DiMezzo’s crypto business, which prosecutors estimate involved the exchange of $3 million. DiMezzo charged a transaction fee of about 10 to 20 percent.

Prosecutors played a video for the judge before handing down the sentence, which showed DiMezzo instructing others never to ask what a client uses bitcoin for and to end the relationship if a client ever divulges that information. They also showed a clip in which DiMezzo calls the elderly victim of a romance scam “stupid” and “an idiot.”

“It’s a recipe for disaster and makes the crime more aggravated than just not getting a license,” Aframe said.

Judge Laplante ultimately ruled that it did not matter much whether DiMezzo knew she was harming the victims, but that his sentence would reflect the fact that they were harmed.

“I have nothing but regrets,” DiMezzo said, adding that she reckoned with his “arrogance.” Cryptocurrency like bitcoin has a strong ideological appeal to DiMezzo and other libertarians, who value financial privacy. DiMezzo compared it to paying someone to mow a lawn — then she wouldn’t ask someone what they’re going to spend the money on.

She said she operated under the belief that government is not good. “I thought we frustrated the banks,” she said, pointing to examples of big banks like Bank of America and Wells Fargo. “My goal was to bring down the banks.”

She said she regretted calling one of the scam victims stupid and said she began therapy shortly after the incident.

Earlier in April, DiMezzo agreed to hand over about 2 bitcoins worth between $50,000 and $60,000 to authorities to help victims of the scam.

“The point was not to help with sentencing. The point was to help the fraud victims, she told the Globe ahead of the hearing. – That’s how I managed it. I didn’t know they were scam victims at the time.”

A group of about 30 people gathered to support DiMezzo. Some wore black t-shirts that read “Bitcoin is not a crime.” Others began to cry after the verdict was handed down.

“She means a lot to a lot of people,” Freeman said. “She never hurt anyone.”

DiMezzo has 14 days to appeal the sentence.

Amanda Gokee can be reached at [email protected]. Follow her on Twitter @amanda_gokee.