GRAND RAPIDS, MI — The ex-leader of the now-defunct The Geek Group has been ordered to prison for illegal Bitcoin trading that investigators say involved money laundering.
Christopher Boden, 46, was sentenced Friday, Feb. 25 in U.S. District Court in Grand Rapids to 30 months of prison with three years of supervised release following the incarceration.
Boden, in an earlier plea agreement, said he and two co-defendants operated an unlicensed money-transmitting business. He would sell Bitcoin to customers and supervised and directed others at The Greek Group to sell it.
Related: Ex-leader of The Geek Group pleads guilty in Bitcoin money-laundering scheme
Federal authorities, in a court document, said Boden knew that some of his customers were involved in buying and selling drugs and that “they sold these customers bitcoin knowing that the cash he received in return was derived from the sale of controlled substances, or that the bitcoin would be used to purchase controlled substances.”
The Geek Group, also known as the National Science Institute, a registered non-profit organization, provided educational opportunities, including use of high-tech equipment for students, inventors and others.
The organization would also handout used computers for little or no cost to children whose families were struggling.
In a sentencing hearing Friday, Boden was emotional as he read an apology letter.
Related: Former leaders of The Geek Group in Grand Rapids indicted for unregistered Bitcoin trade
He said his primary interest was to save his financially floundering company, which wasn’t taking in enough revenue to stay afloat.
“In a difficult situation, I made a very wrong choice,” Boden said in court. “My pride and desperate need to not to fail ended up destroying it all.”
He said he rationalized the illegitimate bitcoin sales as taking bad money and using it for good.
“I’m a decent teacher, but an incompetent businessman,” he said. “And I have no desire to run a company again.”
U.S. District Court Judge Robert Jonker said a significant issue was that Boden was selling “mixed” bitcoin to customers. Mixing is a way to obscure ties between Bitcoin digital addresses and personal identities.
“Customers were paying higher costs to Boden because they wanted the anonymity,” Jonker said.
He said the “clean anonymity” wasn’t available through traditional bitcoin exchange channels
Federal authorities said more than $740,000 in bitcoin was sold through The Geek Group.
Two co-defendants of Boden also were sentenced last week.
The Geek Group Executive Director Leesa Beth Vogt, of Grand Rapids, earlier pleaded guilty to structuring transactions to evade reporting requirement while consultant Daniel Reynod DeJager, of Tacoma, Washington, pleaded guilty to money laundering and conspiracy to operate an unlicensed money-transmitting business, court records show.
According to court records, DeJager was sentenced to 10 months in prison and three years of supervised release while Vogt was sentence to four years of probation.
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