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BUFFALO — Richard Petix, 32, of Rochester, pleaded guilty to making material false statements and operating an unlicensed money transmitting business, before U.S. District Judge Charles J. Siragusa. The charges carry a maximum penalty of five years in prison.
Prosecutors say that Petix lied to federal probation officers and law enforcement agents about his ownership and use of a laptop computer and a smartphone. The defendant is on a term of supervised release following a 2009 conviction for knowingly transporting child pornography in interstate commerce. As a condition of that supervision, Petix was required to notify his probation officer of any computers he used and, as triggered by impermissible or suspicious activity, consent to examinations of such computers. As of Oct. 20, 2015, the defendant told his probation officer that he did not use any computers or the Internet.
On Dec. 3, 2015, Petix conducted a Bitcoin transaction with an undercover federal agent at a business in Buffalo. Using his laptop computer and smartphone, the defendant transferred approximately $13,000 in the form of 37 bitcoins to an address specified by the agent. When confronted by federal probation officers at the scene, however, Petix claimed that the laptop and smartphone were not his and that he could not access them.
Between August, 2014, and Dec. 3, 2015, Petix conducted over 100 Bitcoin transactions wherein he transferred over $200,000 in bitcoins to customers both locally and across the United States. At least some of these customers then used the bitcoins to purchase controlled substances from dark net vendors. At no time during this period did Petix comply with federal money transmitting business registration requirements.
Petix was scheduled to go to trial on May 1. Sentencing is scheduled Aug. 14.
