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A former Noblesville businessman has been charged with multiple counts of money laundering in connection to what federal prosecutors allege was his operation of an unlicensed cryptocurrency exchange.
A federal grand jury has returned a superseding indictment that charges Maximiliano Pilipis, 53, with five counts of money laundering and two counts of willfully failing to file a tax return, the U.S. Attorney’s Office for the Southern District of Indiana announced Monday.
The superceding indictment was filed Oct. 16.
Prosecutors allege that Pilipis created AurumXchange and operated it from 2009 through 2013, allowing individuals to exchange Bitcoin and other cryptocurrencies for U.S. dollars and other government-issued and virtual currencies. Federal law requires that money-transmitting businesses must be registered with the U.S. Treasury Department, but AurumXchange was not registered, prosecutors said.
AurumXchange facilitated more than 100,000 transactions totaling more than $30 million, prosecutors allege, and Pilipis collected millions of dollars in fees, including more than 10,000 Bitcoin, which at the time had a value of about $1.2 million.
Prosecutors say a portion of the funds passing through the AurumXchange allegedly came from accounts on Silk Road, an anonymous “dark web” marketplace that was shut down by federal authorities in 2013.
“As such, AurumXchange provided a safe haven for those who engaged in illegal activities to conceal their proceeds,” the indictment alleges.
Pilipis ceased operating AurumXchange in 2013, prosecutors say, and in 2018 he started converting his virtual currency proceeds into U.S. currency, which he invested and spent, including purchasing a property in Arcadia in 2018 for $119,454 and a property in Noblesville in 2019 for $278,954, the indictment alleges.
Pilipis sold the properties in 2021 for $139,560 and $297,360, respectively, according to prosecutors.
Pilipis also failed to file tax returns for the 2019 and 2020 tax years, prosecutors allege.
If convicted, Pilipis faces up to 10 years in prison and a fine of up to $250,000. Prosecutors are also requesting that Pilipis forfeit cash, cryptocurrency and other property related to the charges against him.
On Friday, Pilipis’ attorneys filed a motion asking the court to dismiss the five money laundering charges against him.
In that motion, Pilipis’ attorneys argue that AurumXchange’s failure to register as a money-transmitting business was not a crime during the time it was in operation. It was not until March 18, 2013, that the Financial Crimes Enforcement Network announced that virtual currency exchangers were considered money services business and thus required to register, the motion argues.
The defense team argues that the money laundering charges against Pilippis represent the government’s “effort to secure a colossal windfall” given the rise in Bitcoin’s value over the past 14 years.
Josh Minkler, a Barnes & Thornburg LLP attorney who is part of Pilipis’ defense team, declined to make additional comment on the case.
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