Montana Man Found Guilty in Massive $2.4 Million Scheme

A 73-year-old Montana man faces decades in prison after being convicted of laundering $2.4 million through cryptocurrency in connection with romance and business email scams that devastated victims’ life savings.

Key Takeaways

Randall V. Rule was found guilty on all counts of money laundering conspiracy and violating the Bank Secrecy Act after a three-day federal trial in Texas.
Rule and co-defendant Gregory C. Nysewander converted fraud proceeds from romance scams and business email compromises into cryptocurrency to disguise their origin.
The criminals disguised transactions as “loan repayments” and “advertising” to avoid detection by financial institutions.
Rule faces up to 20 years in federal prison for each money laundering charge and an additional 5 years for conspiracy to violate banking regulations.
The case highlights the growing use of cryptocurrency for money laundering and the government’s increasing focus on prosecuting digital financial crimes.

Elderly Montanan Convicted in Multi-Million Dollar Crypto Scheme

Randall V. Rule, 73, of Montana, was convicted on all counts following a three-day trial in the Eastern District of Texas for his role in a sophisticated cryptocurrency money laundering operation. Rule was indicted alongside Gregory C. Nysewander on November 16, 2022, on charges including money laundering conspiracy, money laundering, and conspiracy to violate the Bank Secrecy Act. The conviction highlights how criminals are increasingly turning to digital currency to hide illicit funds and evade traditional banking safeguards.

According to court documents, Rule and Nysewander operated a complex scheme that laundered proceeds from various fraudulent activities, including romance scams targeting vulnerable individuals, business email compromises that tricked employees into sending money, and real estate scams. The pair converted these stolen funds into cryptocurrency to obscure their source before transferring the digital assets to accounts controlled by both domestic and foreign co-conspirators.

73-Year-Old Montana Man Convicted in $2.4 Million Crypto Money Laundering Schemehttps://t.co/z5NoV5V21h

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Victims Devastated by Sophisticated Fraud Operations

The investigation revealed that Rule and his co-conspirators deliberately employed tactics to avoid detection by financial institutions. They made false statements about the nature of their transactions, labeling wire transfers as “loan repayments” and “advertising” to bypass scrutiny. The scheme exploited romance scams where fraudsters developed fake online romantic relationships specifically to manipulate victims into sending money, often targeting older Americans or those seeking companionship.

Business email compromise schemes formed another component of the operation, where hackers gained access to legitimate business email accounts to authorize fraudulent wire transfers or convinced employees to transfer funds through deception. The collective impact of these schemes totaled over $2.4 million, with many victims losing substantial portions of their life savings to the elaborate fraud operation.

Federal Agencies Collaborate to Combat Crypto Crime

The successful prosecution resulted from a coordinated investigation by the U.S. Secret Service and U.S. Postal Inspection Service as part of Operation Crypto Runner, an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. The case highlights the government’s intensifying focus on cryptocurrency-related financial crimes and the importance of interagency cooperation in addressing these sophisticated schemes that cross traditional jurisdictional boundaries.

Following the conviction, Rule now faces severe consequences for his actions. Each money laundering charge carries a maximum sentence of 20 years in federal prison, while the conspiracy to violate the Bank Secrecy Act charge could add an additional 5 years. U.S. District Judge Jeremy D. Kernodle, who presided over the case, will determine the final sentence after a presentence investigation by the U.S. Probation Office. Assistant U.S. Attorneys D. Ryan Locker, Dustin Farahnak, and Nathaniel C. Kummerfeld handled the prosecution.