The client was indicted on numerous federal charges related to the production and sale of fake identification over the dark web beginning in or around 2010. At the time of his arrest, law enforcement officers seized over 500 Bitcoin from the client, which the Government alleged to be the proceeds of the illegal activities. Due to the nature of the charges and the estimated value of the Bitcoin that was seized, the client was ordered to remain in federal custody during the pendency of the case.
The client eventually retained the law firm of Friedman Nemecek & Long to represent him in the case. After filing a Motion requesting that the client be released from jail the Judge ordered that the client be released from jail and placed on pretrial supervision.
Although the client admitted committing the offenses, there was a genuine dispute as to the proper valuation of the Bitcoin that he received, which would have a significant impact on the potential penalties that the client faced. The Government argued that the market value of Bitcoin at the time of sentencing was the proper means of calculating the total “loss amount.” Under the Government’s proposed theory, the client would have been responsible – and sentenced – for over $5,000,000.00. Conversely, firm lawyers maintained that the court should calculate the loss amount based on the value of Bitcoin at the time the relevant transactions occurred. Relying on block-chain records and publicly available databases, the defense was able to calculate the exact, real-time value of each Bitcoin transaction. The Government agreed to adopt this approach to calculating the loss amount, which ultimately yielded a significantly reduced sentence that was well below the recommended Guidelines’ range.