A San Francisco man, John Khuu, 28, has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.
Khuu admitted guilt to conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business, and importation of MDMA before U.S. Magistrate Judge John D. Love on March 26, 2024.
Court proceedings revealed that Khuu conspired with others to launder the proceeds of his drug trafficking organization through cryptocurrency. He imported and distributed counterfeit pharmaceutical pills and other controlled substances on dark web markets (DWMs) and elsewhere across the United States. Customers paid for their purchases by transferring cryptocurrency, predominantly Bitcoin (BTC), from their DWM accounts to one of Khuu’s vendor accounts. Khuu and his associates then traded the BTC for U.S. currency, laundering and transmitting the proceeds through hundreds of transactions and dozens of financial accounts.
Khuu was indicted on May 18, 2022, in the Eastern District of Texas for conspiracy to commit money laundering. Additionally, on August 17, 2022, he was indicted in the Northern District of California for unlawful importation of a Schedule I controlled substance. Khuu was arrested on August 19, 2022, at a residence in Garden Grove, CA, pursuant to both warrants.
At sentencing, Khuu faces a maximum of 20 years in federal prison. The sentencing will be determined by the court based on advisory sentencing guidelines and other statutory factors, with a hearing to be scheduled following a presentence investigation by the U.S. Probation Office.
This operation is part of the Organized Crime Drug Enforcement Task Forces (OCDETF), which identifies, disrupts, and dismantles high-level criminal organizations threatening the United States through a multi-agency approach. More information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The investigation was conducted by the U.S. Secret Service, U.S. Postal Inspection Service, and Homeland Security Investigations, San Francisco. The cases were prosecuted by Assistant U.S. Attorneys D. Ryan Locker and Nathaniel C. Kummerfeld for the Eastern District of Texas and Assistant U.S. Attorney Charles Bisesto for the Northern District of California.
