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A San Francisco, California man has pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs.
John Khuu, 28, pleaded guilty 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.
According to information presented in court, Khuu conspired with others to launder the proceeds of his drug trafficking organization through cryptocurrency. Khuu imported and distributed counterfeit pharmaceutical pills and other controlled substances on dark web markets (DWMs) and elsewhere to customers across the United States. Customers paid for their purchases by transferring cryptocurrency, usually Bitcoin (BTC), from their DWM customer accounts to one of Khuu’s vendor accounts. Khuu and his co-conspirators traded the BTC for U.S. currency and laundered and transmitted the proceeds through hundreds of transactions and dozens of financial accounts.
Khuu was indicted on May 18, 2022, in the Eastern District of Texas and charged with conspiracy to commit money laundering. On August 17, 2022, Khuu was indicted in the Northern District of California and charged with unlawful importation of a Schedule I controlled substance. On August 19, 2022, agents arrested Khuu pursuant to both warrants at a residence in Garden Grove, CA.
Khuu faces up to 20 years in federal prison at sentencing. The maximum statutory sentence prescribed by Congress is provided here for information purposes, as the sentencing will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the U.S. Probation Office.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.
The cases were investigated by the U.S. Secret Service, U.S. Postal Inspection Service, and Homeland Security Investigations, San Francisco, and 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.