Ian Freeman believes he is, as a minister for the Shire Free Church in Keene, New Hampshire, a force for creating a more peaceful and just world. He thinks using and selling bitcoin is a key part of his ministry. As he said on a recent episode of his nationally syndicated radio show Free Talk Live, "I felt my calling to do this mission, to spread peace, and ultimately what bitcoin is doing is undermining the warmonger state. The more dollars are out of circulation, the more disempowered that state is."
Freeman—not the last name he was born with—moved to New Hampshire from Florida in 2006 as an early participant in the Free State Project (FSP) because he wanted to help create a political unit that respected its citizens' freedom (he is no longer associated with the organization). The FSP has made many strides in New Hampshire, and Freeman's early evangelizing efforts helped make Keene, NH, a major center of retail bitcoin commerce.
But Freeman still lives in a nation that considers the freedom to use whatever currency one wants in whatever peaceful way one desires as something that justifies a five-year multi-agency investigation that comes to a head with a squad of armed agents assaulting your home in pre-dawn darkness, throwing grenades, destroying your security cameras, shattering windows and frames with an extending arm from a BearCat G3 armored vehicle, and then locking you up in a cage.
This was all mostly because Freeman didn't follow federal procedures for permission to do what he did, or give the government what it considers its fair cut of any income he made. The feds took (among other things) about $180,000 in cash, some precious metals, and various computers from Freeman in their March 16, 2021, assault on his home.
Five of Freeman's associates were also arrested and charged that day in separate raids, but after various plea deals and one total charge dropping, Freeman was the only one to go to trial earlier this month for his alleged crimes. Freeman spent 69 days locked up after his arrest, with the government trying to argue he was a flight risk, eventually getting out on a $200,000 bond. The government imposed on him, as he says in an email this week, "a tracking anklet that would detect if I left my property….Spyware on my computer and phone. Restrictions on not being able to use crypto at all. A list of people I couldn't contact….The restrictions have destroyed my ability to help local businesses adopt cryptocurrency, which was a major part of my church mission."
The original indictment on Freeman and his friends insisted they'd "exchanged in excess of $10,000,000 for virtual currency."
Last week, a federal jury in New Hampshire found Freeman guilty on all the charges that ultimately went to trial. As Freeman's lawyer Mark Sisti explained in a phone interview this week, 17 out of 25 charges were dropped before the trial, many related to bank fraud and wire fraud; Sisti figures the feds realized it would be hard to convict on those because, among other reasons, there "was no loss to banks" in Freeman's actions.
Still, as the Department of Justice (DOJ) crowed in a press release, Freeman was convicted "on all counts of money laundering, conspiracy to launder money, operation of an unlicensed money transmitting business, and tax evasion (four counts)."
As per the government's general obsession with keeping track of every financial move we make, the government was upset Freeman did not, according to its regulations, sufficiently track and keep records on his customers. As the DOJ's press release spun the situation, "By failing to register his business with the Financial Crimes Enforcement Network as required by law, disabling 'know your customer' features on his bitcoin kiosks, and ensuring that bitcoin customers did not tell him what they did with their bitcoin, among other things, Freeman created a business that catered to fraudsters."
While he insists he deliberately harmed no one selling bitcoin via LocalBitcoins and a series of local bitcoin kiosks, the feds brought what they considered various victims of Freeman's actions to the stand during the trial. Some scammers had their victims send dollars to Freeman, who turned them into bitcoin which was then sent to the scammers, who were then harder to trace back to the scam/crime.
Freeman asserts in an email that after he became aware some scammers were using his service, he imposed his own version of "know your customer" (KYC) practices. "Typical requirements would be for the person to show ID, and take a selfie with them holding a handwritten note that said something like, 'I so-and-so am purchasing bitcoin from FTL_Ian on localbitcoins.com. I understand this transaction is non-refundable' with their signature and phone number," he says. With those and other practices, sometimes including phone calls to buyers, he notes, he felt he was doing "far more than the banks' requirements to send wire transfers or deposit cash, but [the banks from which the scam victims sent the money to Freeman] never caught criminal charges for 'assisting' scammers."
"The irony is," Freeman says, "my KYC records were used against me at trial. The feds had no idea who these people were prior to raiding my house and then got their info from my own computer. I had no idea they were victims of scams."
As noted by both associates of Freeman's blogging the trial's twists and turns, and by a Keene Sentinel reporter, the state seemed unable to get any of those victims (of scams including faked romantic interest to claims the scammer would help the victim with issues with Social Security payments) to say or prove on the stand that Freeman was consciously scamming them, or even aware for sure they were being scammed. Assistant U.S. Attorney Seth Aframe, a prosecutor in the case, in court tried to make the jury see this as Freeman being "willfully blind." But a government filing in the case spelled out that "the Government does not allege that Freeman conspired with these fraudsters to launder proceeds."
"Clearly, Ian was not a scammer," Sisti insists. "It's that simple. He is not a scammer. Their argument is that scammers used his platform and him to perpetuate their moneymaking scam."
A money laundering charge Freeman was convicted on was hooked to an undercover agent who Freeman refused to do business with directly after the agent let Freeman know he was a drug dealer. That agent then used one of Freeman's kiosks to turn cash into bitcoin. Freeman insists he did not encourage or know the person would do this, saying on the stand in the trial, "What should I have done? Tackled him? We don't have anybody there" guarding the kiosk to make sure no wrongdoer uses it.
The Financial Crimes Enforcement Network (FinCEN) has for years been insisting that even peer-to-peer bitcoin sellers are under its purview, and bitcoin kiosk machines have long been targeted by the DOJ. As Freeman says in his email, "My arrest was one of many similar arrests going on across the country over several years. I have a higher profile than some of these folks, but the pattern is the same. They target a peaceful bitcoin seller who has not harmed anyone and then hit him with so many charges he taps out for a plea deal." Freeman thinks it is part of "a really ugly picture of constant, desperate attack by the federal government against the crypto industry."
But in a motion to dismiss the charges that Freeman joined earlier in the case, it is asserted that FinCEN overstepped its legal power in trying to make Freeman's style of bitcoin sales illegal.
"The law that applies in this case did not authorize federal agency regulation of those engaged in the transmission or exchange of virtual currency. Virtual currency, which is now a multi-trillion-dollar part of the economy, did not even exist at the time the statute was passed," the motion asserted, further arguing that Supreme Court doctrine insists that "regulatory agencies cannot presume from a word or two in a statute to have the authority to regulate vast and important sectors of the American economy. FinCEN was not entitled to presume that one word in a 2001 statute predicted the invention of virtual currency in 2008 and delegated to a federal agency full authority to regulate what has become a trillion-dollar sector of the American economy."
Sisti, Freeman's lawyer, insists the conviction will be appealed, though he was not prepared to discuss on what grounds specifically. He did, however, mention that motion denying FinCEN's legitimate power, which might end up a possible line of legal attack.
Freeman's sentencing is scheduled for April, and prosecutor Aframe told The Keene Sentinel that Freeman could end up with more than eight years behind bars. Freeman is currently out of custody, though he's surrendered his passport and is under electronic monitoring on both his person and computer, until sentencing and likely appeal.
Freeman holds out hope his conviction will be overturned. But still, he knows "The dinosaur isn't going into the tar pits without doing some thrashing around. Someone was bound to get hurt in the process of introducing a potential dollar-killer to the marketplace."
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