On March 11, Kenneth Warren Rhule of Bothell made an appearance at the U.S. District Court in Seattle.
Warren is being charged with conducting an unlicensed money transmitting business, five counts of money laundering, and one count of conspiracy to produce and distribute marijuana.
Law enforcement placed him on their radar in April 2018 when Rhule was running an unlicensed Bitcoin exchange business under the name of “Gimacut93.” In addition, Rhule was conducting an unlicensed marijuana product business in Monroe.
On numerous occasions, undercover agents posing as criminals met Rhule at various establishments — Starbucks was the most frequented locale. In their interactions with the accused, the agents made it seem as if they intended to launder money from human trafficking activities. In return, Rhule proposed advice on cryptocurrency and how to conceal the source of funds.
Rhule is accused of knowingly conducting an unlicensed money-transmitting business in which he knew the funds were obtained through criminal activities, thus intending to promote illegal activity, from no later than April 11, 2018 until at least Dec. 6, 2018.
From no later than April 2015 until about December 2018, Rhule conspired to manufacture and distribute marijuana. Rhule operated three unlicensed marijuana businesses: HerbinArtisans, Heady.watr and KlearKrew. These businesses advertised and sold products, which were primarily distillates and concentrates, Instagram. With his clients, Rhule exchanged marijuana products for cryptocurrency.
The accused sold $110,000 in Bitcoin for cash from June 22, 2018 to Dec. 6, 2018. He avoided reporting the transactions under both federal and state laws.
Rhule is facing up to 20 years in prison for laundering monetary instruments and up to five years for operating an unlicensed money transmitting business. He is also facing a mandatory five years in prison, and up to 40 years for conspiring to manufacture and distribute the amount of marijuana involved in this case.
As of March 11, the case was being investigated by Homeland Security Investigations and the Drug Enforcement Administration.
