A California man has been sentenced to federal prison for his involvement in a cryptocurrency money laundering scheme. Acting U.S. Attorney Abe McGlothin, Jr. announced the sentencing of John Khuu, 29, from San Francisco, who was given an 87-month sentence by U.S. District Judge J. Campbell Barker on March 12, 2025.
Khuu admitted guilt to charges of conspiracy to commit money laundering and operating an unlicensed money transmitting business. The court heard that Khuu conspired with others to launder proceeds from drug trafficking through cryptocurrency transactions. He imported counterfeit pharmaceutical and MDMA pills from Germany and distributed them across the United States via dark web markets. Payments were made using cryptocurrency, mainly Bitcoin, which was transferred from customer accounts to Khuu’s vendor accounts. These funds were then converted into U.S. currency and laundered through numerous transactions and financial accounts.
Khuu faced indictment in the Eastern District of Texas on May 18, 2022, for conspiracy to commit money laundering. A subsequent indictment on August 17, 2022, in the Northern District of California charged him with unlawful importation of a Schedule I controlled substance. He was arrested on August 19, 2022, at a residence in Garden Grove, California.
The case is part of Operation Crypto Runner under the Organized Crime Drug Enforcement Task Forces (OCDETF) program aimed at dismantling high-level criminal organizations in the U.S., utilizing a coordinated approach involving multiple agencies.
Investigations were conducted by the U.S. Secret Service, U.S. Postal Inspection Service, and Homeland Security Investigations in San Francisco. Prosecution was led by Assistant U.S. Attorneys D. Ryan Locker and Nathaniel C. Kummerfeld for the Eastern District of Texas and Charles Bisesto for the Northern District of California.