Ian Freeman, one of the Keene residents arrested earlier this month and charged by federal prosecutors with running an unlicensed scheme to sell virtual currency, will remain in custody pending trial, a judge ruled Monday.
U.S. Magistrate Judge Andrea K. Johnstone concluded that Freeman, if released, would be a flight risk because of his “substantial financial assets,” a lack of ties to New Hampshire and the length of his potential punishment. Freeman faces half a dozen charges, including one under which he would face a minimum of 10 years and up to life in prison if convicted.
Johnstone also ruled that Freeman, a locally known libertarian activist, poses a danger to the community because, if released on bail, he could continue running the alleged currency-exchange scheme that prosecutors say has helped scammers avoid detection.
He has been held at the Merrimack County jail in Boscawen since March 16.
Freeman was among six New Hampshire residents — including three from Keene and one from Alstead — arrested that day in the federal virtual-currency probe.
In multiple coordinated operations, FBI agents arrested Freeman, Aria DiMezzo and a man whose legal name is Nobody (formerly Richard Paul), all of Keene, as well as Colleen Fordham of Alstead and Derry residents Andrew and Renee Spinella. They also seized Bitcoin ATMs from multiple locations, including My Campus Convenience in Keene, Murphy’s Taproom in Manchester and the Red Arrow Diner in Nashua, according to staff at those establishments and reporting by the N.H. Union Leader.
Federal prosecutors say the six individuals arrested March 16 operated a business that since 2016 has enabled customers to exchange more than $10 million in fiat, or government-issued, currency for virtual currency.
In a March 15 indictment filed in the U.S. District Court for New Hampshire, prosecutors allege that the accused “knowingly operated” their currency-exchange business in violation of federal anti-money-laundering laws and regulations. They say the defendants made “substantial efforts to evade detection” by selling virtual currency via bank accounts established under either their own names or the names of purported religious entities.
Prosecutors also allege that several of the defendants told banks their accounts were used to receive church donations and also instructed customers to conceal from banks that the customers were purchasing virtual currency.
All six are charged with participating in a conspiracy to operate an unlicensed money-transmitting business.
In addition, Freeman, Fordham, Nobody, Andrew Spinella and Renee Spinella are charged with wire fraud and participating in a conspiracy to commit wire fraud. Freeman and DiMezzo are charged with operating an unlicensed money-transmitting business, though prosecutors say DiMezzo may have gotten involved as late as June 2020.
Freeman is also charged with money laundering and operating a continuing financial crimes enterprise. The latter charge carries a penalty of imprisonment for no less than 10 years and up to life.
The six defendants have pleaded not guilty to all charges, according to court records. Freeman and Nobody remain in custody, while the other four have been released on bail.
Jury selection for their trial is scheduled to begin May 4.
In a detention hearing held March 19, Assistant U.S. Attorney Georgiana L. MacDonald argued that Freeman would pose a flight risk if released before trial, due to the penalties he faces — which include forfeiting assets obtained via the currency-exchange operation — and his financial resources.
MacDonald said the FBI seized $178,000 from a safe in Freeman’s bedroom at his 73-75 Leverett St. home on March 16. She also told Johnstone, the magistrate judge, that Freeman has access to 28 Bitcoin — equivalent to approximately $1.6 million — and that an accountant indicated in 2018 that he had $300,000 in deposit accounts and $2.4 million in liquid assets.
MacDonald said Freeman misrepresented his wealth to probation officers after his arrest, and she argued that his alleged financial resources and lack of candor with government officials “raises concerns about his willingness to abide by conditions of his release,” if granted.
Freeman’s Chichester-based attorney, Mark Sisti, pushed back on those claims, however, saying probation officers did not ask Freeman to detail his virtual-currency holdings after his arrest and instead asked only how much money was in his “accounts.” Sisti also said Freeman owns property in Keene, has connections to the area, did not resist arrest and would be willing to accept release with certain restrictions on his electronic activities and virtual-currency operations.
“He’s a perfect example of an individual who should be let go on … bail,” Sisti said.
Johnstone sided with federal prosecutors’ arguments, however, ruling that Freeman’s “substantial assets support a finding that he is a flight risk.” She added that since most of his assets may be in cryptocurrency, they would be difficult for the government to track and could be accessed from anywhere.
In her order, Johnstone noted that Freeman has lived in New Hampshire since 2006 but said he lacks “meaningful ties” to the state and has regularly traveled abroad in recent years.
She said Freeman has family members in Florida and New York. Johnstone concluded that while he previously owned a home in Keene, he transferred it to the organization Shire Free Church in 2012. (Shire Free Church Holdings LLC purchased 73-75 Leverett St. from Freeman in 2013, and ownership was transferred a year later to Shire Free Church Monadnock, according to property records. The N.H. Secretary of State’s Office lists Freeman as chairman of Shire Free Church Monadnock’s board of directors.)
Johnstone added that Freeman’s primary occupation is as a radio host, which “does not require his physical presence in Keene.”
Freeman poses a further flight risk, Johnstone ruled, due to his possible sentence and “strong” evidence against him gathered during a five-year federal investigation, including electronic records, financial analysis, and communications with banks and virtual-currency exchanges.
“The lengthy potential sentence and strong evidence create an incentive to flee and weigh in favor of detention,” she wrote.
In concluding that Freeman would present a danger to the community, Johnstone explained that “dangerousness is not limited to physical acts of violence.”
She cited prosecutors’ allegations that cybercriminals bought virtual currency from Freeman — with his knowledge — in an effort to avoid detection by banks and government regulators. At Freeman’s detention hearing, MacDonald said investigators have identified people across the country who were tricked by scammers into sending money to him or other defendants.
“This operation clearly poses a danger to the community by enabling fraud and economic harm,” Johnstone wrote.