Colombia-based crypto broker gets 160 months for laundering drug proceeds in Tether
Leonardo de Jesus Zuluaga Duque was sentenced in Manhattan federal court for his role in a network that, prosecutors say, moved drug money as Tether through the US to Colombia.
On 21 October 2026 the US Attorney's Office for the Southern District of New York announced that Leonardo de Jesus Zuluaga Duque, also known as "Rey", a 63-year-old resident of Colombia, was sentenced by U.S. District Judge Mary Kay Vyskocil to 160 months in prison. He was charged with five other defendants in connection with schemes to launder hundreds of millions of dollars, including drug sale proceeds, and to import nine kilograms of cocaine into the United States.
According to the US Attorney's Office, Zuluaga Duque was a Colombia-based cryptocurrency broker with a supervisory role in an international network. The network collected the proceeds of crime, including drug trafficking, that had been converted into Tether, a stablecoin tied to the US dollar. The Tether was transferred to co-defendant Maximilien de Hoop Cartier, who ran an unlicensed money transmitting business that converted it into US dollars. De Hoop Cartier then used US-based shell companies he controlled to send the dollars to Colombian companies. Once converted into Colombian pesos, the money was delivered back for distribution.
Prosecutors say that between about May 2023 and November 2023, Zuluaga Duque and others laundered a total of about $14.5 million in Tether derived from drug trafficking. De Hoop Cartier previously pleaded guilty and was sentenced to eight years in prison for defrauding US banks and using his unlicensed money transmitting business to move more than $470 million in illicit proceeds through the United States.
The case was investigated by the FBI's New York Field Office, Homeland Security Investigations' New York El Dorado Task Force and IRS Criminal Investigation's Global Illicit Financial Team.
Why it matters to AML professionals
Stablecoins can be used to move drug proceeds across borders quickly, then turned back into fiat currency through businesses that look like ordinary companies. The weak points are often the conversion steps, where a money transmitter or shell company receives crypto-linked funds and wires dollars abroad. AML professionals at banks and crypto firms need to watch for accounts whose activity looks like unlicensed money transmission.
Red flags in this case
- A business account receiving large inflows from crypto exchanges or OTC desks and quickly wiring the funds abroad
- Several newly formed US companies with no clear operations sending repeated wires to the same foreign companies
- A customer converting stablecoins to US dollars at a volume that does not fit its stated business
- Payments that look like money transmission from a business with no money transmitter licence or registration
If this landed in your queue
- Compare the account's crypto-related inflows and outbound wires with the expected activity recorded at onboarding
- Check whether the customer is registered or licensed as a money transmitter where required
- Identify connected accounts and companies sharing owners, addresses or counterparties
- Escalate and file a suspicious activity report if the activity suggests unlicensed money transmission or layering of illicit proceeds
Key terms
- Tether (USDT)
- A stablecoin, a type of cryptocurrency designed to keep a value tied to the US dollar.
- Unlicensed money transmitting business
- A business that moves money for others without the licence or federal registration the law requires.
- Shell company
- A company with little or no real business activity, often used to hide who owns or moves money.
Interview angle
How can stablecoins be used to launder drug proceeds across borders?
Describe converting cash proceeds to a stablecoin, transferring it to someone who converts it to dollars, and wiring the dollars through shell companies abroad; then explain the monitoring points at each conversion step.
Sources
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