Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 1 of 53

Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 2 of 53

Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 3 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 4 of 53
 Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 5 of 53

1 PROBABLE CAUSE
2 I. Summary of Investigation
3 9. The DEA and Homeland Security Investigations (“HSI”) are investigating
4 whether KENNETH RHULE sold bitcoins to individuals in exchange for cash without
5 registering with Financial Crimes Enforcement Network (“FinCEN”) or the Washington
6 Department of Financial Institutions (“DFI”), in violation of 18 U.S.C. § 1960.
7 10. RHULE, using the moniker Gimacut93, advertised in-person cash-for-
8 bitcoin exchanges on the website localbitcoins.com. From April 2018 until December
9 2018, law enforcement, or a cooperating source working with law enforcement,
10 exchanged more than $140,000 in cash for bitcoin with RHULE or his designee.
11 11. When completing these transactions, RHULE did not ask any “Know Your
12 Customer” information. In fact, RHULE conducted these transactions even after the
13 undercover agent explained that at least a portion of the cash involved represented
14 proceeds of human trafficking, in violation of 18 U.S.C. § 1956(a)(3).
15 12. In addition to selling cryptocurrency, RHULE, along with others known
16 and unknown, also manufactures and distributes marijuana distillates and extracts, in
17 violation of 21 U.S.C. §§ 841 and 846. RHULE appears to operate the companies
18 HerbinArtisans, Heady.Watr, and KlearKrew and sells his product under those monikers,
19 including through Instagram. Neither RHULE, HerbinArtisans, KlearKrew, nor
20 Heady.Watr are listed as applicants or licensees to produce, process, transport, or sell
21 marijuana or marijuana products in the State of Washington.
22 II. Cryptocurrency Exchanges
23 13. From April 2018 until November 2018, law enforcement, or a cooperating
24 source working with law enforcement, exchanged more than $140,0001 in cash for
25 bitcoin with RHULE or his designee. A portion of those exchanges are described below.
26
27
28 1
Unless otherwise specified, all references to dollars refer to United States Currency.
COMPLAINT/RHULE - 5 UNITED STATES ATTORNEY
700 STEWART STREET, SUITE 5220
USAO #2018R00575 SEATTLE, WASHINGTON 98101
(206) 553-7970
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 6 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 7 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 8 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 9 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 10 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 11 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 12 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 13 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 14 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 15 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 16 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 17 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 18 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 19 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 20 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 21 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 22 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 23 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 24 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 25 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 26 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 27 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 28 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 29 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 30 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 31 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 32 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 33 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 34 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 35 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 36 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 37 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 38 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 39 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 40 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 41 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 42 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 43 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 44 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 45 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 46 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 47 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 48 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 49 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 50 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 51 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 52 of 53
Case 2:20-mj-00097-PLM Document 1 Filed 02/28/20 Page 53 of 53