A Colombia-based crypto broker known as “Rey” was sentenced in Manhattan on Wednesday 21 October to 160 months in US federal prison, a little over 13 years, for his part in a network that moved about $14.5 million of drug money through USDT, the Tether stablecoin. Judge Mary Kay Vyskocil also ordered Leonardo de Jesus Zuluaga Duque, 63, to forfeit $14,751,846 plus the tokens once held in four crypto addresses he controlled, according to the US Attorney’s Office for the Southern District of New York.
His sentence closes a USDT money laundering case first unsealed in May 2024: all six people charged then have now been sentenced. Drug cash collected in Colombia became Tether, the Tether went to the United States, an unlicensed over-the-counter desk turned it into dollars, and the dollars flowed back to Colombian companies to be paid out in pesos.
US Attorney Jamie McDonald said Zuluaga Duque and his partners “operated a sophisticated international scheme to utilize cryptocurrency, a network of shell companies in the U.S. and Colombia, and numerous crypto accounts”.
How the USDT money laundering route worked, from cash to pesos
The Justice Department describes Zuluaga Duque as a Colombia-based crypto broker who held a supervisory role in the network. His job was on the collection side. He worked with others to gather the proceeds of crime, including drug sales, and have them converted into Tether.
From there the money took a loop that prosecutors lay out in four steps:
- Zuluaga Duque worked with Erica Milena Lopez Ortiz to send the USDT to Maximilien de Hoop Cartier, who ran an unlicensed money transmitting business in the United States.
- Cartier converted the Tether into US dollars.
- Using US shell companies he controlled, Cartier wired the dollars to Colombian companies run by Felipe Estrada Echeverry and others.
- Once converted into Colombian pesos, the money was handed back to Lopez Ortiz and Zuluaga Duque to be distributed.
Between about May and November 2023, that loop carried roughly $14.5 million worth of Tether derived from drug trafficking, the release says. That is about seven months, or a little over $2 million a month on average.
The 2024 charging documents add detail on the US end. Cartier, who claims to descend from the family behind the jewellery house, controlled six shell companies, among them Bullpix Solutions LLC and Vintech Capital LLC, and opened accounts for them at several US banks. He told the banks the companies did software or technology work. Prosecutors said in the May 2024 announcement of the superseding indictment that they were in fact the payment rails of an unlicensed over-the-counter crypto exchange.
A 13-year sentence and the cocaine side of the case
The laundering was only part of the file. The same group was tied to cocaine deals that law enforcement had set up through confidential sources.
In November 2023, confidential sources working for investigators arranged with Lopez Ortiz and Alexander Egidio Areiza Ceballos to buy about nine kilograms of cocaine paste, to be processed and delivered to New York. Adrian Fernando Areiza Ceballos handed the drugs to an undercover officer, and Zuluaga Duque took a commission for helping set up the deal. In February 2024, a second deal was arranged for about 100 kilograms. Before it closed, the Colombian National Police searched two locations and recovered about 111 kilograms of cocaine paste from the Areiza Ceballos brothers.
When the indictment was unsealed in May 2024, Zuluaga Duque, then 61, faced a money laundering conspiracy count, with a 20-year maximum, and a count of conspiring to import five kilograms or more of cocaine, which carries a 10-year mandatory minimum and a maximum of life. The 2026 release does not say which counts he was finally convicted of, or whether he pleaded guilty or went to trial. On top of the 160 months, he received five years of supervised release.
He was taken into custody in Colombia on 30 April 2024 along with four other Colombian defendants; Cartier had been arrested in Miami on 22 February 2024. In February 2025 Colombia’s Supreme Court found no constitutional or legal obstacle to extraditing him, the Bogota legal daily Asuntos Legales reported. The Justice Department release does not give the date he arrived in the United States.
All six defendants are now sentenced
Judge Vyskocil sentenced the five co-defendants before Zuluaga Duque. The release lists their terms:
| Defendant | Role, according to prosecutors | Prison term | Forfeiture |
|---|---|---|---|
| Leonardo de Jesus Zuluaga Duque | Colombia-based crypto broker, supervisory role | 160 months | $14,751,846 plus tokens from four addresses |
| Maximilien de Hoop Cartier | Ran the unlicensed US money transmitting business | 96 months | $2.36 million |
| Erica Milena Lopez Ortiz | Moved USDT to Cartier, received pesos for distribution | 60 months | $14.75 million |
| Felipe Estrada Echeverry | Ran Colombian companies that received the dollars | 48 months | $14.74 million |
| Alexander Egidio Areiza Ceballos | Cocaine import conspiracy | 66 months | $9,650 |
| Adrian Fernando Areiza Ceballos | Delivered cocaine paste to an undercover officer | 36 months | $9,650 |
The forfeiture orders for Zuluaga Duque, Lopez Ortiz and Estrada Echeverry each come close to the $14.5 million laundered. The release does not say whether they overlap or are owed jointly, so they should not be added together.
Cartier’s sentence covers more than this network. He pleaded guilty and got eight years for defrauding US banks and using his unlicensed business to move more than $470 million in illicit proceeds through the United States, according to the release. In 2024 prosecutors said his business had been running since at least January 2020, well before the Colombian transfers began.
Why drug networks reach for USDT
The Justice Department did not explain in this case why the network chose Tether, and the court papers summarised in its releases do not name the blockchain the tokens moved on. The structure of the scheme shows what USDT did for it. The token is pegged to the dollar, so value collected in Colombia could be moved as dollars without going through a Colombian bank, then cashed out in the US by someone willing to take it. For readers new to the asset class, our guide to stablecoins explains how the peg and redemption work.
What the token did not do was hide anyone. The weak point sat at the off-ramp: Cartier needed US bank accounts to turn USDT into dollars and wire them south, and he opened those accounts by misdescribing his business. Prosecutors charged him with bank fraud and with running an unlicensed money transmitter for exactly that.
Converting stolen or dirty funds into USDT turns up in other US cases. In a March 2026 forfeiture action in Boston, prosecutors alleged that scammers sent victims’ ETH to intermediary wallets, converted it into USDT and moved it to unhosted wallets; the government said it had seized about 3,444,470 USDT in February and March 2025. Tether’s chief executive Paolo Ardoino points to the other side of that trail: public blockchains give authorities visibility “that simply does not exist with cash”, he said in a Tether statement on 28 September 2026.
What Tether and exchanges can freeze, and what this case does not say
Unlike bitcoin, USDT has an issuer that can act on individual addresses. Tether can blacklist an address, which stops the tokens in it from moving. In the 28 September statement Ardoino said Tether “can act when credible information is provided by law enforcement”, and the company said it works with more than 340 agencies in 70 countries. It said it had helped freeze about $550 million in Iran-linked USDT in 2026, including more than $344 million across two addresses in April.
Exchanges that hold customer funds can freeze accounts too. A 2023 forfeiture complaint in Massachusetts, for example, covered 87,637 USDT seized from an account at Binance.
None of that is described in the Zuluaga Duque release. It orders him to forfeit the tokens “previously contained” in four addresses, but it does not say how much they held, on which network, whether Tether froze them, or when they were taken. No source we found says Tether froze funds in this case.
Freeze timing is already a live question for the company. A Senate minority staff report in September said some flagged wallets were frozen months late, a claim Tether disputes; we covered that dispute in our report on Tether’s freeze record and the Senate staff findings. Our profile of Tether covers its reserves, regulators and blacklist history.
How the sentence compares with recent DOJ crypto laundering cases
Four recent Justice Department releases help put the case in proportion. Three involve crypto; the fourth is a cash case sentenced the same day:
- On 18 June 2025, the department filed a civil forfeiture complaint against more than $225.3 million in crypto tied to a laundering network serving investment scams. The Secret Service called it the largest crypto seizure in its history, and the department thanked Tether for its “proactive assistance”.
- On 14 September 2026, the same Manhattan office sought to forfeit about $61 million in crypto it says came from black-market sales of Iranian oil, laundered, it alleges, by two Chinese companies through trading accounts at Binance. That is an allegation in a civil complaint, not a finding.
- On 4 September 2026, Mexican national Carlos Erick Vazquez Gonzalez pleaded guilty in the Eastern District of Kentucky to a money laundering conspiracy over about $4 million in drug proceeds returned to Mexico through crypto. He is due to be sentenced on 17 December and faces up to 20 years.
- On 21 October 2026, the same day as Zuluaga Duque, a New York courier for a Chinese money laundering organisation, Shu Jun Zhen, got nine years in North Carolina. Her network laundered more than $92 million; her own role, the release says, was depositing about $23 million of bulk cash into shell company bank accounts, and it does not mention crypto.
Unlike the two forfeiture filings, the Colombian case ended in prison terms, and its release names the stablecoin outright, describing Tether as “a stablecoin connected to the U.S. dollar”. The Zhen sentence is the closest benchmark: nine years for a cash courier who admitted knowing the money came from drugs, against 13 years and 4 months for a crypto broker who also took a commission on a cocaine deal.
What it means for readers in the US and Europe
For US users, nothing changes in how USDT works. The case is a reminder that an over-the-counter desk converting crypto to dollars for others needs to be registered and licensed as a money transmitter, and that bank accounts opened under false pretences are where this one came apart. The GENIUS Act, which takes effect on 18 January 2027, treats permitted stablecoin issuers as financial institutions under the Bank Secrecy Act; the Treasury’s anti-money-laundering rules for them were proposed in April and are not final.
In the European Union, crypto transfers between providers have had to carry sender and recipient data since 30 December 2024 under the revised Transfer of Funds Regulation, and the bloc’s new AML Regulation will ban anonymous crypto accounts from 10 July 2027, as set out on our page on the EU AML Regulation. Europe has its own cases: Italian prosecutors this week described a mafia “hidden bank” that allegedly moved €68 million out through crypto, as we reported in our story on the Italian case.
What is still unknown
Several gaps remain after the sentencing. The release names no cartel or trafficking group behind the drug proceeds, and neither do the outlets that covered it. It does not say whether Zuluaga Duque pleaded guilty, which blockchain carried the USDT, or what became of the tokens in the four addresses. We found no public statement from Tether on the case.
The next date among the comparable cases is 17 December 2026, when Vazquez Gonzalez is due to be sentenced in Kentucky on a laundering count with no drug charge attached.