Posted on

Bitcoin-Western Union Drug Sellers Nailed in NY, First BTC Money Laundering Case Recorded in Area

Another criminal use case of Bitcoin on the dark web is brought to light, this time in New York, Manhattan

Earlier this week, a District Attorney’s Office in Manhattan published a press release, detailing a case of Bitcoin money laundering by drug dealers that used both crypto and Western Union payments for selling illegal substances across the US and abroad.

Drugs, Viagra via Bitcoin and Western Union payments

The two accused, Crain and Sanchez confessed in court that they had been operating a drug business by accepting payments in Bitcoin and through the global platform Western Union.

The defendants had been running their shop for around 5 years, since 2013 up to 2018, and during that period they had sold 10,000 packages of steroids and other illegal substances that cause a harmful addiction. Over that time, they managed to make nearly $3 mln.

The abovementioned press release says that the accused used several crypto wallets, so as to make fund tracing difficult. They then sold BTC on a crypto exchange to convert it into fiat and then put the regular currency on their bank accounts.

As for the Western Union payments, they were made under fake identities
from senders.

The dark web store ‘NextDayGear’

Sanchez and Crain also were offering drugs by using a few sites they ran on the dark web. People bought their ‘goods’ in China and throughout the US, from nearly every state.

Their dark web stores ran under the name ‘NextDayGear and sold steroids
along with sedatives to reduce the effect from steroids and Viagra.

As per the press release, among the customers of the shop were sportsmen
of various scales, police force members, the military, as well as other drug
dealers, lawyers, doctors and a school teacher.

As for the means, how these BTC payments were traced, the District Attorney stated that his office has wide resources and skilled professionals for that. The press release also states:

“This was the first conviction for money laundering involving cryptocurrency by New York State prosecutors.”

Criminals use crypto equally to traditional payments

This criminal case is yet another evidence that criminals do not prefer Bitcoin
and crypto over traditional legal payment systems and cash.

Last year, several reports came out, confirming that, including the one by Europol:

“The use of cash by criminals remains one of the most significant barriers to successful investigations and prosecution. It is a threat that has not received sufficient international attention or legislative solutions.”

Another evidence was publicly presented by director of analysis for the Foundation for Defense of Democracies, Yaya J. Fanusie, to the US Congress last year.

The post Bitcoin-Western Union Drug Sellers Nailed in NY, First BTC Money Laundering Case Recorded in Area appeared first on Ethereum World News.

Posted on

Dark Web Drug Dealers Arrested for Laundering $2.3 Mln In BTC

In the US, three drug dealers were arrested after laundering over $2 mln in Bitcoin on the dark web

The three criminals arrested in the US on Tuesday were charged with running stores on the dark web. Codd, Maccarty and Anderson had been selling counterfeit Xanax tablets and other drugs to people in over 40 states.

Great amount of drugs confiscated

During the arrest, the law enforcement agencies found the greatest shipment of pills that had ever been seized in New Jersey, says the press release. Those included around half a million alprazolam pills, fentanyl-laced heroin, methamphetamine and other substances that cause addiction and a serious damage to health.

Apart from that, the police seized equipment for making drugs and crypto worth thousands of US dollars.

The arrest and charges

All the three were arrested and given charges of 4th and 5th degree of conspiracy. Money laundering was another charge, as well as selling drugs and identity theft.

The investigators that conducted the arrest had been watching several ATMs in New York and New Jersey. Later on, they used the help of their Cyber Lab to trace where the money goes. Afterwards, the suspects were found.

The court documentation says that it was Anderson who ran two stores on the dark web selling the drugs. The other two criminals assisted him in producing drugs and buying the necessary gear for that.

To conduct the arrest, agents, working
undercover, had to purchase several thousand alprazolam pills, as well as GHB
and ketamine from the dark web stores operated by the arrestees.

Here come Bitcoins

All the three arrested received payments for the drugs in Bitcoin – over $2.3 mln overall. They put the crypto on pre-paid cards and managed to withdraw over $1 mln from ATMs located in New Jersey and Manhattan.

Bitcoin has been frequently used in the criminal world lately. Several big cases were reported in South Africa, where ransom for kidnapping was demanded in BTC. However, several recent studies suggest that criminals still prefer to use cash rather than Bitcoin.

The post Dark Web Drug Dealers Arrested for Laundering $2.3 Mln In BTC appeared first on Ethereum World News.

Posted on

Congress Advances Bill to Study Crypto Use in Drug, Sex Trafficking

Lawmakers in the U.S. House of Representatives have passed a bill that, if signed into law, would approve a study of the use of cryptocurrencies in the sex and drug trades.

As CoinDesk reported earlier this month, the bill instructs the director of the Government Accountability Office (GAO) to research “how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking, and for other purposes,” according to the text of the bill

The House passed the bill unanimously, according to its author, Rep. Juan Vargas. The bill now moves to Congress’ upper chamber, the Senate, though its unclear how the measure will proceed there or if U.S. President Donald Trump will sign the bill.

“This bill is an important first step in helping Congress understand the full extent of how virtual currencies are being used to facilitate drug and sex trafficking and will help us propose effective legislative solutions to fight these crimes. I hope to see the same level of support for this legislation in the Senate,” Vargas said in a statement.

This is not the first time the House of Representatives has passed a bill targets sex trafficking, as CoinDesk previously reported. Lawmakers recently passed a bill – FOSTA-SESTA – in February to ban ads for sex workers from online forums, in a move that may have implications for workers who use cryptocurrency.

Washington DC Capitol dome image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.