Two men were indicted by a federal grand jury on the charges of illegally manufacturing and distributing alprazolam tablets, which are commonly known as Xanax, in exchange for payment through bitcoin. The duo, Ryan Farace, age 34, of Reisterstown, Maryland, and Robert Swain, age 34, of Freeland, Maryland were also accused of laundering the drug proceeds through cryptocurrency, as it would help conceal their ownership of Ill-gotten gains.
Bitcoin Still Widely Used on the Darknet
The case was a part of a one-year covert mission called Operation Dark Gold. The sting operation included some of the most important security agencies in the United States.
These included high-ranking government agencies including the Money Laundering and Asset Recovery Section of the Department of Justice’s Criminal Division, the United States Postal Inspection Service, Department of Homeland Security, the Drug Enforcement Administration, 51 United States Attorney’s Offices and the United States Secret Service.
The indictment was pronounced by a jury which comprised sheriffs, representatives from Homeland Security Investigations, Immigration, and Customs Enforcement, among others, and was heard by the United States Attorney for the District of Maryland Robert K. Hur.
According to the testimony, between November 2013 and June 2017, accused wrongdoer Farace had purchased equipment meant for manufacturing narcotics, including spurious ‘Xanax’ pill molds and pill presses. He also pressed available raw material or the powder into tablet mold, which would then resemble legitimate Xanax pills. Farace then allegedly sold these ‘pills’ on the darknet in exchange for bitcoin. To maintain secrecy, all communication with probable buyers was done through encrypted messages and shipped the orders through the US Postal Service.
Cryptocurrency Worth $17 Million Seized
The testimony also revealed that packages were paid using prepaid debit cards duplicated using other people’s identities. Farace possessed nearly enough raw materials to distribute 6,900 alprazolam pills and distributed the same during the time period May 10, 2016, and January 31, 2017.
To cover up their tracks, the duo laundered the proceeds from the illicit drug sale by creating financial transactions that hid the nature, ownership, and control of the proceeds. So far, the law enforcement agencies have seized assets, from the indicted duo and others who helped them. The confiscated assets are valued at over $22 million, of which bitcoin and cryptocurrencies account for $17 million.
However, if the duo is prosecuted before a court, if found guilty the government may see it fit to forfeit $5,665,000, as well as 4,000 Bitcoin. The amount is believed to be the profits made from the illegal drug sales, residences, and vehicles used to facilitate the drug distribution. Basically, the state may confiscate everything that the duo owned to carry out this grand-scale larceny.
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Original Post: Duo Indicted for Selling Spurious “Xanax” on Dark Web in Exchange for Bitcoin