In Baltimore County, Maryland, two men have pleaded guilty to distribution of drugs via the dark web and the conspiracy to launder money.
One of the conspirators, Ryan Farace, of Reisterstown, pleaded guilty in a federal court to charges of manufacturing and distributing alprazolam (Xanax) tablets on the dark web, and money laundering.
The 34-year-old man admitted that he shipped orders through the U.S. Postal Service and was able to communicate with his clients via encrypted electronic messages.
He further admitted that the postal charges were paid for by pre-paid debit cards with names and information of other people.
The other co-conspirator, Robert Swain of Freeland, was seen by media staff leaving a federal court after pleading guilty to charges of money laundering.
Swain, 34, was convicted of laundering the illegal funds through financial transactions in a bid to conceal the ownership and source.
High-Profit Darknet Drug Operation
Between November 2013 and June 2017, Farace had acquired equipment for manufacturing drugs which included Xanax pill molds and pill presses, as well as alprazolam powder.
He later sold alprazolam on dark web marketplaces as “legitimate” Xanax pills in tablet or pill form in exchange for Bitcoin.
The authorities said that after soliciting orders for close to five years, Farace had distributed more than 6,900 alprazolam pills, acquiring assets valued at over $22 million.
The assets included more than $5 million in cash, which Farace received through post office boxes and private rental mailboxes opened using pseudonyms.
Both Men Take Plea Deals
Earlier this month, U.S. District Attorney of Maryland Robert K. Hur announced the guilty pleas in conjunction with agents from the Drug Enforcement Administration (DEA), the U.S. Postal Inspection Service – Washington Division, the Internal Revenue Service (IRS), U.S. Immigration and Customs Enforcement (ICE) as well as Homeland Security Investigations (HSI).
Hur further stated that according to plea agreements by the two men, Swain is expected to forfeit cash and digital currency held in his name, as well as $30,000.
Farace, on the other hand, agreed to forfeit approximately $5.6 million, plus 4,000 Bitcoin.
At the same, he is also expected to forfeit $2.5 million worth of computer equipment, bank accounts, his residence, jewellery, vehicles and anything else seized by the authorities after a search warrant was issued on his premises.
Farace and Swain are expected to be sentenced on November 30 and January 25, 2019 respectively.
If both men are found guilty of the charge of conspiracy to launder money, they face a maximum sentence of 20 years in federal prison.
Furthermore, Farace faces a maximum sentence of five years for each count of the conspiracy to manufacture, distribute and possess alprazolam.
He also faces another 20 years in prison for running and maintaining his suburban premises to engage in illicit drug activities.
In the end, the case represents another win for U.S. authorities under their nationwide drug operation targeting vendors of illegal goods on the dark web.
The operation since its inception has seen the fall of numerous vendors.
Nonetheless, only time will tell whether the operation was successful in the taming the illicit drug markets and the darknet ecosystem overall.