First Conviction for Money Laundering Involving Cryptocurrency by New York State

Two men (35-year-olds Mark Sanchez and Callaway Crain) have both pleaded guilty to the crimes of which they are accused in court, and they are now due to be sentenced by New York County’s District Attorney on 12th July 2019.

The duo is alleged to have run a controlled substance and steroid business via both the dark web and an online website called NextDayGear, where they sold drugs such as Viagra, Valium, and Xanax which are commonly used to counter the effects of oral and injectable steroids including stanozolol, nandrolone, and testosterone, which were also available to purchase.

Sanchez and Crain mixed, pressed, and packaged their products from chemicals, controlled substances, and steroid that were sourced from China, before advertising and selling them online and despatching orders to customers across all fifty states of the U.S. as well as sixteen other countries.

Those who made purchases from the pair are said to include lawyers, doctors, drug dealers, bodybuilders, members of the armed forces, police officers, fitness trainers, NFL football and professional volleyball players, and a high school athletics coach.

Over a five-year period (N.B., 2013 to 2018), Sanchez and Crain are said to have generated over $2.8m via Western Union and cryptocurrency payments in return for sending over ten thousand packages of illegal goods to customers across the U.S. The pair then laundered the $2.8m revenue by converting the Bitcoin into cash via a cryptocurrency exchange service.

The men accused plead guilty to the dual charges of Criminal Sale of a Controlled Substance in the 5th Degree and Money Laundering in the 2nd Degree that were brought against them by the Manhattan District Attorney on Wednesday, 24th April 2019. The charges carry expected sentences of seven-and-a-half years and two-and-a-half years respectively.

Just last week, an undercover investigation team at the Manhattan District Attorney’s office took down several major dark web drug-selling store that were being operated by three men (Ronald MacCarty, Jarrette Codd, and Chester Anderson). It is calculated that over $2.3m of cryptocurrency was laundered through the operations through ATM cash withdrawals in New Jersey and Manhattan and preloaded debit cards.

The investigators managed to seize the biggest haul of drugs in the history of New Jersey state after carrying out a series of raids on the defendants’ vehicles and homes. Alongside large quantities of GHB, ketamine, methamphetamine, heroin, and alprazolam tablets, the searches also lead to the seizure of two industrial mixers, four pill presses, various drug-manufacturing equipment, and thousands of dollars’ worth of cryptocurrency.

The prosecutions were brought about thanks to the D.A.’s state-of-the-art Cyber Lab, which successfully identified the dark web counterfeit drugs seller following reports of suspicious activity at ATMs in New Jersey and New York.

As a result of the operation, the Manhattan District Attorney’s investigators were able to intercept many of the most-recently posted packages, which contained approximately eight thousand illegal tablets.

By Laura Kilby

Sources:

https://www.manhattanda.org/da-vance-announces-guilty-pleas-in-2-8-million-internet-drug-ring/

https://www.coindesk.com/new-york-state-sees-first-conviction-for-crypto-money-laundering