Digital Currency Fuels Illegal Opiate Trafficking

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As many would guess, digital currency plays a significant role in the black market trafficking of illegal drugs. I quick search of the DOJ website found over 25 indictments in the last 3 months, most of which involved the sale of these substance on the dark web using cryptocurrencies. One must also assume that like an iceberg, those indicted represent only a fraction of what actually exists as in this case from Texas.

As long as the illegal drug trade thrives, law enforcement, state and federal regulators will continue to scrutinize the chronic pain community as potential participants in such activities, the common theme being, the consumption of opiates for medical purposes.

Conventional thinking used to be that if you’re not guilty of doing anything wrong, you’ve got nothing to worry about, with the idea being government and law enforcement are only interested in the bad guys.

But with the bad guys disguising themselves to look like you and me, I not as at ease as I might have been twenty years ago.

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A San Antonio couple that was the most prolific dark net fentanyl vendor in the world at the time of their arrest last year were sentenced to prison. 

Matthew Roberts, 36, was sentenced to 135 months in federal prison. Holly Roberts, 35, was sentenced to 96 months in federal prison.

The Roberts’ operated MH4LIFE and a variety of other dark net marketplace accounts. They previously pleaded guilty to conspiracy to distribute controlled substances, money laundering, identity theft and other crimes.

According to court documents:

The Roberts’ created and operated several dark net marketplace accounts, including MH4LIFE, TRAPPEDINTIME, FASTFORWARD and MRHIGH4LIFE. They operated these accounts on nearly a dozen dark net marketplaces including Dream Market, Silk Road, AlphaBay, Darknet Heroes League, Nucleus and several others.

They used these accounts between 2013 and May 12, 2018 to possess and distribute fentanyl, MethoxyAcetylFentanyl (MAF), other fentanyl analogues, heroin, cocaine, methamphetamine, MDMA, LSD, marijuana, Xanax, Oxycodone and other drugs.

The Roberts’ MH4LIFE vendor account on Dream Market had 2,800 verified transactions with a 4.89/5 rating as of May 2018. Dream listed that MH4LIFE had 500 verified transactions on the Agora marketplace and 719 transactions on the Nucleus marketplace. The only products listed for sale by MH4LIFE were illegal narcotics. The majority of available reviews detailed customers purchasing fentanyl and fentanyl analogues.

MH4LIFE had the highest number of verified transactions worldwide of any fentanyl vendor based upon a review of Dream Market.

The Roberts’ used private messaging, encryption software, Virtual Private Networks and proxies through the TOR network to provide security for the criminal organization. They used decoys, such as glow bracelets and other mundane items, to hide the fact they were mailing narcotics. They also purchased postage from third parties with cryptocurrency in an effort to conceal their activities.

Customers used digital currency to purchase narcotics, which the defendants sent to digital currency exchanges, where the funds were converted into official fiat currency and spent on person goods and services, as well as prepaid Visa and gift cards. The Roberts’ also used advanced identity theft techniques to hide their identity from cryptocurrency and other financial institutions, in order to thwart Know Your Customer protocols.

At the time of arrest, law enforcement found Matthew Roberts in a hotel room surrounded by fentanyl, other narcotics, devices used to access the dark net, cryptocurrency wallets, drug ledgers and cash. Holly Roberts was found in their home, which also contained drug ledgers and narcotics.

“The mechanics of drug dealing has changed, and law enforcement has changed with it,” U.S. Attorney Justin E. Herdman said. “These cases demonstrate that those who think they are hiding behind a cloak of anonymity on the dark net will be uncovered and brought to justice for selling the drugs killing our friends and neighbors.”

“This investigation and today’s sentencing marks a final blow to what we now know was one of the largest fentanyl distributors operating on the dark web,” said Homeland Security Investigations Special Agent in Charge Steve Francis. “As this case makes clear, HSI and our partners are united in our resolve to protect our communities and our country from the scourge of drug trafficking. We stand ready to use every tool and resource at our disposal to attack and dismantle these organizations, regardless of where they operate.”

“The U.S. Postal Inspection Service is fully dedicated to protecting the American public,” said Inspector in Charge Tommy D. Coke.  “One of the ways we fulfill this mission is by working tirelessly with other law enforcement agencies in operations just like this one to keep dangerous drugs out of the communities we serve.”

“The Roberts’ utilized the dark web in an attempt to keep their dangerous drug dealing behavior hidden from law enforcement,” said FBI Special Agent in Charge Eric B. Smith. “This significant sentence should serve as notice to anyone dealing illegal drugs online that law enforcement will join efforts and bring their reign to an end.”

These cases are the result of Operation Darkness Falls, a joint investigation involving Homeland Security Investigations, U.S Postal Inspection Service, the FBI and the Internal Revenue Service – Criminal Investigations. Federal agents around the country, including in the Western District of Texas, Western District of Pennsylvania, Middle District of Florida and elsewhere, have assisted in the ongoing operation.

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