The first-of-its-kind nationwide undercover investigation targeting Darknet traders resulted in the apprehension of a previous Parma resident as well as a man who presently resides there. Over 35 people were arrested as part of a national exercise in the distribution of illicit drugs, firearms and other products on the Darknet marketplaces.
But two of those arrested were locals in a small community, sending shockwaves to the greater Ohio area. The Ohio residents indicted in the case included 32-year-old Nicholas Powell, who now resides in Spring Hill, Florida, and 27-year-old Michael Gonzalez of Parma. Both are being charged by the United States Attorney’s Office for the Northern District of Ohio with conspiracy to peddle illegal substances and laundering money using the Darknet marketplaces.
— NDOHnews (@NDOHnews) June 26, 2018
According to the Justice Department report, the confiscations as well as apprehensions, are part of a year-long procedure to take down more than 65 Darknet marketplace vendors. Agents from Homeland Security in New York City impersonated themselves as money launderers, specifically as con artists that offer bitcoin mixer and bitcoin tumbler services. They offered to trade bitcoin and other various digital currencies and altcoins.
This nationwide investigation was an immediate reaction to the raging opioid crisis in Ohio and the rest of the United States. Darknet vendors play a huge role in the national narcotic addiction epidemic.
The federal agent apprehended both men last week. Michael Gonzalez was later released on bail, while Nicholas Powell appeared before the federal court in Tampa and will be steered to Cleveland by the United States Marshals Service. Both will likely have difficulty escaping conviction considering the magnitude of this federal investigation and the number of arrests made in the last week.
Investigators asserted that Powell made the use of many pseudonyms on various Darknet marketplaces like AlphaBay and Hansa. His names include TheSource, BonnienClyde, BnC, BCPHARMA as well as Money TS.
Powell confessed eventually to the investigators; he admitted to trading steroids as well as cannabis, based on a malefactor complaint. He then delivered his bitcoin to be exchanged into United States currency. In accordance to the charge, Powell and Gonzalez collaborated to trade Xanax.
Gonzalez stated he supervised the weighing as well as the delivery of Xanax powder and also alleged that his business partnership with Powell finished early on. He made tens of thousands of dollars between December 2016 and March 2017. Most of these trades took place on messenger applications with encrypted texting. This is a new level of anonymity that darknet vendors are using to hide from the authorities.
Gonzalez stated he scheduled items to be sent out straight from China to his customers. Despite denials by the Chinese government, China remains at the epicenter of all synthetic opioid distribution including fentanyl and carfentanil. Gonzalez additionally asserted that he delivered between $10,000 and $40,000 in cryptocurrency each time to a money launderer for these purchases.
In one of the largest darknet takedowns in America, thousands of pills were confiscated and weapons, including 100 guns of various makes, and even five cars. Over $3 million in gold bars was seized and more than $20 million in digital currency assets.
Special agents have utilized to bust darknet marketplaces includes, undercover penetration, malware, IP mining, tracking bitcoin transactions, as well as intercepting deliveries. During the shutdown of Hansa, federal agents privately took control of the activity on the site itself, rewriting code, harvesting encrypted user data, and building lists of anyone who even visited the site.
The BBC once reported in 2017 that unlawful activities on the darknet tend to extend to other sites after the shutdown of prominent darknet marketplaces. While Europol consultant Alan Woodward told the news network “vendors think they are relatively immune,” he included it is possible that duplicated arrests have freaked out customers that need to give “shipment addresses and so forth…some vendors that have developed excellent reputations online as well as customer bases have started transferring to presumably more secure dark websites.”