Apr 24, 2019 16:43 UTC
May 2, 2019 at 21:31 UTC
New York Gets Its First Crypto Money Laundering Case
On 24th April, the Manhattan District Attorney’s office led by Cyrus Vance Jr. announced that two defendents have pleaded guilty to running a drug trafficking business that laundered millions of dollars in Western Union and crypto payments.
It is being considered as the first crypto money laundering conviction in New York.
Callaway Crain, 35, and Mark Sanchez, also 35, were allegedly behind the darknet website “NextDayGear,” and also manufactured some of the substances they sold. Among their products were reportedly injectable and oral steroids, as well as medication to counteract the adverse effects of their use, including Xanax, Valium and Viagra.
“These defendants raked in crypto and cash worth millions on their full-service website that sold prescription-free counterfeit steroids and other controlled substances to customers in all 50 states,” said the DA, in his statement.
Callaway and Crain reportedly shipped 10,000 packages of illegal drugs across the United States between 2013 and 2018, generating millions in income using Western Union and Bitcoin as their preferred payment platforms.
They laundered crypto payments through intermediary crypto wallets to hide the actual source of funds before converting them to cash. Western Union payments, on the other hand, were laundered using “false identities, or through international wire transfers from foreign based receivers.”
The two men reportedly purchased steroids, precursor chemicals and other products from China and other countries, which they then marketed and sold, often under brand names they created. Among their customers were reportedly an NFL football player, a college football player, a professional volleyball player, fitness trainers, police officers and members of the armed services deployed overseas.
Sanchez and Crain pleaded guilty to second-degree money laundering charges, as well as the criminal sale of illegal substances in the fifth degree. The defendants face a minimum jail term of two and a half years; the sentencing is expected to take place on July 12, 2019.
The case marks a new first among several recent crypto-related enforcements, as cryptocurrency-based crimes continue to receive formal definitions within America’s legal framework.
Attorney Vance issued a clear warning against all crypto launderers saying,
“Online drug sellers who do business in New York should take note: whether you’re operating in plain sight or in hidden corners of the dark web, my Office has the skills and resources to follow the money, shut down your business, and hold you accountable.”
According to reports, the value of bitcoin (BTC) sent to darknet markets increased by 70 percent during only the last year.