A dark-net vendor and his drug supplier appeared in US court this week. The duo faced formal charges after prosecutors found out the pair used the dark-net to distribute drugs. They are both facing charges for drug-trafficking and money-laundering.
About the arrests
A press release issued by the the U.S. State Department of Justice stated more details on the case. The 44 year old suspect named "David Brian Pate" holds a dual citizenship for the US and Costa Rica. He along with the 38 year old Costa Rican national "Jose Luis Fung Hou" are being prosecuted by a federal grand jury in the District of Columbia.
The pair happened to be residing in Costa Rica while distributing drugs. The duo used dark-net platforms to sell opioids. Their operation came to an end after police caught up with their activities after a series of investigations.
The two defendants have been subjected to a seven-count indictments. The charges range from conspiracy to distribute controlled drugs to conspiracy to import controlled drugs through affiliates and money laundering conspiracy.
Distribution on the Dark-Net and Money Laundering
According to court records pate ran most of the dark-net operations himself. His operation involved the purchase of illicit drugs like Oxycontin and morphine from his pharmacist. Pharmacist Fung is his co-accused supplier based in Costa Rica.
Pate used a money laundering approach to submit payments to Fung in exchange for the drugs. Those drugs would then be sold across numerous dark-net markets. The suspect’s dark-net customers, who allegedly used Silk Road and AlphaBay, would buy the drugs using Bitcoin.
Investigations discovered that the dark-net vendor used monikers such as "buyersclub" to operate. That moniker was used all across dark-net marketplaces, online forums and even exchanges. Ads posted by Pate indicated he was selling the 'old formula' of Oxycontin that lacked tamper-resistant elements.
The indictment pointed out further details on the defendant's dark-net operations. The operation involved shipment of bulk confinements of drugs in pill form provided by Fung. The pills would then be concealed inside souvenirs like maracas and sent to the us for re-distribution.
The suspect would then issue the re-distributors in the US a list of customer orders. The list included the names, addresses and the quantities of drugs wanted by interested buyers. Reportedly the re-distributors task was to repackage the items before sending them out to customers.
In the end the customers just have to confirm the arrival of the order. Once the order is confirmed by the customer the money would then be released from the markets. All the payments where done in cryptocurrency in order to hide the commercial trail.
The funds were held in 'Escrow' before any transaction was complete. The release of funds into Pate's account would signal a successful transaction.
The court indictment estimated that the total amount of funds received by the defendant in Bitcoin stood at 23,903 coins.
Commitment to fight the Dark-Net
Acting U.S attorney Michael Sherwin commented on the case. He intimated the importance of this case in deterring criminals from getting into illicit drug trades. He also stated that the charges serves as a warning to globally-placed drug traffickers. He claims that this is also a warning to people that have stayed clear of the U.S. law enforcement radar by using the dark-net.
Attorney Sherwin went on to voice the government's commitment in the fight against opioids. The opioid crisis is raging and has been fueled by organized criminal networks. The U.S. Government is hoping to dismantle the currently-existing cyber-enabled frameworks.
Jesse Fond, the Special Agent in charge of the U.S Drug Enforcement Administration's also made a few statements. The agent cited the great demonstration provided by this case. This case provided the DEA an anti-dark-net success story and the motivation to take down more and larger distributors.