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December 11, 2019
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Blockchain

Dark Web Drug Dealer Pleads Guilty To Using Cryptocurrency to Launder More Than $19 Million

Hugh Brian Haney pled responsible in Manhattan federal courtroom final week to cash laundering expenses, based mostly on the proceeds of a narcotics trafficking operation that he ran on the Dark Web website referred to as “Silk Road.”  

In a press launch U.S. Attorney Geoffrey S. Berman stated: 

“Hugh Haney used Silk Road as a means to sell drugs to people all over the world.  Then he laundered more than $19 million in profits through cryptocurrency.  Peddling drugs on the Dark Web does not provide anonymity forever, as Hugh Haney can attest.”

As alleged within the underlying Complaint, Indictment and statements made in open courtroom:

“Silk Road was an online criminal marketplace designed to be outside the reach of law enforcement or governmental regulation.  All transactions on Silk Road could be completed only through the use of the cryptocurrency Bitcoin.  During its two-and-a-half years in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over 100,000 buyers and to launder hundreds of millions of dollars deriving from these unlawful transactions.  Law enforcement shut down Silk Road in or about October 2013.”

One outstanding narcotics vendor on Silk Road was referred to as “Pharmville.”  The operators of Pharmville equipped a devoted neighborhood of people who typically traded illicit narcotics. Pursuant to a judicially approved warrant of Haney’s home in Ohio in 2018, legislation enforcement brokers discovered proof that Haney was a high-ranking member of Pharmville, concerned in large-scale narcotics trafficking on Silk Road.  Among the paperwork discovered on a pc in Haney’s home was a doc entitled “HBH DAILY TO DO LIST,” which, amongst different issues, referred to Silk Road, Pharmville, and large-scale narcotics trafficking, together with of the lethal opioid fentanyl.

In 2017 and 2018, HANEY transferred Bitcoins representing narcotics proceeds that he had earned by means of his management of Pharmville from Bitcoin addresses linked to Silk Road to an account he managed at an organization concerned within the change of Bitcoins and different digital forex.  Haney falsely claimed that he had legitimately earned these Bitcoins by means of cryptographically creating them and from honest transfers with others, whereas in actuality the Bitcoins have been derived from transfers from Silk Road.  

After Haney transferred the Bitcoins to money price greater than $19 million, legislation enforcement seized the cash pursuant to a judicially approved seizure warrant from a custodial account at his financial institution.

Haney, 61, of Ohio, was arrested July 18, 2019, and has been in federal custody since. he pled responsible to one depend of concealment cash laundering, which carries a most sentence of 20 years in jail, and one depend of partaking in a monetary transaction in criminally derived property, which carries a most sentence of 10 years in jail.  

Haney is scheduled to be sentenced by Judge Rakoff on is February 12, 2020.

Mr. Berman praised the excellent investigative work of the Department of Homeland Security, Homeland Security Investigations. 

These circumstances are being dealt with by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant United States Attorneys Tara M. La Morte and Samuel L. Raymond are in control of the prosecutions. U.S. District Judge Jed S. Rakoff presided over the defendant’s responsible plea. Geoffrey S. Berman, the United States Attorney for the Southern District of New York, made the announcement. 

About Richard Kastelein

Founder and writer of business publication Blockchain News (EST 2015), a companion at ICO companies collective Token.Agency ($750m+ and 90+ ICOs and STOs), director of schooling firm Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning writer, innovation government and entrepreneur. He sits on the advisory boards of some two dozen Blockchain startups and has written over 1500 articles on Blockchain expertise and startups at Blockchain News and has additionally printed pioneering articles on ICOs in Harvard Business Review and Venturebeat. Irish Tech News put him within the high 10 Token Architects in Europe.

Kastelein has an Ad Honorem – Honorary Ph.D. and is Chair Professor of Blockchain at China’s first Blockchain University in Nanchang on the Jiangxi Ahead Institute of Software and Technology. In 2018 he was invited to and attended University of Oxford’s Saïd Business School for Business Automation four.zero programme.  Over a half a decade expertise judging and rewarding some 1000+ innovation initiatives as an EU knowledgeable for the European Commission’s SME Instrument programme as a startup assessor and as a startup choose for the UK authorities’s Innovate UK division.

Kastelein has spoken (keynotes & panels) on Blockchain expertise in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London (5x), Manchester, Minsk, Nairobi, Nanchang, Prague, San Mateo, San Francisco, Santa Clara (2x), Shanghai, Singapore (3x), Tel Aviv, Utrecht, Venice, Visakhapatnam, Zwolle and Zurich.

He is a Canadian (Dutch/Irish/English/Métis) whose writing profession has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe. He’s written sometimes for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com, and his work and concepts have been translated into Dutch, Greek, Polish, German and French. A journalist by commerce, an entrepreneur and adventurer at coronary heart, Kastelein’s skilled profession has ranged from political publishing to TV expertise, boatbuilding to judging startups, skippering yachts to advertising and marketing and extra as he is travelled for almost 30 years as a Canadian expatriate dwelling world wide. In his 20s, he sailed world wide on small yachts and wrote a sequence of journey articles referred to as, ‘The Hitchhiker’s Guide to the Seas’ travelling by hitching rides on yachts (1989) in main journey and yachting publications. He at present lives in Groningen, Netherlands the place he is elevating three teenage daughters together with his spouse and crusing companion, Wieke Beenen.

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