‘Dark Net’ Site Was Major Source of Fentanyl and Heroin,
Linked to Overdose Deaths, and Used By Hundreds of Thousands of People to Buy
and Sell Illegal Goods and Services Anonymously over the Internet
The Justice Department today announced the seizure of the
largest criminal marketplace on the Internet, AlphaBay, which operated for over
two years on the dark web and was used to sell deadly illegal drugs, stolen and
fraudulent identification documents and access devices, counterfeit goods,
malware and other computer hacking tools, firearms, and toxic chemicals
throughout the world. The international
operation to seize AlphaBay’s infrastructure was led by the United States and
involved cooperation and efforts by law enforcement authorities in Thailand,
the Netherlands, Lithuania, Canada, the United Kingdom, and France, as well as
the European law enforcement agency Europol.
On July 5, Alexandre Cazes aka Alpha02 and Admin, 25, a
Canadian citizen residing in Thailand, was arrested by Thai authorities on
behalf of the United States for his role as the creator and administrator of
AlphaBay. On July 12, Cazes apparently
took his own life while in custody in Thailand.
Cazes was charged in an indictment (1:17-CR-00144-LJO), filed in the
Eastern District of California on June 1, with one count of conspiracy to
engage in racketeering, one count of conspiracy to distribute narcotics, six
counts of distribution of narcotics, one count of conspiracy to commit identity
theft, four counts of unlawful transfer of false identification documents, one
count of conspiracy to commit access device fraud, one count of trafficking in
device making equipment, and one count of money laundering conspiracy. Law enforcement authorities in the United
States worked with numerous foreign partners to freeze and preserve millions of
dollars’ worth of cryptocurrencies that were the subject of forfeiture counts
in the indictment, and that represent the proceeds of the AlphaBay organization’s
illegal activities.
On July 19, the U.S. Attorney’s Office for the Eastern
District of California filed a civil forfeiture complaint against Alexandre
Cazes and his wife's assets located throughout the world, including in
Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda. Cazes and his wife
amassed numerous high value assets, including luxury vehicles, residences and a
hotel in Thailand. Cazes also possessed millions of dollars in cryptocurrency,
which has been seized by the FBI and the Drug Enforcement Administration (DEA).
According to publicly available information on AlphaBay
prior to its takedown, one AlphaBay staff member claimed that it serviced over
200,000 users and 40,000 vendors. Around
the time of takedown, there were over 250,000 listings for illegal drugs and
toxic chemicals on AlphaBay, and over 100,000 listings for stolen and
fraudulent identification documents and access devices, counterfeit goods,
malware and other computer hacking tools, firearms and fraudulent services.
Comparatively, the Silk Road dark web marketplace, which was seized by law
enforcement in November 2013, had reportedly approximately 14,000 listings for
illicit goods and services at the time of seizure and was the largest dark web
marketplace at the time.
“This is likely one of the most important criminal
investigations of the year – taking down the largest dark net marketplace in
history,” said Attorney General Jeff Sessions. “Make no mistake, the forces of
law and justice face a new challenge from the criminals and transnational
criminal organizations who think they can commit their crimes with impunity
using the dark net. The dark net is not
a place to hide. The Department will continue to find, arrest, prosecute, convict,
and incarcerate criminals, drug traffickers and their enablers wherever they
are. We will use every tool we have to stop criminals from exploiting
vulnerable people and sending so many Americans to an early grave. I believe
that because of this operation, the American people are safer – safer from the
threat of identity fraud and malware, and safer from deadly drugs.”
“Transnational organized crime poses a serious threat to our
national and economic security,” said Acting Director Andrew McCabe of the FBI.
“Whether they operate in broad daylight or on the dark net, we will never stop
working to find and stop these criminal syndicates. We want to thank our international partners
and those at the Department of Justice, the DEA and the IRS-CI for their hard
work in demonstrating what we can do when we stand together.”
“The so-called anonymity of the dark web is illusory,” said
Acting Administrator Chuck Rosenberg of the DEA. “We will find and prosecute
drug traffickers who set up shop there, and this case is a great example of our
commitment to doing exactly that. More to come.”
“AlphaBay was the world’s largest underground marketplace of
the dark net, providing an avenue for criminals to conduct business anonymously
and without repercussions,” said Chief Don Fort of IRS-CI. “Working with our law
enforcement partners – both domestically and abroad – IRS-CI used its unique
financial and cyber expertise to help shine a bright light on the accounts and
customers of this shadowy black marketplace, and we intend to continue pursuing
these kinds of criminals no matter where they hide.”
“This ranks as one of the most successful coordinated
takedowns against cybercrime in recent years,” said Executive Director Rob
Wainwright of Europol. “Concerted action by law enforcement authorities in the
United States and Europe, with the support of Europol, has delivered a massive
blow to the underground criminal economy and sends a clear message that the
dark web is not a safe area for criminals. I pay tribute to the excellent work
of the United States and European authorities for the imaginative and
resourceful way they combined their efforts in this case.”
AlphaBay operated as a hidden service on the “Tor” network,
and utilized cryptocurrencies including Bitcoin, Monero and Ethereum in order
to hide the locations of its underlying servers and the identities of its
administrators, moderators, and users. Based on law enforcement’s investigation
of AlphaBay, authorities believe the site was also used to launder hundreds of
millions of dollars deriving from illegal transactions on the website.
An investigation conducted by FBI Atlanta and the U.S.
Attorney’s Office in the Northern District of Georgia identified an AlphaBay
staffer living in the United States. That investigation is ongoing.
The investigation into AlphaBay revealed that numerous
vendors sold fentanyl and heroin, and there have been multiple overdose deaths
across the country attributed to purchases on the site.
According to a complaint affidavit filed in the District of
South Carolina against Theodore Vitality Khleborod and Ana Milena Barrero, an
investigation into an overdose death on February 16, in Portland, Oregon,
involving U-47700, a synthetic opioid, revealed that the drugs were purchased
on AlphaBay from Khelborod and Barrero. According to another complaint
affidavit filed in the Middle District of Florida against Jeremy Achey, an
investigation into a fentanyl overdose death in Orange County, Florida, on
February 27, revealed that the lethal substance was purchased on AlphaBay from
Achey.
Charges contained in an indictment and/or complaint are
merely allegations, and the defendant is presumed innocent unless and until
proven guilty beyond a reasonable doubt in a court of law.
This operation to seize the AlphaBay site coincides with
efforts by Dutch law enforcement to investigate and take down the Hansa Market,
another prominent dark web market. Like AlphaBay, Hansa Market was used to
facilitate the sale of illegal drugs, toxic chemicals, malware, counterfeit
identification documents, and illegal services. The administrators of Hansa
Market, along with its thousands of vendors and users, also attempted to mask
their identities to avoid prosecution through the use of Tor and digital
currency. Further information on the operation against the Hansa Market can be
obtained from Dutch authorities.
The operation to seize AlphaBay’s servers was announced by
Attorney General Jeff Sessions; Deputy Attorney General Rod Rosenstein; Acting
Assistant Attorney General Kenneth A. Blanco of the Justice Department’s
Criminal Division; U.S. Attorney Phillip A. Talbert for the Eastern District of
California; Acting Director Andrew G. McCabe of the FBI, Acting Administrator
Chuck Rosenberg of the DEA and Europol Executive Director Robert Mark
Wainwright.
The case is being investigated by the FBI including FBI
Sacramento Field Office and DEA, with substantial assistance from the IRS-CI.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations
also assisted in the investigation. The case against Cazes was prosecuted by
Assistant U.S. Attorneys Paul A. Hemesath and Grant B. Rabenn of the U.S.
Attorney’s Office for the Eastern District of California, and Trial Attorneys
Louisa K. Marion and C. Alden Pelker of the Criminal Division’s Computer Crime
and Intellectual Property Section. Substantial assistance was provided by the
Department of Justice’s Office of International Affairs and Special Operations
Division. Additionally, the following
foreign law enforcement agencies provided substantial assistance in the
operation to seize AlphaBay’s infrastructure: Royal Thai Police, Dutch National
Police, Lithuanian Criminal Police Bureau (LCPB), Royal Canadian Mounted
Police, United Kingdom’s National Crime Agency, Europol, and French National
Police.
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