News and commentary on organized crime, street crime, white collar crime, cyber crime, sex crime, crime fiction, crime prevention, espionage and terrorism.
Friday, May 3, 2019
DEA: Global Investigation Of Dark Web Drug Network Leads To Arrest Of 3 German Nationals
The DEA released the below information: WASHINGTON – After a
two-year investigation into one of the world’s largest dark web
marketplaces, the DEA and other law enforcement partners today announced
the arrests of three German nationals who operated the site, which sold
illegal drugs and other goods to over a million customers. The three
defendants were arrested in the United States and Germany on April 23rd
and 24th and now face charges in both countries for their roles as
administrators of the Wall Street Marketplace (WSM). (German charges: https://www.europol.europa.eu/newsroom/news/double-blow-to-dark-web-marketplaces)
A fourth defendant
linked to WSM was charged yesterday in a criminal complaint filed in U.S.
District Court in Sacramento, California. Marcos Paulo De
Oliveira-Annibale, 29, of Sao Paulo, Brazil, also faces federal drug
distribution and money laundering charges for allegedly acting as a
moderator who, among other things, mediated disputes between vendors and
their customers. Annibale, who used the online monikers “MED3LIN,”
also acted as a public relations representative for WSM by, among others
things, promoting WSM on websites such as Reddit, according to the complaint.
The case naming Annibale was unsealed today when Brazilian authorities
executed a search warrant at his residence.
“The dark web
marketplace, Wall Street Market, was one of the largest operating hosts
for vendors peddling illegal wares,” said DEA San Francisco Special Agent
in-Charge Chris Nielsen. “Law enforcement is always adapting to
changes in technology and this case sends a clear message to those
breaking the law and attempting to hide behind the illusion of anonymity
– we will identify and find you. The success of this case is due to
the excellent cooperation between law enforcement agencies from around
the globe who delivered another blow to criminal networks operating in
the underground cyberspace.”
Operations Division coordinated this investigation and enforcement
operation, which also included the FBI, IRS Criminal Investigations, HSI,
and the U.S. Postal Inspection Service. Global partners include German
Federal Criminal Police (the Bundeskriminalamt), the German Public
Prosecutor’s Office in Frankfurt, the Dutch National Police (Politie),
the Netherlands National Prosecutor’s Office, Federal Police of Brazil
(Policia Federal), Europol and Eurojust. Significant assistance was
provided by the Criminal Division’s Office of International Affairs and
Organized Crime and Drug Enforcement Task Force Program.
A criminal complaint
filed Wednesday in U.S. District Court in Los Angeles alleges that the
three defendants, who currently are in custody in Germany, were the
administrators of WSM, a sophisticated online marketplace available in
six languages that allowed approximately 5,400 vendors to sell illegal
goods to about 1.15 million customers around the world. Like other
dark web marketplaces previously shut down by authorities – Silk Road and AlphaBay, for example – WSM functioned
like a conventional e-commerce website, but it was a hidden service
located beyond the reach of traditional internet browsers on the Tor
network, a service designed to conceal user identities.
For nearly three years,
WSM allegedly was operated on the dark web by the three defendants.
An “exit scam” was allegedly conducted last month when the WSM
administrators took all of the virtual currency held in marketplace
escrow and user accounts – believed by investigators to be approximately
$11 million – and then diverted the money to their own accounts.
Exit scams are common among large darknet marketplaces, which typically
hold money in escrow while a vendor delivers illicit goods.
“Just as international
law-enforcement partners began dismantling Wall Street Market and taking
action against its members, as alleged in the complaint, the site’s
administrators decided to steal their customers’ money via an exit scam,”
said Assistant Attorney General Brian Benczkowski. “This operation
sends a crystal-clear message: dark markets offer no safe haven.
The arrest and prosecution of the criminals who allegedly ran this
darknet marketplace is a great example of our partnership with law
enforcement authorities in Europe, with the support of Europol, and
demonstrates what we can do when we stand together.”
many countries overcame the national, legal and diplomatic challenges to
hold accountable sophisticated actors who operated one of the largest
known encrypted marketplaces in the shadowy environment of the Darknet,”
said Assistant Director Paul Delacourt of the FBI’s Los Angeles Field
Office. “This case is an example of successful global collaboration
among law enforcement entities who share the many challenges of
prosecuting transnational criminal activity conducted by individuals who
operate anonymously across borders.”
The affidavit in
support of the criminal complaint filed in Los Angeles outlines how the
defendants operated a sophisticated online marketplace that offered
encrypted communications between buyers and sellers, as well as an online
forum to discuss vendors and the quality of their wares. The
affidavit also describes an international investigation that was able to
identify the three administrators of WSM, show how they previously
operated another German-based darknet marketplace that shut down in 2016,
and link them to computer servers in Germany and the Netherlands that
were used to operate WSM and process virtual currency transactions.
The three defendants
allegedly created WSM, maintained the website, and operated the
marketplace to ensure that buyers could access vendor pages and that
financial transactions were properly processed. The investigation
outlined in the complaint affidavit linked the three defendants to WSM in
a number of ways, including their access to the WSM computer
infrastructure. One defendant, for example, used virtual private
networks to access WSM computers, but when a VPN connection would fail,
his IP was revealed and authorities were able to identify his specific
The three defendants
charged in the Central District of California were arrested in Germany
after the WSM administrators conducted an exit scam in the wake of WSM
recently becoming regarded as the world’s pre-eminent dark web
marketplace and gaining a significant influx of new vendors and users,
according to the affidavit. On April 16, vendors realized they
could not collect the virtual funds that had been placed in escrow by
their customers, which prompted German authorities to execute a series of
arrest and search warrants.
The complaint affidavit
identifies several cases that have been filed in the United States
against WSM vendors. One darknet vendor who advertised on WSM
is currently serving a 12-year federal prison sentence after being
convicted in the Western District of Wisconsin for distributing a
fentanyl analogue resulting in the overdose death of a Florida resident
who ordered a nasal spray laced with the powerful opioid from the vendor.
Two of the “top
vendors” on WSM – identified by the online monikers Platinum45 and
Ladyskywalker – were based in the Los Angeles area and were major drug
distributors. One vendor, “Ladyskywalker,” operated on several
darknet marketplaces, where the individual advertised and sold opioids
such as fentanyl, oxycodone and hydrocodone.
The second top vendor –
who used the moniker “Platinum45” and operated on at least two darknet
marketplaces, including WSM – advertised and sold drugs such as
methamphetamine, Adderall and oxycodone to customers in the United States
and around the world, including in Germany and Australia.
“Platinum45” also manufactured Adderall tablets and advertised the sale
of up to 1 kilogram quantities of methamphetamine on WSM.
Paul Davis is a writer who covers crime. He has written extensively about organized crime, street crime, sex crime, cyber crime, drug crime, white collar crime, crime fiction, crime prevention, espionage and terrorism. His 'On Crime' column appears weekly in the Washington Times. He is also a regular contributor to Counterterrorism magazine. His work has also appeared in the Philadelphia Inquirer, Philadelphia Daily News and other newspapers, magazines and online publications. As a writer, he has attended police academy training, gone out on patrol with police officers, accompanied detectives as they worked cases, accompanied narcotics officers on drug raids, observed criminal court proceedings and visited jails and prisons. He has covered street riots, mob wars and murder investigations. Paul Davis' online "Crime Beat" column offers his Q&As with cops, crooks, crime writers and others. Paul Davis has been a student of crime since he was a 12-year-old aspiring writer growing up in South Philadelphia. He enlisted in the U.S. Navy when he was 17 in 1970 and served on the aircraft carrier USS Kitty Hawk during the Vietnam War. He also served two years on the Navy harbor tugboat USS Saugus at the U.S. nuclear submarine base at Holy Loch, Scotland. Following his Navy service, he performed security work as a Defense Department civilian and he later became a full-time writer. Paul Davis' On Crime and Crime Beat columns, crime fiction and magazine and newspaper pieces can be read on this website. His full bio can be read by clicking on the above photo.