U.S. Attorney and Federal Law Enforcement Partners Announce Formalization of Darknet Marketplace and Digital Currency Crimes Task Force

U.S. Attorney Gary M. Restaino, HSI SAC Scott Brown, IRS-CI SAC Al Childress, DEA SAC Cheri Oz, and United States Postal Inspection Service Acting Inspector in Charge Greg Torbenson last week signed a Memorandum of Understanding (MOU) memorializing a Darknet Marketplace and Digital Currency Crimes Task Force (DNMDCC Task Force).

Since 2017, these federal partners have focused on darknet drug vendors and cryptocurrency-enabled crimes. Ever-evolving technology has allowed drug traffickers and other criminal actors to expand into the digital world and use the darknet to engage in their illegal activity. Criminals have long sought to launder the proceeds of their illegal activity through various means, and technology has facilitated this on a grand scale. As these criminal activities and enterprises have become more sophisticated, law enforcement tools, resources, and intelligence have had to adapt.

Federal partners in Arizona have collectively investigated and prosecuted many of these cases in recent years. Some significant prosecutions include:

United States v. Ruelas et. al., CR17-0317-PHX-JAT: Silvester Ruelas, Kevin Dean McCoy, Amber Nicole Worrell, and Peggy V. Gomez conspired together to traffic heroin, methamphetamine, and cocaine on the darknet. During the investigation, law enforcement officers seized from Ruelas’ residence and subsequently forfeited nine firearms, various bars of silver, gold and platinum, assorted jewelry, three high-end watches, and a Seattle Seahawks Super Bowl ring. The Court sentenced Ruelas to 240 months in prison, McCoy to 180 months in prison, Worrell to 120 months in prison, and Gomez to 60 months in prison. Liliana Sibirian Gomez was also charged with the others, pleaded to possession with intent to distribute, and was sentenced to 24 months in prison. The last defendant in the case was sentenced in 2021. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation.

United States v. McCoy et. al., CR21-0427-PHX-SPL: Charles McCoy, Lauren Rempel, and John Barnhill conspired together to distribute fentanyl through the dark web. Customers paid in cryptocurrency, and McCoy and Rempel laundered the proceeds of the offense through a cryptocurrency exchange. The Court sentenced McCoy to 180 months in prison, Barnhill to 72 months in prison, and Rempel to 87 months in prison. The last defendant in the case was sentenced in 2023. This prosecution is part of an OCDETF investigation.

United States v. Cummings, CR22-0172-PHX-DWL: Michael Brian Cummings sold blue M-30 pills containing fentanyl on the dark web under the vendor name “PillPlugPaul.” He pleaded guilty to possession with the intent to distribute and agreed to forfeit all of the computers and cell phones used in the offense. His sentencing is scheduled for July 31, 2023, in front of United States District Judge Dominic W. Lanza.

“We’ve done great work with our federal partners in the dark web and crypto space,” said United States Attorney Gary Restaino. “This task force will enable us to continue the great collaboration with USPIS, DEA, IRS-CI and HSI, and I look forward to robust interdiction and prosecution efforts to deter digital crimes.”

“HSI and our partners have been working at the forefront of combating criminal activities facilitated through the use of cryptocurrency on dark web marketplaces and other anonymous platforms,” said Scott Brown, special agent in charge for HSI Arizona. “This taskforce will have impactful repercussions on those criminal operators who attempt to grow their businesses and launder the illicit proceeds through advancing technology. HSI looks forward to growing in this investigative space alongside our law enforcement partners.”

“IRS-CI is increasingly dedicating more investigative time and agent expertise to tackle darknet and cryptocurrency crimes,” said Special Agent in Charge Albert Childress of the IRS Phoenix Field Office. “Our agents excel in addressing sophisticated cyber-related schemes and are up to the challenge of locating and apprehending criminals who try to hide in the digital world.”

“DEA is committed to saving lives,” said DEA Special Agent in Charge Cheri Oz. “Drug traffickers who are hiding in the darknet will be aggressively targeted and unmasked by this task force.”

“The U.S Postal Inspection Service’s participation in this task force with our law enforcement partners and the Department of Justice underscores our commitment to keeping the U.S. Mail safe for all who handle and receive it,” said Phoenix Division Acting Inspector in Charge Glen Henderson. “Dark web vendors and their operatives believe they can hide anonymously while perpetrating their crimes. The collaborative effort of this task force proves criminals operating on the web are never truly anonymous and they will be uncovered and prosecuted.”

Over the last several years federal partners have seen an increase in the use of the internet, both clear net and darknet, to facilitate the illegal sale and distribution of narcotics, firearms and parts, technologies, and Personal Identification Information (PII), and other contraband. Additionally, there has been a rise in the use of digital currency to facilitate these activities. The parties to the MOU agree that the unique investigative capability of a DNMDCC Task Force will serve the needs of all the communities within the District of Arizona.

The mission of the DNMDCC Task Force is to disrupt and dismantle criminal organizations that are exploiting the appearance of anonymity on the darknet or using digital currency to facilitate criminal activities, such as drug trafficking, money laundering, theft of PII, and child exploitation. The goal of the DNMDCC will be to provide increased collaboration, enhance resources, and disrupt and dismantle criminal organizations that are using these new and emerging technologies.

OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.