Security & Fraud

ATM Withdrawals Lead To Online Drug Ring Bust

The New York District Attorney’s (DA’s) office has shut down one of the largest drug vendors on the dark web, sinmed, as well as arrested the three men who allegedly ran it. According to Wired, sinmed made millions of dollars by shipping fentanyl-laced heroin, methamphetamines and hundreds of thousands of counterfeit Xanax tablets across the U.S. via Dream Market, the dark web bazaar.

Now, an unsealed indictment shows how the Manhattan DA’s office was able to take down the vendor after receiving a tip in 2017 about suspicious ATM withdrawals.

“For time immemorial, we have been saying that in cases of economic crime, it’s really all about following the money,” said Manhattan DA Cyrus Vance at a press conference. “Pulling the thread and following the money in 2019 today is about knowing where to look on the internet and in cyberspace.”

The indictment alleges that, since late March 2016, Ronald MacCarty, Chester Anderson and Jarrette Codd ordered large quantities of microcrystalline cellulose (MCC) before incorporating a company called Next Level Research and Development. From there, they tried to buy a kilogram of alprazolam (sold commercially as Xanax), as well as a vial filling and capping machine, powder mixer, tablet press machine and Xanax punch dies. The indictment points out that those items are needed “to manufacture and sell tablets containing controlled substances.”

Over the course of their operation, the men shipped more than 1,000 packages to buyers in 43 states, and laundered $2.3 million in cryptocurrency.

“They were a significant vendor,” said Nicolas Christin, a computer scientist at Carnegie Mellon University and tracker of the dark web. “It is definitely a significant arrest.”

The three men allegedly used a system to streamline their revenue as well, funding prepaid debit cards with bitcoin and withdrawing it as cash. The defendants took out more than $1 million (in $700 increments) from ATMs for more than two years. The men have been charged with conspiracy and money laundering, while Anderson, who allegedly operated the Dream Market storefront, has also been charged with criminal sale of a controlled substance and identity theft. All three men have pleaded not guilty.

“To those of you who are actually making these kinds of pills and engaging in this kind of drug transaction online, I think this case is a warning to you: that we are competent in this space, that we know how to find you,” Vance said.

——————————–

Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

TRENDING RIGHT NOW

To Top