First Crypto Money Laundering Case Reported in New York

The Manhattan District Attorney’s Office on Wednesday, announced the conviction of two 35-year-olds, Callaway Crain and Mark Sanchez who laundered $2.8 million gained through online sales of steroids and controlled substances.

Between 2013 and 2018, the convicts pleaded guilty to selling steroids and other hard drugs such as Viagra across the United States and 16 other countries using their website dubbed “NextDayGear” and in other dark web spaces.

According to the release, both men sold over 10,000 packages on these sites, after which they accept payments in fiat currency via Western Union or through cryptocurrency using Bitcoin wallets.

The Attorney’s office precisely states that most of their customers usually make their payments in crypto (Bitcoin), after which the convicts will launder the payment proceeds through one or more “intermediary” crypto wallets to overshadow the fund’s source.

After receiving payments, they convert the Bitcoins to fiat currency (U.S. dollars) through cryptocurrency exchanges before withdrawing the funds to their local bank account.

In the case of Western Union payments, the release notes that the Western Union funds were laundered through fake user identities or by international wire transfers from receivers outside the country.

Cyrus R. Vance, Jr., Manhattan District Attorney said in the release,

“These defendants raked in crypto and cash worth millions on their full-service website that sold prescription-free counterfeit steroids and other controlled substances to customers in all 50 states.”

More like a warning, Mr. Vance said that online drug dealers in New York should always remember that despite the nature of their site (either plain or in dark web), his Office has the resources and skills to track and shut down such businesses and find the culprits.

Meanwhile, following the guilty plead by Callaway Crain and Mark Sanchez, they will return to court for sentencing on July 12 and could face a jail term anywhere between  2.5 to 7.5 years.

Just yesterday in another crypto crime case, Coinfomania reported that a high school student received a 10-year jail term for stealing $7.5 million worth of cryptocurrencies.