The U.S. authorities have arrested Chester Anderson and co-conspirators Jarrette Codd and Ronald MacCarty, after taking down a dark web drug ring which laundered $2.3 million worth of cryptocurrency.
The three men were indicted for operating online stores on the dark web that sold and shipped hundreds of thousands of counterfeit Xanax tablets and other controlled substances to buyers across 43 U.S. states.
More than 100 officers carried out the raid and made the arrests in South Brunswick, Jamesburg and Vineland, among other locations. The bust was huge that investigators called it "the largest quantity of pills in New Jersey State history."
Seized drugs also include approximately 420,000 to 620,000 alprazolam tablets, some 500 glassines of fentanyl-laced heroin, quantities of methamphetamine, ketamine, as well as GHB and steroids.
At the site, the police also found four pill presses and two industrial mixers, some other drug manufacturing items, and also thousands of dollars worth of cryptocurrency.
Anderson, Codd, and MacCarty are charged with conspiracy in the fourth and fifth degrees, as well as money laundering in the first degree. Anderson was also charged with multiple counts of criminal sale of a controlled substance in the fourth and fifth degrees, and identity theft in the first degree.
According to Manhattan District Attorney Cyrus Vance, it all started when his office received reports about suspicious activities at ATMs in New York and New Jersey.
At that time, unusually large amounts of cash were being withdrawn from the ATMs throughout the cities, including a series of transactions at a special teller machine that converted cryptocurrency to cash.
Initially, the investigators didn't quite know what they had and what they were dealing with. But they worked worked to identify precisely who had withdrawn the money, which exceeded $1 million. The assembled team followed where the money went using their Cyber Lab. which resulted in a two-year investigation that uncovered a dark web counterfeit drug seller "whose $2.3 million operation spanned the U.S.,” said Vance.
According to court documents, Anderson operated two dark web store fronts, using the screenname 'sinmed'' to sell alprazolam and other controlled substances. Codd and MacCarty helped Anderson with the drugs' manufacturing process and equipment procurement.
Additionally, the Manhattan DA Cybercrime and Identity Theft Bureau identified over 1,000 packages that were sent by the defendants from New Jersey to locations across the U.S., and seized an additional 8,000 tablets by intercepting several of these.
The authorities were able to get their hands on the packages because the majority of them had return addresses that falsely identified the sender as a Manhattan business, including multiple Manhattan law firms, and a real estate agency.
It was also discovered that Anderson and MacCarty had created a shell company, Next Level Research and Development, to ease their attempts in buying over 1,000 kilograms of microcrystalline cellulose – the main ingredient used to make pharmaceutical tablets.
As part of the scheme, they also used MacCarty’s phone repair store in Asbury Park, N.J., The Wireless Spot, to house their drug factory with two industrial power mixers, punch dies to imprint pills with brand names and four pill presses, each of which could produce 16,000 pills per hour, the prosecutors said.
Anderson then advertised the narcotics using two storefronts on a dark web shopping site called Dream Market, which is like its infamous predecessor, the Silk Road, is the place full of illegal drugs and other goods that can be bought, the authorities said.
This isn't the first time cryptocurrency has been used to as a method of payment on dark web operations, and it surely won’t be the last.