Cooperative, International Effort Leads to Three Dark Web Arrests

A criminal complaint filed Wednesday in U.S. District Court in Los Angeles alleges that three defendants, currently in German custody, were administering a sophisticated online marketplace to sell illicit goods and substances. These arrests follow a nearly two-year international investigation involving U.S. law enforcement authorities, authorities in Germany, and authorities in the Netherlands.

Federal prosecutors have charged a 23-year-old resident of Kleve, Germany; a 31-year-old resident of Wurzburg, Germany; and a 29-year-old resident of Stuttgart, Germany.

According to a Department of Justice (DOJ) release, the three individuals allegedly administered the Wall Street Market (WSM), which was one of the world’s largest dark web marketplaces that allowed vendors to sell a variety of illegal materials in six languages. Approximately 5,400 vendors sold illicit goods to about 1.15 million customers around the world. The website function on the Tor network, allowing it to exist on a hidden network with user identities concealed.

Last month the administrators are alleged to have committed an “exit scam” in which all the virtual currency in the marketplace escrow and user accounts was diverted into the administrator’s personal accounts.  Investigators believe this currency totaled about $11 million.

According to the release, a fourth individual was also charged in the U.S. Marcos Paulo De Oliveira-Annibale of Sao Paulo, Brazil faces federal drug distribution and money laundering charges for allegedly acting as a moderator who mediated disputes between vendors and their customers, among other things.

“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.”

The criminal complaint also notes that these same administrators are believed to have operated another German-based dark web marketplace that was shut down in 2016.

Vendors on WSM have been linked to major drug distribution networks. Two of the “top vendors” on WSM advertised and sold drugs such as fentanyl, oxycodone, hydrocodone, methamphetamine, and Adderall to customers in the U.S., Germany, and Australia.

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.

The three individuals arrested for administering WSM face charges in both the U.S. and Germany.

The U.S. case is the result of an investigation by the FBI, DEA, U.S. Postal Inspection Service, IRS Criminal Investigation, and HSI, and was supported and coordinated by the Department of Justice’s multi-agency Special Operations Division (SOD). 

Posted in The Takedown

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