This week we’ll continue our review of the Dark Web and its interplay with the criminal justice system. Last week we gave a general overview of what the Dark Web is and how people use it. The Dark Web has been front and center in many high-profile criminal prosecutions all over the world.
The Silk Road case received worldwide press coverage. As a marketplace operating on the Dark Web, Silk Road transacted more than $1.2 billion in sales during its operation between 2011 and 2013, according to a Forbes estimate. Before it was shut down, Silk Road grew to be the world’s most popular Dark Web marketplace.
The Silk Road marketplace allowed users to purchase a variety of illegal items including drugs and drug paraphernalia. Reports also indicate the marketplace provided access to hitmen for hire. Other sources indicate users could have purchased illegal weapons, tutorials on hacking ATM machines, and stolen user information from various email accounts and social networks.
As the site gained notoriety, federal law enforcement agencies took note and launched an investigation. In 2013, the site was shut down, and an American, Ross Ulbricht, was arrested and charged with money laundering, computer hacking, conspiracy to traffic fraudulent identity documents, and conspiracy to traffic narcotics. Ulbricht received a life sentence without the possibility of parole. The U.S. Court of Appeals for the Second Circuit upheld the conviction in 2017.
During the investigation, two federal agents used their access to information about the investigation to profit personally from Silk Road. Carl Force, who was earning $150,000 per year as a DEA Agent, pilfered roughly $800,000 from Silk Road, which he used to pay personal bills. Shaun Bridges, a special agent with the Secret Service, also used his access to the investigation to profit personally. Both men received prison sentences for their actions. Read the criminal complaint filed in the United States District Court of the Northern District of California here.
AlphaBay was reportedly launched in September 2014. AlphaBay saw steady growth, and by late 2015, it was reported to be the largest online Dark Web market with more than 200,000 users. AlphaBay developers introduced support for the cryptocurrency Monero in addition to Bitcoin.
As a marketplace, AlphaBay provided users access to drugs, weapons, stolen user data, and other illicit fare. In early March 2015, stolen Uber accounts were reportedly for sale on AlphaBay. The listing caused Uber to issue a formal press statement. In late 2015, AlphaBay again made headlines when it hacked into and stole information from UK-based telecommunications company TalkTalk. The notoriety AlphaBay garnered from the media coverage helped put it on law enforcement’s radar.
By May 2017, U.S. law enforcement agents were reportedly active on AlphaBay. By June 2017, an indictment for Alexandre Cazes, AlphaBay’s creator and Canadian citizen, was filed in the United States Court of the Eastern District of California. Cazes was arrested in Thailand by Thai officials at the request of U.S. law enforcement. Cazes took his own life rather than face extradition to the United States. U.S. officials also filed a civil forfeiture action against the assets of Cazes and his wife.
Cazes made several poor decisions that led to law enforcement being able to identify him personally, despite AlphaBay being operated on the Dark Web. He used his personal Hotmail address, which was used for his LinkedIn profile and his computer repair business in Canada, to communicate with AlphaBay users. He also reused a username from other public forums. When Cazes was arrested, law enforcement found him actively administering an AlphaBay server, and his laptop contained detailed records of AlphaBay’s business.
Fake ID Ring in Toledo
In early March 2018, the Department of Justice issued a press statement identifying four individuals charged in an indictment with having operated a highly profitable fake ID production operation. The indictment charges include the production of false identification documents, possession of document-making implements and authentication features, and the transfer of false identification documents. It is reported the operation produced IDs for the states of Ohio, Michigan, and Utah.
Mark Alex Simon, the alleged leader of the operation, worked under the username TedDanzigSR and was reportedly very active as a merchant on the Dark Web and on Reddit.
Law enforcement seized more than $5 million worth of bitcoin and hundreds of thousands of dollars in cash, gold, and silver.
Dark Web Buyers Targeted
The Silk Road and AlphaBay cases involved law enforcement targeting the operators of entire Dark Web markets, but in the Toledo fake ID case, law enforcement targeted an individual vendor. Law enforcement has also targeted individual purchasers of Dark Web contraband.
A Massachusetts teenager was arrested for attempting to sell Xanax he had acquired using the Dark Web. School officials were tipped off that Ethan Morris may be selling drugs and alerted law enforcement; the investigation led to Ethan Morris’ arrest on various drug-related charges. The Xanax Morris had been selling was allegedly counterfeit.
A drug ring at the United States Naval Academy was uncovered in March 2018 when Academy officials were tipped off by a student. The ensuing investigation uncovered a drug ring operated by approximately 10 midshipmen.
Access to Dark Web marketplaces gives local drug traffickers reliable access to suppliers. As more individuals leverage the Dark Web, law enforcement contacts will continue to increase.
Law Enforcement Tactics
In the Silk Road case, two law enforcement officers used their access to the investigation to profit personally. The anonymity of the Dark Web and the sheer volume of money moving through major Silk Road transactions led to staggering corruption.
In Part 3 of our Dark Web series, we’ll take an in-depth look at another controversial law enforcement investigation, Operation Pacifier.