Alleged Darkweb Vendor Sent Bitcoin to the Feds

~3 min read | Published on 2019-05-30, tagged BitcoinDarkweb-VendorFEDS using 501 words.

A federal grand jury indicted a Texas man for allegedly selling fentanyl on the darkweb and laundering hundreds of thousands of dollars in bitcoin through bitcoin wallets controlled by federal law enforcement agents.
The ICE-HSI Announcement

An indictment against an accused darknet drug dealer, unsealed Friday, charges him with leveraging bitcoin’s apparent anonymity to sell fentanyl online.
This indictment was announced by U.S. Attorney for the Northern District of Texas Erin Nealy Cox. This case was investigated by:

  • U.S. Immigration and Customs Enforcement’s Homeland Security Investigations;
  • IRS’s Criminal Investigation Division’s Los Angeles field office; and the United States Postal Inspection Service.

  • A federal grand jury charged Sean Shaughnessy, a 51-year-old Texan, with:

  • conspiracy to possess with intent to distribute controlled substances;
  • distribution of a controlled substance;
  • distribution of a controlled substance analogue;
  • and eight counts of money laundering.

  • He waived his detention hearing May 28 and will remain in custody until trial.
    U.S. Attorney Nealy Cox:
    Darkweb dealers often believe that by using bitcoin, they can evade authorities. This prosecution proves that’s not the case. We will continue to pursue anyone peddling this deadly drug — on the streets or online.

    Katherine Greer, Acting Special Agent in Charge of HSI Dallas:
    Our significant domestic and international HSI resources and expertise, along with the considerable resources of our law enforcement partners, provided an unbeatable team to investigate this fentanyl smuggling operation so that we could effect this indictment. This deadly drug – combined with the secrecy of bitcoin currency – represent a significant danger to an already-devastating national opioid epidemic.

    According to the indictment, which was unsealed May 24 following the defendant’s initial appearance, Shaughnessy allegedly sold fentanyl and fentanyl analogues over the dark web. Shaughnessy’s buyers purchased the fentanyl and fentanyl analogues, which was shipped to their addresses, using cryptocurrencies like bitcoin, the indictment alleges.
    One user, who allegedly purchased a fentanyl analogue from Shaughnessy, overdosed on the substance and died.
    Laundering Through the Feds

    Shaughnessy allegedly transferred his bitcoin proceeds to other cryptocurrency wallets in exchange for regular fiat currency, which was shipped to his home in Dallas. Unbeknownst to Shaughnessy, however, he sent more than $120,000 in bitcoin to wallet addresses controlled by federal agents.

    This case resembles the cases that stemmed from Homeland Security Investigation’s “Operation Dark Gold” wherein federal agents had taken control of a money launderer’s accounts, accepted bitcoin from prolific darkweb vendors, shipped paper currency to the vendors, and then used the information as evidence in cases against the vendors.

    Not to Be Confused with Another Opioid Case

    In March 2015, Sean Michael Shaughnessy—46-years-old the time—was arrested in North Carolina after Homeland Security Investigation and the United States Postal Inspection Service conducted a controlled delivery of a large shipment of heroin. I am unable to find any official reports of the arrest that confirm this person’s actual date of birth. If the news reports from the event are accurate, the Shaughnessy arrested for ordering bulk heroin in 2015 could only be 50 years old as of this article’s publication. Although the similarities between the two cases are abnormally high, they are likely unrelated.