Father and Son Sentenced for Laundering Millions in Bitcoin

~2 min read | Published on 2024-01-09, tagged BitcoinDarkweb-VendorSeizedSentenced using 331 words.

A Father and son were imprisoned for conspiring in the laundering of proceeds of a dark web drug trafficking operation.

On January 8, 2024, Joseph Farace, 72, of Maryland was sentenced to 19 months in federal prison for helping his 38-year-old son, Ryan Farace, launder bitcoin he acquired from the distribution of counterfeit Xanax pills through the dark web.
According to court documents, Ryan Farace made over 9,138 Bitcoin from a dark web drug trafficking operation that operated from November 2013 to June 2017. Ryan Farace and his accomplice distributed more than 920,000 counterfeit Xanax pills through the "Xanaxman" vendor profile on multiple dark web marketplaces.
Ryan Farace was sentenced to 57 months in prison for conspiring in drug distribution and money laundering in November 2018. He was also ordered to forfeit $5,665,000 and 4,000 Bitcoin. He told the court that he had no access to the rest of the bitcoin he had acquired from the drug sales.
While in prison, Ryan Farace and his father conspired with others and attempted to move the bitcoin he had not forfeited. In 2019 Ryan Farace sent 79 bitcoins from wallets under his control to exchanges and made purchases from merchants that accepted bitcoin. Some of the purchases included gift cards worth $3,341.65 he sent to his father.
In August 2020, Ryan Farace asked his father to transfer more than 2,874 Bitcoin to a third party, who would then deposit funds into a foreign bank account. Ryan Farace mailed his father a prison library book with the recipient's Bitcoin address typed into the book's back cover. Joseph Farace completed the transfer in September.
In February 2021, investigators seized all of the bitcoin they had transferred. On May 11, 2021, the investigators seized an additional 58.7421 Bitcoin.
In his plea agreement, Ryan Farace agreed to forfeit approximately 2957.9551 bitcoins seized during the investigations.
Ryan Farace was sentenced to 54 months in federal prison on January 5, 2024. His father's 19-month prison sentence will be followed by two years of supervised release.