Feds Indict Prolific OxyContin Vendor BuyersClub
On August 4, 2020, the United States Department of Justice unveiled an indictment against a darkweb drug vendor responsible for the distribution of millions of dollars worth of OxyContin and morphine pills. The indictment charged a dual U.S.-Costa Rican citizen and a Costa Rican citizen with the following crimes:
conspiring with persons to distribute controlled substances; distribution of controlled substances; conspiring with persons to import controlled substances; conspiring to launder money; laundering of monetary instruments
The indictment named David Brian Pate, a U.S. and Costa Rican citizen, and Jose Luis Fung Hou, a Costa Rican citizen who worked as a pharmacist. Fung, according to the indictment, provided Pate with hundreds of thousands of opioid pills. In turn, Pate sold the pills on various darkweb marketplaces, including Silk Road and Alphabay. Pate laundered the profits and wired a portion to Fung as payment for a new shipment of pills.
“These charges are a warning to drug traffickers worldwide that neither the shroud of the darknet or of virtual currency can hide their illegal activities from the vigilance of U.S. law enforcement,” said Acting U.S. Attorney Michael Sherwin for the District of Columbia. “We are firmly committed to combatting the problem of opioid abuse and breaking through sophisticated cyber-enabled barriers employed by criminals to hide their activities.”
According to the indictment, Pate used the monikers “buyersclub,” “senorpate,” “davidpate,” and “expurdue” on darkweb marketplaces and other platforms related to the conspiracy. In one example provided in the indictment, Pate advertised and sold 20 mg and 40 mg pills of OxyContin on Silk Road under the “expurdue” moniker. He advertised the pills as originating from a pharmacy in Costa Rica.
Pate’s operation involved at least three unnamed co-conspirators who helped distribute narcotics to customers throughout the United States. The co-conspirators worked primarily as re-shippers. Pate mailed packages of pills–disguised as maracas–to the re-shippers. He also provided the re-shippers with a list of customer orders that included the name of the customer, the customer’s address, and the pill quantity purchased by the customer.
The re-shippers repackaged the pills into several smaller packages. They mailed those smaller packages to the customer using the information provided by Pate. Once the customer received the package, they finalized the transaction on the marketplace. The market then released the funds into the vendor account under Pate’s control.
In total, between December 2012 and in or about July 2020, Pate received 23.903.28 Bitcoin from the marketplaces in the table seen above.
Federal investigators know about a number of the pill shipments sent by Pate to the three unnamed co-conspirators. For example:
In June 2015, Pate sent 400 OxyContin pills to Co-Conspirator A.
In or about early June 2015, the re-shipper wired $6,700 to Pate with funds derived from the sale of the 400 OxyContin pills.
In February 2016, Pate sent two packages of OxyContin and Xanax to Co-Conspirator A. The packages contained a total of 10,000 pills. In March 2016, Pate sent a package containing 8.52 pounds of 2 mg Xanax pills to Co-conspirator A. Law enforcement intercepted this package. Law enforcement seized another package from Pate to Co-Conspirator A in March 2016. The package contained:
69.8 grams of purple 30 mg morphine pills; 123.9 grams of pink 20 mg OxyContin pills; 105.6 grams of yellow 40 mg OxyContin pills; and 109.5 grams of yellow 40 mg OxyContin pills.
Undercover agents with the Drug Enforcement Administration (DEA) conducted undercover purchases as a part of the investigation into Pate. In one example described in the indictment, a DEA task-force officer purchased ten 40 mg OxyContin pills from the vendor “buyersclub” on AlphaBay Market. Co-conspirator B mailed an envelope containing ten OxyContin pills to the address provided by the undercover federal agent. The indictment described at least four nearly identical transactions.
In August 2017, Costa Rican law enforcement seized a package sent by Pate to an address in the United States. The package contained 2,214 oxycodone pills and 358 morphine pills. Costa Rican law enforcement seized another package in February 2018 that contained 717 OxyContin and morphine pills. In May 2020, Costa Rican law enforcement seized another package containing an undisclosed number of 40 mg OxyContin pills.
“Today’s case is a great example of how the DEA has infiltrated the darknet and, together with our law enforcement partners, proven that every criminal attempting to sell these deadly drugs is within the reach of the law,” said Special Agent in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration’s (DEA) Washington Field Division.
Indictment: pdf html
The indictment named David Brian Pate, a U.S. and Costa Rican citizen, and Jose Luis Fung Hou, a Costa Rican citizen who worked as a pharmacist. Fung, according to the indictment, provided Pate with hundreds of thousands of opioid pills. In turn, Pate sold the pills on various darkweb marketplaces, including Silk Road and Alphabay. Pate laundered the profits and wired a portion to Fung as payment for a new shipment of pills.
“These charges are a warning to drug traffickers worldwide that neither the shroud of the darknet or of virtual currency can hide their illegal activities from the vigilance of U.S. law enforcement,” said Acting U.S. Attorney Michael Sherwin for the District of Columbia. “We are firmly committed to combatting the problem of opioid abuse and breaking through sophisticated cyber-enabled barriers employed by criminals to hide their activities.”
According to the indictment, Pate used the monikers “buyersclub,” “senorpate,” “davidpate,” and “expurdue” on darkweb marketplaces and other platforms related to the conspiracy. In one example provided in the indictment, Pate advertised and sold 20 mg and 40 mg pills of OxyContin on Silk Road under the “expurdue” moniker. He advertised the pills as originating from a pharmacy in Costa Rica.
Pate’s operation involved at least three unnamed co-conspirators who helped distribute narcotics to customers throughout the United States. The co-conspirators worked primarily as re-shippers. Pate mailed packages of pills–disguised as maracas–to the re-shippers. He also provided the re-shippers with a list of customer orders that included the name of the customer, the customer’s address, and the pill quantity purchased by the customer.
The re-shippers repackaged the pills into several smaller packages. They mailed those smaller packages to the customer using the information provided by Pate. Once the customer received the package, they finalized the transaction on the marketplace. The market then released the funds into the vendor account under Pate’s control.
In total, between December 2012 and in or about July 2020, Pate received 23.903.28 Bitcoin from the marketplaces in the table seen above.
Federal investigators know about a number of the pill shipments sent by Pate to the three unnamed co-conspirators. For example:
Undercover agents with the Drug Enforcement Administration (DEA) conducted undercover purchases as a part of the investigation into Pate. In one example described in the indictment, a DEA task-force officer purchased ten 40 mg OxyContin pills from the vendor “buyersclub” on AlphaBay Market. Co-conspirator B mailed an envelope containing ten OxyContin pills to the address provided by the undercover federal agent. The indictment described at least four nearly identical transactions.
In August 2017, Costa Rican law enforcement seized a package sent by Pate to an address in the United States. The package contained 2,214 oxycodone pills and 358 morphine pills. Costa Rican law enforcement seized another package in February 2018 that contained 717 OxyContin and morphine pills. In May 2020, Costa Rican law enforcement seized another package containing an undisclosed number of 40 mg OxyContin pills.
“Today’s case is a great example of how the DEA has infiltrated the darknet and, together with our law enforcement partners, proven that every criminal attempting to sell these deadly drugs is within the reach of the law,” said Special Agent in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration’s (DEA) Washington Field Division.
Indictment: pdf html
