Daniel McMonegal, 36, of San Luis Obispo, pleaded guilty today to conspiring to distribute a controlled substance, U.S. Attorney McGregor W. Scott announced.
According to court documents, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market. McMonegal was also the owner of a marijuana delivery service in San Luis Obispo called West Coast Organix, which claimed to be a nonprofit medical marijuana cooperative. McMonegal then laundered the bitcoin proceeds of his drug distribution through an undercover agent located in New York. After receiving the bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa. In total, McMonegal distributed approximately 146 kilograms of marijuana in exchange for approximately $476,500 in bitcoin.
This case is the product of an investigation by Homeland Security Investigations (HSI). Assistant U.S. Attorney Grant B. Rabenn is prosecuting the case.
McMonegal is scheduled to be sentenced by U.S. District Judge Lawrence J. O’Neill on Nov. 12. McMonegal faces a maximum statutory penalty of 20 years in prison and a $1 million fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was the product of Operation Dark Gold, a coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the dark web. Special Agents of the HSI New York Field Division, in coordination with the U.S. Attorney’s Office for the Southern District of New York, posed as a money launderer on dark web market sites, exchanging U.S. currency for virtual currency. Through this operation, HSI New York was able to identify numerous vendors of illicit goods, leading to the opening of more than 90 active cases around the country. The Money Laundering and Asset Recovery Section (MLARS) of the Department of Justice’s Criminal Division, working with more than 40 U.S. Attorney’s Offices throughout the country, coordinated the nationwide investigation of over 65 targets that lead to the arrest and impending prosecution of more than 35 dark net vendors, including McMonegal.