US Attorney Seeks Forfeiture of over $54 million in Crypto
Castelluzzo and Atwell
According to court documents, Christopher Castelluzzo and his accomplices started distributing drugs through the dark web in 2013. In 2014, he acquired ETH which is now worth over $54 million, using the proceeds of the drug trafficking operation.
Castelluzzo was in charge of sourcing the drugs sold through the vendor accounts while his accomplice, Luke Atwell, was in charge of running the dark web vendor accounts. The other accomplices packaged the drugs according to the orders received from their customers.
Castelluzzo imported large quantities of methylone from China and had Atwell resell it through the dark web marketplaces. The duo also bought and resold large amounts of cocaine.
In July 2014, Castelluzzo asked Atwell to send him 15 bitcoins so that he could participate in the Ethereum ICO. After receiving the bitcoin, Castelluzzo purchased 30,000 ETH in the ICO.
A federal jury found Castelluzzo and Atwell guilty of conspiracy to distribute and possess with intent to distribute a controlled substance in May 2015. Castelluzzo was sentenced to 20 years in prison. Atwell was sentenced to 18 years and four months in prison.
In May 2018, Castelluzzo and Atwell were sentenced to 21 and 19 years in prison respectively, after they pled guilty to state drug trafficking charges.
In 2021, monitored jail calls revealed that Castelluzzo, Atwell, and a third accomplice, Brian Krewson, were planning to move the 30,000 ETH overseas before seizure by LE.
One of the recorded phone calls
The recorded phone call revealed that the trio's plan revolved around how they could move the ETH without raising suspicion. They were also looking at ways of paying as little tax as possible or not paying it at all.
The investigators executed a search warrant at Krewson’s residence on July 12, 2022. Krewson gave the investigators the password to the wallet with the 30,000 ETH. In addition to the ETH, the investigators also seized approximately 153,925.11 CRO, 244.23 BNB, 64.19 SOL, and 23,848.96 ADA.
The Ethereum hard fork gave Castelluzzo 30,000 ETC. Castelluzzo instructed Krewson to invest the ETC. The investigators established that Krewson spent 2,000 ETC on Castelluzzo’s prison commissary account. He used to fund an account on Bittrex and used it to purchase other cryptocurrencies.
On August 16, 2023, the investigators seized approximately 32,232.24 ALGO, 99.48 AVAX,0.49 BTC, 1,150.71 DOT, 1,589.32 LINK, approximately 17,208.48 MATIC, 393 TUSD, and 2,466.36 UNI from the Bitrrexx account.
The investigations also revealed that from April 14, 2014, to July 25, 2014, bitcoin wallets associated with Castelluzzo's drug trafficking operation received at least 336 BTC from the Blue Sky marketplace.
Forfeiture of the seized crypto will deny Castelluzzo and Atwell the chance to spend life after prison at an offshore destination.
Comments (18)
thegreyswraith2023-11-11c8686820
The US govt as of oct is the worlds largest holder of bitcoin. All via seizures. They will steal from us until we make it stop. No more war. Games without frontiers, war without tears. That is the answer. A cosmic dropping of the powerful and corrupts masks into the hands of the waiting masses to see them for what demons they are as well.
Johnny Nantucket2023-11-048bbbe854
Forfeiture of the seized crypto will deny Castelluzzo and Atwell the chance to spend life after prison benefiting from the gains made from the drug selling activities. Were these gains made by usual career pursuing success then of course they could live in an offshore destination benefiting from that success. They can also move to an offshore destination by trying to emigrate to such a destination. I´m a foreigner myself. My parents moved to Germany. They never would have considered selling drugs in Germany. They didn´t even know or don´t know Led Zeppelin. I was born in the 1970´s. So Led Zeppelin is a kind of music which I try to get to know better. Sure. Maybe it would have been a cool vacation if my parents and I had traveled to the Bahamas. You don´t have to be black and American to feel poor. I am not saying that Castelluzzo or Atwell did or do consider selling drugs at the Bahamas.
CURRENT VENDOR2023-11-052b93effe
FUCK THE US GOVERNMENT. THIS IS SAD. OUR COUNTRY IS ROTTING FROM THE TOP DOWN
BadHippy2023-11-073741932d
One thing I don't understand: It says "Krewson gave the investigators the password to the wallet with the 30,000 ETH." Why the fuck would you give them the password? I know they had a search warrent so if they foung the password written down somewhere, okay they got you. But to just tell them the password, am I the only one thinking that this Krewson is a real fucking dumbass.
thegreyswraith2023-11-1179d374c6
I would use that PW for leverage forever on house arrest and wake up and set up S and G corps and use monero and BTC cash. duh. 11 years we know this. Come on. matic, all the fucking wallet tracing corps out there, stay away from kYc and traceable crypto. Remember, in the US in 2017, the house and senate sent a bill to pres trump that said crypto is cash. Simple as that HE signed it. Then Gary fucking ginsler and the socialist come along. Yay.
NS5552023-11-08df6331e1
Dumb asses got what they deserved. This is what happens when you brag to everyone and have the need to be validated.
Realdingo2023-11-08a6a11652
What resilience! Here these guys are spending their days in jail, looking at big time in the big house, and all they want to do is plot how they will spend their millions in the Bahamas.! A bikini clad waitress hands them tall exotic drinks as they stretch out on deck chairs with a grand view of the ocean. Yeah, so glad we beat the rap.
Stop Self Snitching2023-11-30ceb4cbae
There are 2 basic lessons in this article if you read between the lines here- #1 USE MONERO #2 STOP SELF SNITCHING We're talking about $54 million - idgaf who you are or what you threaten me with , for $54M's I'll take my chances but I'm def not just giving up passwords. Everything these guys worked for was lost - they're doing time.....ALOT OF TIME and could have at least had this to show for it all! What a scumbag douchebag of a self snitch!
SexyWaffle2023-11-0332a0a221
Just another day of the government being fake and gay.