PORTLAND, Ore.—On January 18, 2022, a Springfield, Oregon person pleaded guilty for distributing cannabis on the darkish website and laundering his cryptocurrency proceeds.
Robert Kelly O’Neill, 59, waived indictment and pleaded responsible to possession with intent to distribute cannabis and revenue laundering.
In accordance to court docket documents, beginning all around January 2016, Homeland Stability Investigations (HSI) and the U.S. Postal Inspection Assistance (USPIS) began investigating the popular importation and on-line distribution of controlled substances on darkish website marketplaces. As section of the investigation, HSI and USPIS uncovered widespread laundering of illicit electronic forex proceeds across the region, which include in Oregon.
The investigation uncovered a revenue laundering procedure involving a darkish internet seller, GOLD, who exchanged Bitcoin for dollars. GOLD gained Bitcoin from customers and, in trade for a rate, would mail or ship hard cash to a physical mailing deal with supplied by the buyer.
As the investigation ongoing, agents determined an personal utilizing the alias “Resinate” who utilized GOLD’s income laundering expert services. Resinate made use of a variety of addresses, which includes a number of Oregon addresses, to acquire hard cash shipments. Pursuing delivery of the cash offers, recognised and mysterious coconspirators would retrieve and produce the packages to Resinate.
In October 2016, GOLD was arrested and an HSI agent in New York assumed his identity and continued conducting offers with Resinate. Among September 2015 and May well 2018, Resinate laundered far more than $725,000 in illicit proceeds via GOLD and a different $167,000 in Bitcoin by way of a co-conspirator in Springfield. In addition, data from the dim internet websites Silk Street and Silk Road 2. confirmed that, in 2013 and 2014, Resinate attained $390,000 in Bitcoin from the sale of marijuana.
In June 2018, law enforcement executed various federal look for warrants at nominee home addresses and on O’Neill’s Springfield residence. Investigators uncovered a cannabis processing and packaging procedure in O’Neill’s garage and seized dozens of computers and electronic storage equipment from O’Neill’s residence. Agents also uncovered handwritten notes pinpointing O’Neill as Resinate. A forensic evaluation of O’Neill’s electronic equipment returned Bitcoin wallet addresses, photos and particulars of O’Neill’s various dim net market vendor accounts, encrypted emails in between O’Neill and the undercover HSI agent, and cryptocurrency wallet backups.
In addition to the digital and physical evidence, investigators discovered and seized additional than $21,469 in U.S. forex, 6 Bitcoin, and 458 Bitcoin Funds.
On September 3, 2021, O’Neill was charged by legal details with possession with intent to distribute marijuana and income laundering. He will be sentenced on April 26, 2022 in advance of U.S. District Court Choose Michael J. McShane.
Possession with intent to distribute cannabis is punishable by up to 20 yrs in prison, a $1 million great, and 5 years’ supervised release. Cash laundering is punishable by up to 20 a long time in prison a fantastic of $500,000 or twice the worth of the assets concerned, whichever is higher and a few years’ supervised launch.
As part of his plea agreement, O’Neill has agreed to forfeit the U.S. forex, Bitcoin, and Bitcoin Dollars seized by brokers.
U.S. Lawyer Scott Erik Asphaug of the District of Oregon designed the announcement.
This case was investigated by HSI, USPIS, IRS Felony Investigation, in addition to assistance by numerous state and local regulation enforcement agencies. Assistant U.S. Attorneys Gavin W. Bruce prosecuted the circumstance.
This situation is portion of Procedure Darkish Gold, a coordinated, countrywide law enforcement procedure, declared in June 2018, that made use of the initially nationwide undercover motion to target sellers of illicit products on the dark net. HSI specific agents in New York, in coordination with the U.S. Attorney’s Office environment for the Southern District of New York, posed as a money launderer on dim world wide web current market web sites, exchanging U.S. forex for virtual forex. As a result of this procedure, HSI New York recognized a lot of vendors of illicit products, primary to much more than 90 criminal scenarios across the region.