Federal Crime

Feds Confiscate $34M In Cryptocurrency From South Florida Resident

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BY: STAFF REPORT | BocaNewsNow.com

PALM BEACH COUNTY, FL (BocaNewsNow.com) (Copyright © 2022 MetroDesk Media, LLC) — The United States Department of Justice late Monday afternoon announced its successful forfeiture of $34M in Cryptocurrency used for “dark web” activity.

The media advisory is published in full. We are also publishing the official USDOJ filing.

FROM DOJ: In one of the largest cryptocurrency forfeiture actions ever filed by the United States, federal prosecutors in the Southern District of Florida successfully forfeited approximately $34 million worth of cryptocurrency tied to illegal Dark Web activity.  

According to the U.S. Government’s civil forfeiture complaint, law enforcement agents identified a South Florida resident raking in millions by using an on-line alias to make over 100,000 sales of illicit items and hacked online account information on several of the world’s largest Dark Web marketplaces.  For example, the South Florida resident sold hacked online account information for popular services such as HBO, Netflix, and Uber, among others, and accessed the Dark Web by utilizing the TOR (The Onion Router) Network. The Onion Router Network is a special network of computers distributed around the world designed to anonymize a user’s internet traffic by concealing computers’ IP (Internet Protocol) addresses. 

As detailed in the complaint, records analyses revealed that the South Florida resident utilized so-called “tumblers” and illegal Dark Web money transmitter services to launder one cryptocurrency for another—a technique called “chain hopping”—in violation of federal money laundering statutes.  A tumbler is a Dark Web mixing service that pools together multiple cryptocurrency transactions. Then, the tumbler distributes the cryptocurrency to a designated cryptocurrency wallet at random times, and in random increments. The goal is to obscure the original source of funds. Law enforcement agents seized various cryptocurrency wallets associated with the illegal Dark Web conduct.   

This forfeiture action is the result of Operation TORnado, a joint investigation that stems from the ongoing efforts by OCDETF, a partnership between federal, state and local law enforcement agencies.  The principal mission of the OCDETF program is to identify, disrupt, and dismantle the highest-level drug traffickers, money launderers, and other priority transnational criminal organizations that threaten the citizens of the United States using a prosecutor-led, intelligence driven, multi-agency approach to combat transnational organized crime.  The OCDETF program facilitates complex, joint operations by focusing its partner agencies on priority targets, by managing and coordinating multi-agency efforts, and by leveraging intelligence across multiple investigative platforms.



Paul Saperstein


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