Bitcoin Laundering: Two NY’ers Convicted in $3 Million Drug-Infused Scam
By CCN: Callaway Crain and Mark Sanchez recently pleaded guilty to money laundering in New York. Investigators allege the pair earned close to $3 million selling steroids and controlled substances, mostly in bitcoin. They were first arrested almost exactly a year ago.
$2.8 Million Over Six Years for Homemade Steroids
Crain and Sanchez operated on the clear and dark webs and left New York in 2015 to continue their enterprise in Texas. The guilty plea gives them guaranteed sentences of no more than seven-and-a-half years but no less than two-and-a-half. Each is convicted of a second-degree money laundering and fifth-degree drug trafficking, both felonies.
According to a note on the Manhattan District Attorney’s page, the men manufactured the steroids themselves in private residences. They reportedly sold to at least one NFL player and a few other prominent people through a string of websites called “NextDayGear.” They even sold to police officers, according to the DA:
“The defendants purchased steroids, precursor chemicals, and other controlled substances wholesale from China and other countries. After obtaining the chemicals and substances, they mixed, pressed, and packaged them, often under brand names they created; advertised and sold them online; and shipped them to customers in all 50 states and sixteen countries. Their customers included a college football player, an NFL football player, a professional volleyball player, fitness trainers, police officers, members of the armed services deployed overseas, body builders, drug dealers, doctors, lawyers, and a high school athletic coach.”
Callaway Crain’s mugshot courtesy of Arrests.org.
The notice doesn’t name the exchange that the men used to convert from crypto to cash, but it does mention that they tried to tumble the coins in a rather lazy manner: they just hopped them to an intermediary wallet before depositing them on exchanges. There are professional coin-mixing services that might have been useful for a business like this, but they take time and cost money.
If customers chose not to pay in bitcoin, they could use Western Union, which the men would have sent to fake identities.
