$2.8 Million Case Marks New York’s First Crypto Money Laundering

Wilfred Michael 

Wilfred Michael

News reporter

24 April 2019,
$2.8 Million Case Marks New York’s First Crypto Money Laundering

According to a Wednesday press release by the Manhattan District Attorney’s Office, Callaway Crain, and Mark Sanchez, both New York residents pleaded guilty to selling controlled substances and laundering the proceeds through Bitcoin and Western Union payments.

Although many crypto critics associate the use of the payment tool with money laundering, the latest development marks the first time that New York would convict an individual for the illegal act.

Nature of the Crime

As per court documents and their guilty pleas, Callaway Crain and Mark Sanchez used a website they called “NextDayGear,” and other places on the dark web to sell controlled substances including steroid and counter-drugs.

Between 2013-2018, the men produced, marketed and shipped as much as 10,000 packages of these substances across the U.S and sixteen other countries, generating at least $2.8 million revenue in the process.

They collected payment from their buyers through Bitcoin and Western Union payments. To convert the cryptocurrencies to cash, they used cryptocurrency exchanges while in the case of WU payments, they used false identities or international wire transfers from foreign-based recipients.

Following their guilty pleas, the release confirms that Callaway Crain and Mark Sanchez will be sentenced on July 12 and should face at least 2.5–7.5 years in jail.

Manhattan District Attorney Cyrus R. Vance, Jr. said in the release that the convicted men, “raked in crypto and cash worth millions on their full-service website that sold prescription-free counterfeit steroids and other controlled substances to customers in all fifty states.”

He warned anyone engaging in such an act to desist from it since the Attorney’s office has the skills and resources to follow the money, shut down the business, and hold the guilty parties accountable.

In a similar development earlier this month, Stmarket.co reported that Canadian authorities convicted, Matthew Phan, an online drug dealer, and requested that he relinquish his 281.41BTC (appr. $1.4 million) generated through the illegal business.

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