The seven-count indictment charged David Brian Pate, 44, a U.S. and costa Rican citizen, and Jose Luis Fung Hou, 38, a costa Rican citizen, with counts of conspiring with persons to distribute controlled substances, distribution of control substances, conspiring with persons to import control substances, conspiring to launder money, and launder of monetary instruments .
“ As alleged in the indictment, the defendants helped fuel our deadly opioid drug epidemic by hiding behind the darknet and cryptocurrency to profit from the sale of illegitimate opioids into the United States, ” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department ’ s Criminal Division. “ fortunately, by working with our law enforcement partners across the United States and oversea, we were able to uncover this darknet opioid marketplace and bring to justice those responsible. ”
“ These charges are a warn to drug traffickers worldwide that neither the shroud of the darknet or of virtual currency can hide their illegal activities from the watchfulness of U.S. law enforcement, ” said Acting U.S. Attorney Michael Sherwin for the District of Columbia. “ We are hard committed to combatting the problem of opioid abuse and breaking through sophisticate cyber-enabled barriers employed by criminals to hide their activities. ”
“ The opioid epidemic is a crisis crippling many families in this country, ” said special Agent in Charge Kelly R. Jackson of the IRS Criminal Investigation ( CI ) Washington D.C. Field Office. “ This international group profited off of people ’ mho addictions, revictimizing them when they were already vulnerable. This group intentionally distributed opioids that did not contain a guard additive and prevent inhalant of the drug. Years ago when drug dealers and traffickers moved to the darknet and started using virtual currentness to conceal and expand their network, CI besides moved our playing field to the darknet to bring groups like this to judge. ”
“ Today ’ second case is a great model of how the DEA has infiltrated the darknet and, together with our law enforcement partners, proven that every condemnable undertake to sell these deadly drugs is within the reach of the law, ” said special Agent in Charge Jesse R. Fong of the U.S. Drug Enforcement Administration ’ second ( DEA ) Washington Field Division .
The indictment alleges that Pate illegally purchased narcotics, including OxyContin and morphine pills, primarily from Fung, a pharmacist in Costa Rica. Pate would launder payments to Fung to purchase narcotics. Pate then sold these narcotics on numerous darknet markets, including Silk Road and AlphaBay, in exchange for bitcoin. Pate utilized respective on-line monikers including “ buyersclub ” on darknet markets, on-line forums, and bitcoin exchanges. Pate advertised that he was selling the “ erstwhile formula ” of OxyContin, which did not contain tamper-resistant features such as a crush-proof feature that prevented a exploiter from inhaling or injecting the pills after pulverizing them.
The indictment far alleges that Pate ’ second darknet sales involved him sending bulk shipments of narcotics in pill class from Costa Rica, frequently concealed in tourist souvenirs such as maraca, to co-conspirator re-shippers in the United States. Pate would then send the re-shippers a list of customer orders, which included customer ’ sulfur names, the customer ’ s shipping address, and the quantity of pills they purchased. The re-shippers created smaller packages of pills, which they then mailed to the customer. once the shipments were received by the customer, the darknet grocery store would release funds in bitcoin, which were held in escrow until the transaction was completed, into Pate ’ randomness bill on the darknet market. Customers paid Pate over 23,903 bitcoin for these darknet commercialize sales. The co-conspirators besides laundered payments in the form of bitcoin and international telegram transfers .
The charges in the pleadings are merely allegations, and the defendant is presumed innocent until prove guilty beyond a reasonable doubt in a court of law.
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IRS-CI Cyber Crimes Unit, DEA, and the U.S. Postal Inspection Service investigated this sheath. The Justice Department ’ s Office of International Affairs and rib Rican authorities provided aid .
The case is being handled by Trial Attorney C. Alden Pelker of the Criminal Division ’ s Computer Crime and Intellectual Property Section, Assistant U.S. Attorneys Zia M. Faruqui and Laura Crane of the U.S. Attorney ’ south Office for the District of Columbia, Paralegal Specialist Brian Rickers and Teesha Tobias, and Legal Assistant Jessica McCormick. Additional aid has been provided by early Assistant U.S. Attorneys Youli Lee and Kara Traster, and Paralegal Specialist Toni Anne Donato .
The year 2020 marks the hundred-and-fiftieth anniversary of the Department of Justice. Learn more about the history of our representation at www.Justice.gov/Celebrating150Years .