Texas drug trafficking gang jailed for money laundering using cryptos

A Texas drug trafficking cartel comprising six individuals has been slapped with sentences ranging from probation to 84 months for money laundering involving cryptocurrencies.

The ruling was reached following investigations involving several law enforcement agencies including the FBI, DEA, police chiefs from Houston and Mason as well as the United States Postal Inspection Services as part of the Organized Crime Drug Enforcement Taskforce (OCDETF).

This collaboration has been viewed as evidence of US authorities’ efforts in tackling high-level drug traffickers and money launderers, with emphasis on dismantling these illegal networks that exploit online platforms for illegal activities.

The Texas drug gang laundered $50,000 monthly

Between July 2019 and December 2020, the darknet drug trafficking gang which operated under the code name “Loverbois” sold almost 12 kilograms of methamphetamine on a monthly basis and laundered about $50,000 through cryptocurrency.

The drugs were distributed disguised as Adderall pills. During the same period, the gang processed about 20 drug orders daily.

The US Attorney’s Office for the Southern District of Ohio revealed the sentencing of the six individuals, making up the “Loverbois” team.

“The defendants sold at least 11.98 kilograms total of methamphetamine in pills and laundered between $15,000 and $50,000 per month using cryptocurrency.”

Court documents.

The illegal operation was exposed after undercover law enforcement agents in Ohio ordered and received shipment of the fake pills, which subsequently led to a federal grand jury indictment in June 2021.

According to Hoodline, one of the gang members Kevin Tran received his sentence on September 30.

Each gang member executed specific tasks

According to the court documents, an individual identified as Duc Cao Phung created and ran the Loverbois’ accounts during the crime, taking orders online and generally overseeing the crypto transactions.

Phung reportedly obtained the pills from William David Goode Harris and Ainoa Winniec Plumber Guzman who were responsible for creating the drugs at their Houston residence using industrial equipment including a mixer and pill presser.

Tran was responsible for supplying the drugs and transactions, while Guzman’s right hand, Zachary Kacmar Pray, was responsible for handling logistical tasks.

According to the court papers, Phung was also involved in coordinating the receipt of cryptos in exchange for pills and laundering those proceeds, while another key member of the gang identified as John Dang handled the packaging and laundering.

“Dang packaged pills for shipment and delivery and helped move and launder cryptocurrency. Dang laundered approximately $15,000 per month,” reads part of the court documents.

The volume of the drugs moved led to significant repercussions for all members involved in the drug cartel.

Deputy Criminal Chief Fredrick C. “Fritz” Shadley was the prosecutor in the case that marked a victory for law enforcers against criminal operations.

This comes as cases of money laundering and cybercrime involving digital assets have been on the increase as more people adopt them.

Recently a 21-year-old Indiana cybercriminal admitted to swindling over 500 individuals of $37 million worth of cryptocurrency in a 2022 cyber-attack.

In June this year, Costa Rica law enforcement agents arrested at least 36 individuals connected to a criminal gang involved in money laundering through cryptocurrencies. The criminal organization involved government officials and some law enforcement agents.