Silk Road, the infamous darknet marketplace in which users offered and sold almost everything like counterfeit passports, illegal drugs, guns, hacking programs and dangerous chemicals – was seized in 2013. However that’s not the end of the tale.
Almost six years later, an ohio man was arrested for trying to launder more than $19 million worth of bitcoin he allegedly earned through drug deals on silk road market. The federal authorities alleges that hugh brian haney of columbus, ohio, was “involved in a large-scale narcotics trafficking on silk road” from 2011 and 2012 . Silk road was founded in 2011 by ross ulbricht when he was 26 years old. Ross, who operated the market under the pseudonym “dread pirate roberts,” later claimed he wanted to create a “free market, where users can buy and sell whatever they wanted without any restrictions”.
The silk road marketplace had more than $two hundred million in transactions using bitcoin, which allowed users to remain anonymous and untraceable at that time.
By the summer season of 2011, silk road had began to generate tremendous buzz online, and that was the time when the famous article on gawker magazine was posted that drew even more attention to them, which led to investigations by the justice deaprtment and DEA.
Silk Road was shut down in october 2013. Ross was sentenced to life in prison in 2015 after being found guilty.
It was estimated that several thousand drug dealers used silk road to sell drugs and other unlawful products to over more than 100k customers and laundered millions od dollars using bitcoins.
After the shutdown of silkroad, the feds seized a large amount of btc and later sold them for $48 million. The federal authorities say that Hugh Brian Haney was one of the users of Silk Road.
“As alleged, hugh brian haney used silk road as a means to sell drugs to people all around the globe. Then he allegedly laundered his profits of $19 million through bitcoins,” stated geoffrey s. Berman, the u. S. attorney professional for the southern district of new york. ”the arrest is a warning to all the sellers who are selling their drugs via the dark web that they can not stay anonymous for all time, especially when trying to legitimize their illegal proceeds.”
Hugh brian haney allegedly operated on silk road using the name “pharmville.”
The authorities alleges that between Nov-2011 and Feb-2012, Brian haney earned millions of dollars worth of btc from transactions related to unlawful narcotics, including ketamine , oxycontin and fentanyl.
Haney transferred his illegal cryptocurrency proceeds of $19. 15 million from those transactions to an unidentified bitcoin exchange in february 2018 , and exchanged the bitcoins for cash and deposited it in a personal bank account.
Haney informed the exchange corporation that he had earned the bitcoin through his very own “mining” of the cryptocurrency, according to Federal agents who seized that cash from haney’s bank account.
He is charged with one count of concealment of cash money laundering and engaging in a monetary transaction the using of illegally received funds. Convictions of these two carry maximum jail sentences of 20 years and 10 years respectively, according to the justice department.
Brian Haney’s preliminary court listening was held on july 30 in columbus ohio.
Haney pled guilty in Manhattan federal court on Nov 06-2019 to money laundering charges, based on his attempt to launder the proceeds of his drugs trafficking business that he operated on the Darknet market silk road.
Haney is scheduled to be sentenced by Judge Rakoff on Feb 12, 2020.
Full Statement By USAO can be found here.