A Maryland man is in jail for laundering around $139 million, equivalent to 2,933 Bitcoin (BTC). Ryan Farace, 37 years old and serving a 57-month prison sentence for selling drugs on the dark web, is accused by federal prosecutors of conspiring to launder money. At the same time, he was incarcerated between 2018 – 2020.
Farace was sentenced to 5 years in prison for securities fraud, with the sentence running until 2020. A judge has ordered Farace to forfeit 4,000 Bitcoin at his arrest. And an additional $5.6 million, which he must pay.
Farace was a drug dealer who used the alias Xanaxman to sell Alprazolam. An addictive sedative that has caused mass overdoses.
To evade law enforcement and launder his illicit profits, the drug dealer created over 920,000 counterfeit Xanax tablets. Using a capsule presser, he crushed Alprazolam pills before packaging them as imitation medication in China. He then laundered this money through Bitcoin transactions with another of his conspirators named Robert Swain.
“Engaging drug peddling and darknet markets was a risky affair for Farace. He used pseudonyms to contact co-conspirators to trade Bitcoin obtained from his drug trafficking for US money. Which would then be mail or ship out by the co-conspirator after receiving payment less than an agreed-upon price…”
In an attempt to hide profits from drug trafficking, Farace tried a variety of strategies. Throughout the conspiracy, he obtained a sum greater than $5 million through the mails exchanged for Bitcoin earned through his involvement in illegal drugs. In addition, Swain and Farace drove across state lines.
So that they might meet with someone who would provide them with $200,000 worth of cash in exchange for their Bitcoins. When this plan failed because they were unable to change any Bitcoin into physical currency on short notice. Due to insufficient funds or information about how much it would cost (i.e., no one was willing), both men attempted unsuccessfully again after meeting up at another location during February 16th, 2017
After being in jail for drug offenses, the Farace father-son continue with their tricks.
The new indictment alleges that Joseph and Michael Farace laundered funds from illegal operations between October 2019 – April 2021 while behind bars in jail.
The recently seized crypto belongings are unknown as to whether they were among the proceeds Farace was ordered to forfeit or had not been previously detected by the federal government.
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