AlphaBay Vendor DailyFix Sentenced – From home in Vila Real de Trás-os-Montes, the couple Pedro and Rita set up a perfect (or almost) scheme to buy and sell drugs around the world. Pedro was computer literate and all the schematics and shortcuts of darkweb – the network of encrypted internet servers used primarily by criminal organizations – and Rita, a web designer, was the creator of the attractive pages promoting the sought after products.
For at least six months, according to what the investigating authorities have shown, they have attracted customers from all over the world: France, Germany, the United Kingdom, Sweden, the United States of America, Australia, Canada and the United Arab Emirates. among the dozens of countries where they sold hashish, cannabis and synthetic drugs.
The sophistication of the scheme and the profits achieved in such a short time surprised even the PJ inspectors and the prosecutors of the Central Bureau of Investigation and Criminal Action (DCIAP) responsible for the investigation. When they were arrested for international drug trafficking, they had more than 30,000 euros at home and darkweb’s accounts had amassed a “small” fortune in bitcoins, the virtual currency of the digital age – 64,28984671 bitcoins, which at the exchange rate At the time of writing this article reaches almost half a million euros.
They heard the sentence last week. Pedro, who took full responsibility for the scheme and freed Rita from a penalty, was sentenced, for aggravated trafficking and money laundering, to six years and four months in prison. The court ruled that all the money seized, including that deposited in bitcoins in various “accounts” on darkweb, went to the state. In addition to the high value at stake – the largest so far known in Portugal – it also represents a powerful blow and a serious warning to the criminal structures that use darkweb for their business.
“It was new to the investigation how they exchanged bitcoins in cash. It made a big impact on the small fortune achieved and the whole scheme of drug sales by darkweb, with bitcoin payments, and the mailing to almost all continents, “recalls one of the researchers who accompanied the complex plan.
Nickname Dailyfix and Encrypted Cautions
According to what was found in the DCIAP investigation, “surely from the middle of the first quarter of 2017”, Rita and Pedro “began to dedicate themselves, almost exclusively, to the import and sale of narcotic products through the use of the internet. , in particular the main darknet-based narcotics sales website / market called ALPHABAY Market “.
Pedro’s Acer computer “contained several computer programs for data encryption, public and private key management for message encryption, keepword software – Keepass words – as well as application and service access software on darkweb to purchase and sale of virtual currencies, shipping control and receipt of postal parcels.
Not to be easily detected, the computer engineer “surrounded himself with caution” and when he accessed darkweb, he did not do so through his computer, but through virtual machines he created that functioned like real virtual computers – from a program. / commercial software called Virtual Box – completely independent of the physical machine.
While browsing this darkweb, Pedro had the nickname (alias) Dailyfix, recognized only on the Alphabay Market website, the largest black market for drug sales on the Internet. In this “shop,” the couple advertised “a vast listing of the kind of drugs they had for sale and their prices”: hashish, cannabis, and various synthetic drugs, presented in crystals. They also announced the sale of stamps impregnated with psychotropic substances – the blotters.
While it is true that these products would also be bought through darknet, the authorities could not reach their suppliers, although they suspected that they were Spanish.
DailyFix’s reputation was at its highest level, authorities said when they infiltrated their cyber investigators on this dark internet. “The seller had a lot of positive comments about his sales, which made him very credible in that environment, that is, whenever a buyer bought a product from DailyFix it reached its destination”, is reported in the process.
In response to advertisements posted on the Internet, Pedro and Rita received drug orders from numerous customers via the Internet on sites where payment of the advertised price in euros is automatically made by reference to the bitcoin cryptocurrency.
The products were carefully placed in padded, vacuum-sealed envelopes, always camouflaged with other packaging, such as mobile phone cases, and mailed not only to domestic destinations but to any foreign country, whether within or outside Europe, notably France. , Germany, the United Kingdom, Sweden, the United States, Australia, Canada, Egypt, Russia, and the United Arab Emirates, among dozens of other countries.
In the search of his house, PJ picked up dozens of these letters ready to be sent and also seized several envelopes already within CTT’s milestones. “They printed the name of the consignee of the order in question and, instead of the one intended for the sender’s indication, the defendants put the names of addresses and installations of various companies used as a facade, namely: Erqolit Lda., Beauty Nails, Smartlink, 3DB , G-Techno and Regiamat, not to be identified by their true mailing address “, is described in the process.
When they were arrested, Pedro and Rita had credit cards that allow them to withdraw cash bitcoins from any ATM, as well as traditional cards from various banking institutions. From the computers, “it was possible to collect all the information from the DailyFix user of the Alphabay market, namely his presentation to the buyers informing that it was a team that sold from Portugal, and the risk of buying drugs was minimal, as the authorities did not control this. type of activity other than consumption is legal in the country “.
Once on the defendants’ account, the bitcoins paid by the narcotics buyers were themselves mixed by the darknet site itself with the bitcoins of other suspects, before being transferred by the couple to their personal accounts. “Thus, knowing that bitcoins, although anonymous, are traceable, they hoped defendants would never be detected,” the investigators stress.
The authorities have identified three schemes for this laundering:
1- The product was sold on darknet and paid in bitcoins. In those same markets, the bitcoins were mixed to avoid detection, however the defendants still passed them through a bitcointumbler / blender “, once again to hide their origin. Later, they transferred the bitcoins to a physical account on the Acer computer and thence to the defendants’ LocalBitcoins accounts, while LocalBitcoins, enjoying a high “reputation” from the successful businesses they were doing, sold bitcoins in a variety of ways, namely by receiving cash / euros by letter, bank transfers and cash in hand, thus obtaining the proceeds from trafficking properly “cleared” in cash.
2 – The main difference from the previous scheme is that the defendants use a website (Kraken) to convert bitcoins to cash without referring them directly to their bank accounts in Portugal. Instead, they transferred the euros from bitcoin sales to an account on the Leupay website, which was associated with a debit card that allowed them to spend their money anywhere, ie at any ATM they could withdraw euros or make payments. All of these sites are located abroad, with Leupay located in Malta, and since January 2016 and until his arrest in June 2017, the defendants charged their accounts with 50 246.10 euros.
3 – In this scheme used by the defendants, after passing the bitcoins through the tumblers of their own markets for selling narcotic products on darknet and the tumblers outside them but still on darknet, deposited those in the physical account of the Acer computer. Later, they transferred the bitcoins from the physical account of the Acer computer to an account on the Xapo site, which was associated with a debit card that allowed the amount of bitcoins present in the Xapo account to be spent directly, that is, by withdrawing or paying payments. expenses. By opting for this scheme, the defendants did not need to sell the bitcoins to third parties first, and could convert them directly to cash by simply using the debit card. Admittedly, the location of the Xapo financial entity is in Hong Kong, which allowed the defendants to avoid the alerts that could be generated by moving the amounts of bitcoins they intended to convert to currency.
Investigators’ searches of Finance data showed that Pedro did not submit any income to the tax administration from 2012 to 2017 and had a criminal advantage in the total amount of € 94 672.22 and 61,985681 bitcoins. Rita reported income between 2012 and 2015 in the IRS, being found as incongruous values and advantage of criminal activity a total of 51 406.87 euros, plus about three bitcoins (at Sunday’s rate, over 18 thousand euros ).