Thomas Daniels
In a landmark case illustrating the intricate nature of cybercrime, a father-son pair from Maryland have been adjudged guilty for their pivotal roles in an elaborate dark web drug distribution network and an intricate Bitcoin money laundering venture.
Seventy-two-year-old Joseph Farace faced a 19-month sentence in federal custody on January 8 for aiding his son, 38-year-old Ryan Farace, in the laundering of Bitcoin proceeds derived from illicit drug transactions. According to court records, between November 2013 and June 2017, Ryan Farace spearheaded a profitable dark web scheme, accruing over 9,138 Bitcoins through illegal drug sales.
In a bold move in 2020, Ryan Farace, while incarcerated, managed to transfer over 2,874 Bitcoins to an overseas bank account. He cleverly used a book from the prison library to communicate the Bitcoin address to his father.
Despite their efforts, federal detectives successfully thwarted these schemes. By February 2021, they had confiscated all the transferred Bitcoins, accumulating an additional 58.7 Bitcoins in May 2021. As part of his plea deal, Ryan Farace agreed to relinquish 2,957.9 Bitcoins recovered during the probe.
For his persistent illicit undertakings even while in prison, Ryan Farace received an extra 54-month federal prison term on January 5. Post Joseph Farace’s 19-month imprisonment, he is slated for two years of supervised release.
Crypto-based money laundering has been under the spotlight recently, especially in the wake of escalating global tensions post the Ukraine conflict, raising concerns among regulatory bodies about cryptocurrencies being used to evade sanctions. Just last month, U.S. senators, with Elizabeth Warren at the forefront, expanded bipartisan support for the Digital Asset Anti-Money Laundering Act, aiming to regulate cryptocurrency transactions.
Notably, high-profile incidents in this arena are frequent. A notable instance in early December 2023 involved Anatoly Legkodymov, Russian co-founder of crypto exchange Bitzlato, admitting guilt in money laundering charges. Nevertheless, most crypto-related inquiries in the U.S. are centered around tax issues, not money laundering.
Data from early December 2023 indicates that almost half of the crypto investigations in the U.S. are tax-related, with the Internal Revenue Service playing a significant role in the prosecution leading to the indictment of Changpeng Zhao, the former CEO of Binance.
