Father and Son Duo Sentenced to Prison for Bitcoin Money Laundering Scheme



A father-son duo, residents of Maryland, have been sentenced for their involvement in a dark web drug trafficking and Bitcoin money laundering scheme.

Joseph Farace, aged 72, was sentenced to 19 months in federal prison on January 8 for aiding his son, Ryan Farace, aged 38, in the laundering of Bitcoin proceeds from illicit drug sales.

Bitcoin Laundering Scheme Unearthed in Maryland

A previously convicted felon, Ryan Farace, was sentenced to 54 months in federal prison, followed by two years of supervised release. The verdict was delivered by Judge Griggsby on January 5, 2023, at the U.S. District Court in Maryland.

The charges stemmed from his prior conviction in November 2018 for a scheme involving the manufacture and distribution of alprazolam tablets, commonly known as “Xanax,” through darknet marketplaces in exchange for Bitcoin.

The case was investigated by various law enforcement agencies, including the Drug Enforcement Administration, Internal Revenue Service – Criminal Investigation, and local police departments. Court documents revealed that Ryan Farace, known by the alias “XANAXMAN,” received over 9,138 Bitcoin from darknet marketplaces associated with his previous conviction.

In an attempt to recover drug proceeds, Ryan Farace cooperated with authorities before his sentencing for the 2018 crimes. However, post-sentencing, law enforcement managed to reclaim additional drug proceeds in the form of Bitcoin.

Despite claiming the inability to access any undisclosed Bitcoin related to his 2018 conviction, Ryan Farace, while incarcerated from October 2019 to April 2021, conspired with his father, Joseph Farace, and others to launder additional proceeds through various financial transactions.

The transactions included the transfer of Bitcoin to online exchanges and retailers, benefiting Joseph Farace. Using a contraband cell phone in prison, Ryan Farace communicated with his father, discussing purchases and transfers using encrypted email services.

Over 2,874 Bitcoin Seized in Scheme

In August 2020, Ryan Farace instructed Joseph Farace to transfer over 2,874 Bitcoin to a third party for international banking purposes, providing the wallet address via a coded message in a prison library book.

In September 2020, Joseph Farace completed the transfer of the specified Bitcoin to the third party, all of which were proceeds from Ryan Farace’s 2018 drug crimes.

Subsequently, federal agents seized the entire amount on February 10, 2021, with a market value ranging from $65 million to $150 million at the time of seizure.

An additional 58.7 Bitcoin, also linked to Ryan Farace’s drug trafficking, was seized on May 11, 2021. Ryan and Joseph Farace must forfeit all the Bitcoin seized during the investigation.

SPECIAL OFFER (Sponsored)

Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).



Source link

Leave a Comment