Trafficked heroin and other drugs using virtual currency
Indianapolis - Josh J. Minkler, United States Attorney for the Southern District of Indiana, announced today the indictment of a Camby, Indiana, man for federal charges of drug trafficking and money laundering. Lee D. Gray, 40, used the alias “Supremesmoke" to sell narcotics over underground websites on the Deep Web.
“Heroin dealers cannot use the Internet to hide their illegal activity any longer," said Minkler. “Our investigators have some of the most innovative technology available to make certain our cyber world remains safe from drug trafficking."
Beginning in June 2014, Gray is alleged to have used an underground website known as Black Bank, to sell quantities of heroin and then use bitcoins, as virtual currency for payment. Black Bank was designed to facilitate illegal commerce by masking the identity of its users and is not accessible through traditional search engines. Gray allegedly offered heroin in gram quantities and accepted bitcoins as payment.
Gray’s seller page used the alias, “Supremesmoke" on Black Bank and featured photos of drugs such as heroin and cocaine. The potential customer chose the quantity and type of drug they wanted and placed an order transferring bitcoins to Gray’s account. A typical order of.5 grams of heroin cost approximately $100 to $125 and did not include shipping. Gray typically offered express shipping for $25 to $30 in addition to free first class shipping. He used the U.S. Postal Service, Priority Express Mail parcels and standard sized envelopes. Gray often labeled the parcels with Indianapolis-area return addresses for businesses that had no connection to him, in order to disguise the true origin of the delivery.
Gray maintained multiple bank accounts under his name, his wife’s name and various businesses. Through these accounts, he received wires from foreign companies that offered bitcoin exchange services. Gray also allegedly exchanged some of the bitcoins he received from selling heroin for U.S. dollars by transferring bitcoins to others in exchange for their sending him cash or the equivalent in the mail.
This case is being investigated by the Drug Enforcement Administration, United States Postal Inspection Service, Internal Revenue Service Criminal Investigation, Metro Drug Task Force, Lawrence Police Department, and the Indiana State Police.
“The U.S. Postal Inspection Service takes very seriously its mission to deter the illegal use of the mails for any criminal activity," said Postal Inspector in Charge, E.C. Woodson. “These crimes negatively impact each and every community and household, and we stand committed to working together to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail thereby violating the sanctity of the seal.
Drug Enforcement Administration Assistant Special Agent in Charge Greg Westfall stated, “With the rise of heroin overdoses and deaths, the DEA remains committed to investigating those involved in heroin trafficking as a priority. The DEA appreciates the collaborative efforts from all its law enforcement partners."
“When IRS Criminal Investigation gets involved, the drug dealer’s profits go up in smoke," said IRS Criminal Investigation Special Agent Stephen Boyd. “IRS CI plays a unique role in targeting the profit and financial gains of narcotics traffickers on many levels. As a team, law enforcement will continue to pursue criminals operating in the cyber world and trace their illegal proceeds in the form of virtual currency."
According to Assistant United States Attorneys Cindy J. Cho and MaryAnn T. Mindrum, who are prosecuting this case for the government, Gray faces up to 20 years in prison on each count if convicted.
Source: U.S. Department of Justice, Office of the United States Attorneys
