Encryption firm CEO guilty in drug case
The founder of a Vancouver encryption company that supplied untraceable BlackBerry devices to organized crime groups around the world has pleaded guilty to racketeering in California.
Phantom Secure CEO Vincent Ramos appeared before U.S. District Court Magistrate Barbara Lynn Major in a San Diego courtroom Tuesday and admitted to leading a criminal enterprise that facilitated international drug smuggling “through the sale and service of encrypted communications devices.”
In his plea deal, Ramos admitted that he and his associates helped distribute cocaine, heroin and methamphetamine to locations in Canada, the U.S., Australia, Mexico, Thailand and Europe.
Ramos, who lived with his family in Richmond, B.C., until his arrest earlier this year, maintained Phantom Secure servers in Panama and Hong Kong — hidden behind virtual proxy servers — and even remotely wiped devices seized by law enforcement. Some of his customers included members of the notorious Sinaloa cartel of Mexico, court documents said.
Ramos and his co-conspirators would sell devices to only those customers who had personal references from existing clients. And Ramos used digital currencies, including Bitcoin, to facilitate financial transactions for Phantom Secure to protect users’ anonymity and launder proceeds from Phantom Secure.
He admitted that at least 450 kilograms of cocaine were distributed using Phantom Secure devices. As part of his guilty plea, Ramos agreed to a US$80-million forfeiture judgment, as well as the forfeiture of tens of millions of dollars in identified assets, ranging from bank accounts worldwide, to houses, to a Lamborghini, to cryptocurrency accounts and gold coins. But the plea deal also said the U.S. would not seize two Lower Mainland properties, vehicles and bank accounts used by his family.
Ramos also agreed to forfeit the server licences and over 150 domains that were being used to operate the infrastructure of the Phantom Secure network, enabling it to send and receive encrypted messages for criminals.