US accuses company CEO of selling crypto devices to drug traffickers
The US Department of Justice (DoJ) has ad an indictment against the head and associate of a Canada-based company allegedly providing personalized encrypted phones to international drug traffickers. In the second such case, CEO Jean-François Eap and former Sky Global distributor Thomas Herdman were charged with conspiring to violate the Racketeer Influenced and Corrupt Organizations Act (RICO). Arrest warrants have been issued for their arrests.
The RICO Act is typically used to fight organized crime and was previously used against another crypto phone company called Phantom Secure. Motherboard reports that the DoJ’s announcement follows a crackdown in Europe that saw local law enforcement obtain and decipher nearly a billion messages sent between Sky Global customers.
The indictment, returned by a federal grand jury on Friday, alleges that Sky Global installed sophisticated encryption software on devices designed to help drug traffickers escape police surveillance. Custom phones – which included the iPhone, Google Pixel, Blackberry, and Nokia phones – allowed their users to communicate with each other in a closed network, with Sky Global routing their activity through encrypted servers located in Canada and France.
Sky Global’s alleged aim was to facilitate an international drug trafficking operation involving the import and export of heroin, cocaine and methamphetamine. The narcotics have been distributed in the United States and Canada, Australia, Asia and Europe. While the encrypted communication system was also reportedly used to hide money laundering activities which included Bitcoin transactions on Sky Global’s website.
In order to hide their illicit business, Sky Global employees apparently set up shell companies to conceal the proceeds from the sale of their encrypted software. In total, around 70,000 custom devices are in use worldwide, according to the DoJ.
“The indictment alleges that Sky Global generated hundreds of millions of dollars by providing a service that allowed criminal networks around the world to hide their international drug trafficking activity from law enforcement,” he said. said acting US attorney Randy Grossman in A declaration. “This groundbreaking investigation should send a serious message to companies that think they can help criminals with their illegal activities.”