6 ms·

U.S. busts Tor drug market, arrests eight

66 points by cypherpunks01 15y ago

deleted 15y ago
[deleted]
rdl 15y ago
I'm curious how they attacked this network -- I'd assume the payment side is still the easiest, and they could look for some patterns and then set up physical surveillance at WU or other locations to catch cash transactions.
- TillE 15y ago
  > accepting payment through PayPal Uh. How did they expect to remain anonymous with a PayPal account?
  - plessthanpt05 15y ago
    hahaha...seriously? with PayPal? i suppose it could (maybe) be done with prepaid credit cards, but still.
    - rdl 15y ago
      Use forged documents for everything (including your bank accounts), and keep really small balances. Maybe also do business accounts, ideally also with forged info (particularly for US businesses, people don't check the documents very well). I assume PayPal does lazy checking, and will not check a low balance account as much. Linkability is the real enemy of anonymity.
  - BigTigger 15y ago
    When I first heard about this, I heard they anonymized their payments through bitcoins. PayPal seems a bit of a move to widen their market
    - kiba 15y ago
      No, that's the Silk Road.
  - deleted 15y ago
    [deleted]
cypherpunks01 15y ago
Wired Article: http://www.wired.com/threatlevel/2012/04/online-drug-market-takedown/ http://www.wired.com/threatlevel/2012/04/online-drug-market-... Cali DA press release: http://www.justice.gov/usao/cac/Pressroom/2012/045.html http://www.justice.gov/usao/cac/Pressroom/2012/045.html Full indictment (66 pg. pdf): http://www.wired.com/images_blogs/threatlevel/2012/04/WILLEMSIndictment-FILED.045.pdf http://www.wired.com/images_blogs/threatlevel/2012/04/WILLEM...
drivebyacct2 15y ago
No way, "high-end marijuana". Crazy. Extremely dangerous!
- api 15y ago
  It's dangerous to compete with state-protected real drug cartels. In all seriousness... does anyone think the present-day prohibition racket isn't just as corrupt as what was going on in the 1920s? Drug Enforcement Agency... who do you think they're enforcing for? It's almost impossible that it wouldn't be that corrupt. There is just too much freaking money involved, the stakes too high, for massive numbers of people to not be on the take.
  - watty 15y ago
    State-protected real drug cartels and prohibition rackets... can you expand? These drugs aren't just illegal here, are similar drug cartels running countries around the world?
    - api 15y ago
      They don't "run countries," but there is massive corruption. Prohibition is basically a price-fixing scheme, and makes illegal drugs obscenely profitable. Years ago I knew a friend who got into it, and he made over $20,000 in one weekend by simply driving a car across the border once. (He ended up getting in trouble unfortunately, though he's much better now and no longer involved.) If a person is willing to put up with the risk, there are few more profitable businesses. I've heard recent figures around $400 billion per year globally. So you've probably got cartels that were they legitimate businesses would be on the Fortune 500. With profits like that, large-scale operations have a lot of money to throw around to bribe cops, judges, government officials, etc. So as a result, the large cartels end up with a privileged position. Smaller operations that cannot afford to have such people on their payroll get targeted preferentially. Look into the history of bootlegging in Chicago in the 20s. It's the same kind of thing. The horrible thing about prohibition is that it's such a potent force for institutional corruption. The naiveté of the soccer moms that support it is disgusting. They all need to be beaten with a reality stick.
pjscott 15y ago
That's a shame. These guys' lives are going to be seriously messed up by this, and from the drug list, it looks like they were selling fairly ethical stuff; according to the article, they sold "LSD, ecstasy, fentanyl, mescaline ketamine, DMT and high-end marijuana".
- llambda 15y ago
  > it looks like they were selling fairly ethical stuff; according to the article, they sold "LSD, ecstasy, fentanyl, mescaline ketamine, DMT and high-end marijuana" "Fentanyl is approximately 100 times more potent than morphine, with 100 micrograms of fentanyl approximately equivalent to 10 mg of morphine and 75 mg of pethidine (meperidine) in analgesic activity."[1] [1] http://en.wikipedia.org/wiki/Fentanyl http://en.wikipedia.org/wiki/Fentanyl
  - pjscott 15y ago
    Okay, that's an exception. Scary stuff. (My sympathy is still with the guys running this service, but my estimate of their virtue went down.)
- Retric 15y ago
  Ecstasy is horribly nasty stuff. People rarely OD, but it can vary quickly do significant and permanent brain damage with heavy use. The real problem is when the symptoms show up they are basically permanent. Honestly, prolonged heroin use is significantly less harmful, the only good thing about ecstasy is the unpleasant side effects and fairly long high limit how much people take.
  - deleted 15y ago
    [deleted]
  - knotty66 15y ago
    MDMA (if that is what you mean, as street 'Ecstasy' can contain any number of other ingredients) is by most metrics one of the safer recreational drugs out there. https://en.wikipedia.org/wiki/File:Rational_scale_to_assess_the_harm_of_drugs_(mean_physical_harm_and_mean_dependence).svg https://en.wikipedia.org/wiki/File:Rational_scale_to_assess_... http://www.bbc.co.uk/news/uk-11660210 http://www.bbc.co.uk/news/uk-11660210
milesskorpen 15y ago
5,200 orders valued, in total, at $1M. Over a ~2 year period. That's it? Hardly seems like much of a story. Particularly since Tor is of limited use when your system depends on electronic payment systems.
- BigTigger 15y ago
  I believe they were using bitcoins to anonymize some transactions. The hardest thing for a regular consumer I would think would be finding a drop point. Drugs and things sent through the mail would be fairly easy to track to a consumer who could then be charged for possession.
  - rorrr 15y ago
    > Drugs and things sent through the mail would be fairly easy to track to a consumer Yeah, how?
    - simcop2387 15y ago
      Assuming they found them in the mail during transit using xray or some other method since they were in canada, shipping to US goes through customs which has special rules allowing that, then they can look at who is receiving the package and then they get them to squeal on who the dealer was.
      - rorrr 15y ago
        I don't think they x-ray every single package, that's just impossible, and who would look at all the x-rays. So even if they do it, 1) your chances of getting caught are extremely low 2) i don't think you're liable for receiving a package (though you may be for keeping and not reporting it).
        simcop2387 15y ago
        Yea it's certainly a complicated situation for both you and the police to figure out. The problem is I don't think I'd trust them to not try to strong arm you into confessing and saying who it was, assuming you did order them even if they couldn't prove it.
xal 15y ago
8x life in prison for $1M in drug trafficking?
- tibbon 15y ago
  Costing society probably $100K/yr/each to imprison them.
  - ajays 15y ago
    Nope. It costs close to $30K/year to imprison somebody in the US. So make that $250K/year to imprison this sorry bunch.
    - GFKjunior 15y ago
      In California it was $50,000 for the 08-09 year. But if you read the footnote it states "since 2000-01, the average annual cost has increased by about $19,500." Almost a $20 thousand increase in 8 years, I'd hate to see what it is now or worse in another 7 years. We have to add in the cost of Correctional Officer salaries and the Wardens who can easily make over $220,000 a year. http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/6_cj_inmatecost.aspx?catid=3 http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/...
    - iwwr 15y ago
      Don't forget the opportunity losses. These people could have contributed to society and the economy further.
- taligent 15y ago
  That's maximum life in prison.
aviv 15y ago
If these guys were using e-gold or some other alternative payment system, the Feds would raid the currency operator's offices as well and seize servers (as they have done in the past). Not so with PayPal and Western Union (I'm not disagreeing with the lack of such action).
thinkdevcode 15y ago
So were they actually selling the drugs or were they just operating a marketplace similar to Silk Road? Also, why the hell would they use PayPal?! At least SR uses bitcoins.
loverobots 15y ago
Looks like Hushmail was their weak point. Feds got court order from Canada based on treaty and it flowed from there. But yeah, between advertising, shipping, getting paid and moving money around it's hard to stay anon .
- cookiecaper 15y ago
  I never understand why people have such a fundamentally difficult time grasping the concept of plaintext and/or subpoenas. If someone knows enough to trade drugs on Tor, they definitely should be using strong encryption on anything and everything pertaining to it, including email. Month after month handfuls of new stories come out about someone outed and/or owned by emails or other plaintext communication that was not encrypted or cryptographically signed. You'd think it'd sink through after a while. You have no reasonable expectation of security for anything that is not fully encrypted with vetted, real-world strong encryption. While you may want something to stay under wraps, you're just leaving it there for the taking unless it is stored on permanent storage only in encrypted form.
  - rorrr 15y ago
    My theory is that only idiots get caught. If you read the article, it was a tiny operation considering the global illegal drug market. They only sold $1M worth of drugs in three years, that's silly. They didn't catch some big fish criminals, they caught some idiot kids who thought they could easily make money.
    - Blunt 15y ago
      "My theory is that only idiots get caught" No, only idiots do this to begin with.
      - reustle 15y ago
        As much as I agree, do you realize how big the active drug trade is? There are a lot of very smart people out there.
duaneb 15y ago
Why on earth would an online drug marketplace use traceable currency? Silk road got it right using BC.
donniezazen 15y ago
Reuters.com pulled it off.
joshu 15y ago
Web page is dead. Was this silk road? I've been meaning to scrape prices from there as a pet economics project.
- jmtame 15y ago
  No, the project was called The Farmer's Market. While it operated on Tor, they accepted payments over PayPal which completely breaks the anonymity chain. Silk Road is still operational and uses other security mechanisms (in addition to a decentralized, digital anonymous currency) to further anonymize transactions, running all payments through a tumbler.
  - joshu 15y ago
    Someone should write up a tour guide to the deep dark web. I doubly wish I was indexing silkroad's prices, so we could see the price impact this event has.
- waterhouse 15y ago
  Looks like this is a working link: http://www.reuters.com/article/2012/04/17/net-us-usa-drugs-internet-idUSBRE83G01Q20120417 http://www.reuters.com/article/2012/04/17/net-us-usa-drugs-i... The new url has "net-" in it.
  - cypherpunks01 15y ago
    It doesn't appear that I can edit the URL anymore :(
deleted 15y ago
[deleted]
redthrowaway 15y ago
When I saw the title, I immediately assumed it was Silk Road. That would have surprised me, as the operators have no part in the actual business, and all trades are conducted with bitcoins. If Silk Road went down, that would be news, as they really embrace strong crypto and opsec.

66 points by cypherpunks01 15y ago

deleted 15y ago

[deleted]

rdl 15y ago

I'm curious how they attacked this network -- I'd assume the payment side is still the easiest, and they could look for some patterns and then set up physical surveillance at WU or other locations to catch cash transactions.

TillE 15y ago
> accepting payment through PayPal Uh. How did they expect to remain anonymous with a PayPal account?
- plessthanpt05 15y ago
  hahaha...seriously? with PayPal? i suppose it could (maybe) be done with prepaid credit cards, but still.
  - rdl 15y ago
    Use forged documents for everything (including your bank accounts), and keep really small balances. Maybe also do business accounts, ideally also with forged info (particularly for US businesses, people don't check the documents very well). I assume PayPal does lazy checking, and will not check a low balance account as much. Linkability is the real enemy of anonymity.
- BigTigger 15y ago
  When I first heard about this, I heard they anonymized their payments through bitcoins. PayPal seems a bit of a move to widen their market
  - kiba 15y ago
    No, that's the Silk Road.
- deleted 15y ago
  [deleted]

cypherpunks01 15y ago

Wired Article: http://www.wired.com/threatlevel/2012/04/online-drug-market-takedown/ http://www.wired.com/threatlevel/2012/04/online-drug-market-... Cali DA press release: http://www.justice.gov/usao/cac/Pressroom/2012/045.html http://www.justice.gov/usao/cac/Pressroom/2012/045.html Full indictment (66 pg. pdf): http://www.wired.com/images_blogs/threatlevel/2012/04/WILLEMSIndictment-FILED.045.pdf http://www.wired.com/images_blogs/threatlevel/2012/04/WILLEM...

drivebyacct2 15y ago

No way, "high-end marijuana". Crazy. Extremely dangerous!

api 15y ago
It's dangerous to compete with state-protected real drug cartels. In all seriousness... does anyone think the present-day prohibition racket isn't just as corrupt as what was going on in the 1920s? Drug Enforcement Agency... who do you think they're enforcing for? It's almost impossible that it wouldn't be that corrupt. There is just too much freaking money involved, the stakes too high, for massive numbers of people to not be on the take.
- watty 15y ago
  State-protected real drug cartels and prohibition rackets... can you expand? These drugs aren't just illegal here, are similar drug cartels running countries around the world?
  - api 15y ago
    They don't "run countries," but there is massive corruption. Prohibition is basically a price-fixing scheme, and makes illegal drugs obscenely profitable. Years ago I knew a friend who got into it, and he made over $20,000 in one weekend by simply driving a car across the border once. (He ended up getting in trouble unfortunately, though he's much better now and no longer involved.) If a person is willing to put up with the risk, there are few more profitable businesses. I've heard recent figures around $400 billion per year globally. So you've probably got cartels that were they legitimate businesses would be on the Fortune 500. With profits like that, large-scale operations have a lot of money to throw around to bribe cops, judges, government officials, etc. So as a result, the large cartels end up with a privileged position. Smaller operations that cannot afford to have such people on their payroll get targeted preferentially. Look into the history of bootlegging in Chicago in the 20s. It's the same kind of thing. The horrible thing about prohibition is that it's such a potent force for institutional corruption. The naiveté of the soccer moms that support it is disgusting. They all need to be beaten with a reality stick.

pjscott 15y ago

That's a shame. These guys' lives are going to be seriously messed up by this, and from the drug list, it looks like they were selling fairly ethical stuff; according to the article, they sold "LSD, ecstasy, fentanyl, mescaline ketamine, DMT and high-end marijuana".

llambda 15y ago
> it looks like they were selling fairly ethical stuff; according to the article, they sold "LSD, ecstasy, fentanyl, mescaline ketamine, DMT and high-end marijuana" "Fentanyl is approximately 100 times more potent than morphine, with 100 micrograms of fentanyl approximately equivalent to 10 mg of morphine and 75 mg of pethidine (meperidine) in analgesic activity."[1] [1] http://en.wikipedia.org/wiki/Fentanyl http://en.wikipedia.org/wiki/Fentanyl
- pjscott 15y ago
  Okay, that's an exception. Scary stuff. (My sympathy is still with the guys running this service, but my estimate of their virtue went down.)
Retric 15y ago
Ecstasy is horribly nasty stuff. People rarely OD, but it can vary quickly do significant and permanent brain damage with heavy use. The real problem is when the symptoms show up they are basically permanent. Honestly, prolonged heroin use is significantly less harmful, the only good thing about ecstasy is the unpleasant side effects and fairly long high limit how much people take.
- deleted 15y ago
  [deleted]
- knotty66 15y ago
  MDMA (if that is what you mean, as street 'Ecstasy' can contain any number of other ingredients) is by most metrics one of the safer recreational drugs out there. https://en.wikipedia.org/wiki/File:Rational_scale_to_assess_the_harm_of_drugs_(mean_physical_harm_and_mean_dependence).svg https://en.wikipedia.org/wiki/File:Rational_scale_to_assess_... http://www.bbc.co.uk/news/uk-11660210 http://www.bbc.co.uk/news/uk-11660210

milesskorpen 15y ago

5,200 orders valued, in total, at $1M. Over a ~2 year period. That's it? Hardly seems like much of a story. Particularly since Tor is of limited use when your system depends on electronic payment systems.

BigTigger 15y ago
I believe they were using bitcoins to anonymize some transactions. The hardest thing for a regular consumer I would think would be finding a drop point. Drugs and things sent through the mail would be fairly easy to track to a consumer who could then be charged for possession.
- rorrr 15y ago
  > Drugs and things sent through the mail would be fairly easy to track to a consumer Yeah, how?
  - simcop2387 15y ago
    Assuming they found them in the mail during transit using xray or some other method since they were in canada, shipping to US goes through customs which has special rules allowing that, then they can look at who is receiving the package and then they get them to squeal on who the dealer was.
    - rorrr 15y ago
      I don't think they x-ray every single package, that's just impossible, and who would look at all the x-rays. So even if they do it, 1) your chances of getting caught are extremely low 2) i don't think you're liable for receiving a package (though you may be for keeping and not reporting it).
      - simcop2387 15y ago
        Yea it's certainly a complicated situation for both you and the police to figure out. The problem is I don't think I'd trust them to not try to strong arm you into confessing and saying who it was, assuming you did order them even if they couldn't prove it.

xal 15y ago

8x life in prison for $1M in drug trafficking?

tibbon 15y ago
Costing society probably $100K/yr/each to imprison them.
- ajays 15y ago
  Nope. It costs close to $30K/year to imprison somebody in the US. So make that $250K/year to imprison this sorry bunch.
  - GFKjunior 15y ago
    In California it was $50,000 for the 08-09 year. But if you read the footnote it states "since 2000-01, the average annual cost has increased by about $19,500." Almost a $20 thousand increase in 8 years, I'd hate to see what it is now or worse in another 7 years. We have to add in the cost of Correctional Officer salaries and the Wardens who can easily make over $220,000 a year. http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/6_cj_inmatecost.aspx?catid=3 http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/...
  - iwwr 15y ago
    Don't forget the opportunity losses. These people could have contributed to society and the economy further.
taligent 15y ago
That's maximum life in prison.

aviv 15y ago

If these guys were using e-gold or some other alternative payment system, the Feds would raid the currency operator's offices as well and seize servers (as they have done in the past). Not so with PayPal and Western Union (I'm not disagreeing with the lack of such action).

thinkdevcode 15y ago

So were they actually selling the drugs or were they just operating a marketplace similar to Silk Road? Also, why the hell would they use PayPal?! At least SR uses bitcoins.

loverobots 15y ago

Looks like Hushmail was their weak point. Feds got court order from Canada based on treaty and it flowed from there. But yeah, between advertising, shipping, getting paid and moving money around it's hard to stay anon .

cookiecaper 15y ago
I never understand why people have such a fundamentally difficult time grasping the concept of plaintext and/or subpoenas. If someone knows enough to trade drugs on Tor, they definitely should be using strong encryption on anything and everything pertaining to it, including email. Month after month handfuls of new stories come out about someone outed and/or owned by emails or other plaintext communication that was not encrypted or cryptographically signed. You'd think it'd sink through after a while. You have no reasonable expectation of security for anything that is not fully encrypted with vetted, real-world strong encryption. While you may want something to stay under wraps, you're just leaving it there for the taking unless it is stored on permanent storage only in encrypted form.
- rorrr 15y ago
  My theory is that only idiots get caught. If you read the article, it was a tiny operation considering the global illegal drug market. They only sold $1M worth of drugs in three years, that's silly. They didn't catch some big fish criminals, they caught some idiot kids who thought they could easily make money.
  - Blunt 15y ago
    "My theory is that only idiots get caught" No, only idiots do this to begin with.
    - reustle 15y ago
      As much as I agree, do you realize how big the active drug trade is? There are a lot of very smart people out there.

duaneb 15y ago

Why on earth would an online drug marketplace use traceable currency? Silk road got it right using BC.

donniezazen 15y ago

Reuters.com pulled it off.

joshu 15y ago

Web page is dead. Was this silk road? I've been meaning to scrape prices from there as a pet economics project.

jmtame 15y ago
No, the project was called The Farmer's Market. While it operated on Tor, they accepted payments over PayPal which completely breaks the anonymity chain. Silk Road is still operational and uses other security mechanisms (in addition to a decentralized, digital anonymous currency) to further anonymize transactions, running all payments through a tumbler.
- joshu 15y ago
  Someone should write up a tour guide to the deep dark web. I doubly wish I was indexing silkroad's prices, so we could see the price impact this event has.
waterhouse 15y ago
Looks like this is a working link: http://www.reuters.com/article/2012/04/17/net-us-usa-drugs-internet-idUSBRE83G01Q20120417 http://www.reuters.com/article/2012/04/17/net-us-usa-drugs-i... The new url has "net-" in it.
- cypherpunks01 15y ago
  It doesn't appear that I can edit the URL anymore :(

deleted 15y ago

[deleted]

redthrowaway 15y ago

When I saw the title, I immediately assumed it was Silk Road. That would have surprised me, as the operators have no part in the actual business, and all trades are conducted with bitcoins. If Silk Road went down, that would be news, as they really embrace strong crypto and opsec.