Crypto used in alleged $5.4 million drug conspiracy case
Cryptocurrency including Bitcoin was allegedly used to launder more than $5.35 million for a drug trafficking organization in a conspiracy that included the reported distribution of counterfeit pharmaceutical pills and other controlled substances.
John Khuu, 27, of San Francisco, California, was indicted on money laundering conspiracy charges by a federal grand jury, the Justice Department said in a release Friday (October 7). The indictment handed down by U.S. Magistrate John D. Love alleged that Khuu and others conspired to launder drug-trafficking proceeds through cryptocurrency.
Using the dark web as a marketing portal, Khuu is accused of distributing fake prescription pills and other controlled substances to people across the country, according to the statement.
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Customers typically paid for their purchases using Bitcoin or other cryptos, making transfers from their customer accounts on the dark web to one of Khuu’s vendor accounts, according to the allegations.
“Khuu and his co-conspirators traded Bitcoin for US currency and laundered the proceeds through hundreds of transactions and dozens of financial accounts,” according to the DOJ statement.
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Khuu was indicted May 18 by a federal grand jury in Texas on charges of conspiracy to commit money laundering.
He was also indicted by a federal grand jury in the Northern District of California on August 17 on two counts of unlawful possession of a controlled substance. On August 19, he was arrested on a warrant in California.
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If convicted on all counts, Khuu faces up to 20 years in federal prison on each charge.
This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation, according to the release.
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