Everyone knows a story about a kingpin in a criminal enterprise.
In the past, we have seen real-life examples like Pablo Escobar, or a TV character like Walter White, who have accumulated massive wealth through their illegal efforts. So much wealth that they end up burning a portion of their money or burying it underground because they can't possibly spend it all.
With all of that money, typically tons of cash, every kingpin needs someone who can launder their "earnings."
But a lot of examples of these criminal masterminds are from the past. Escobar reigned in the 80s when the internet was a just a crazy thought in the back of someone's mind. Crime has changed with the times and adapted to modern technologies.
So how would someone in 2021 go about their illegal business and launder money that is mostly transferred through the Dark Web?
Bitcoin launderer arrested in Los Angeles
In the last couple years, criminal enterprises and hackers alike have used the Dark Web as a tool for buying and selling various illegal things. It's an effective way to try to hide from the government and carry out their operations without having to leave their desk.
As Bitcoin has grown in value, more and more people are using it as a payment method; you can even buy a Tesla with Bitcoin. And with the staggering rise in ransomware attacks in 2020 and 2021, most hackers demand ransom payment to be made in Bitcoin or another cryptocurrency.
So, enter Roman Sterlingov, a 32-year-old Russian-Swedish national, who was recently arrested at Los Angeles International Airport. Prosecutors are charging him for his alleged operation of a major Bitcoin money laundering service on the Dark Web called Bitcoin Fog.
The U.S. Department of Justice (DOJ) describes his crimes like this:
"Bitcoin Fog was the longest-running cryptocurrency 'mixer,' gaining notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement. Over the course of its decade-long operation, Bitcoin Fog moved over 1.2 million bitcoin —valued at approximately $335 million at the time of the transactions. The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer fraud and abuse activities, and identity theft."
Those are some pretty crazy, real-life crimes that Sterlingov committed—like something straight out of a movie.
A decade worth of profits from laundering Bitcoin
According to Finance Feeds, Bitcoin Fog was found exclusively on the Dark Web and required registration to open an account. Sterlingov made money off each transaction.
"Federal prosecutors believe Sterlingov took in around $8 million in BTC for his services, getting around a 2% fee per mix on Bitcoin Fog.
According to the complaint, Mr. Sterlingov founded Bitcoin Fog in 2011 under the pseudonym Akemashite Omedetou, who advertised on BitcoinTalk that his service '[mixes] up your bitcoins in our own pool with other users' and 'can eliminate any chance of finding your payments and making it impossible to prove any connection between a deposit and a withdraw inside our service.'"
He is charged by complaint with money laundering, operating an unlicensed money transmitting business, and money transmission without a license.