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Darknet Dealer Launders Bitcoins Through Fed Wallets

June 7, 2019


May 30, 2019

A federal grand jury indicted Sean Shaughnessy, a 51-year-old Texan, with conspiracy to possess with intent to distribute controlled substances, including fentanyl; distribution of a controlled substance; and money laundering, He allegedly sold fentanyl on the Dark Web and laundered hundreds of thousands of dollars in bitcoin through bitcoin wallets controlled by federal law enforcement agents. The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; the IRS Criminal Investigation Division’s Los Angeles field office; and the United States Postal Inspection Service.

The ICE-HSI Announcement

An indictment against an accused darknet drug dealer, unsealed Friday, charges him with leveraging bitcoin’s apparent anonymity to sell fentanyl online.

This indictment was announced by U.S. Attorney for the Northern District of Texas Erin Nealy Cox. This case was investigated by:

A federal grand jury charged Sean Shaughnessy, a 51-year-old Texan, with:

U.S. Attorney Nealy Cox:

Darkweb dealers often believe that by using bitcoin, they can evade authorities. This prosecution proves that’s not the case. We will continue to pursue anyone peddling this deadly drug — on the streets or online.

According to the indictment, which was unsealed May 24 following the defendant’s initial appearance, Shaughnessy allegedly sold fentanyl and fentanyl analogues over the dark web. Shaughnessy’s buyers purchased the fentanyl and fentanyl analogues, which was shipped to their addresses, using cryptocurrencies like bitcoin, the indictment alleges.

Laundering Through the Feds

Shaughnessy allegedly laundered his bitcoin profits thtough other cryptocurrency wallets in exchange for regular fiat currency, which was finally shipped to his home in Dallas. But he also sent more than $120,000 in bitcoin to wallet addresses controlled by federal agents. Oops.

Source: ICE.gov


This case resembles the cases that stemmed from Homeland Security Investigation’s “Operation Dark Gold” wherein federal agents had taken control of a money launderer’s accounts, accepted bitcoin from prolific darkweb vendors, shipped paper currency to the vendors, and then used the information as evidence in cases against the vendors.


To Be Or Not Not to Be Confused with Another Opioid Case?

In March 2015, Sean Michael Shaughnessy—46-years-old the time—was arrested in North Carolina after Homeland Security Investigation and the United States Postal Inspection Service conducted a controlled delivery of a large shipment of heroin. Although the similarities between the two cases are abnormally high, they are likely unrelated.

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