Phantom Secure CEO, whose encrypted cellphone company catered to drug traffickers, pleads guilty
By Kristina Davis
The San Diego Union-Tribune
October 2, 2018
SAN DIEGO -- The CEO of a Canadian company that provided encrypted cellphone messaging services to criminal organizations around the world, allowing them to operate secretly on secure networks, pleaded guilty in San Diego federal court Tuesday to a racketeering conspiracy.
Phantom Secure, under the leadership of Vincent Ramos, earned some $80 million in profits over the past 10 years — an amount that he has agreed to forfeit as part of the plea agreement. Also on the forfeiture list are tens of millions of dollars in other assets, including cryptocurrency; property in British Columbia, Los Angeles and the Las Vegas area; gold and silver; a Land Rover and a Ferrari Cabriolet.
The devices the company sold were actually gutted Blackberries, with the usual abilities to make phone calls, take pictures and surf the web replaced with an untraceable text messaging system, according to court records. The messages were routed through encrypted servers in Hong Kong and Panama and further disguised by virtual proxy networks.
The FBI estimates some 20,000 such devices have been sold throughout the world — with about half of them being used by Australia’s underworld, according to officials there. Members of Mexico’s Sinaloa Cartel were also customers, authorities said.
As part of the plea, Ramos admitted to facilitating the importation, exportation and distribution of wholesale quantities of cocaine, heroin and methamphetamine throughout the world, including the U.S., Australia, Mexico, Canada, Thailand and Europe.
The investigation into Phantom Secure was truly a global effort, with law enforcement in the U.S., Canada, Australia, Hong Kong, Thailand and Panama coordinating on several fronts and in various undercover capacities to infiltrate the company.
To prevent law enforcement from getting their hands on the special phones, Phantom Secure required existing customers — referred to as “executives” — to vouch for new customers, then conducted background checks. The company’s safeguard didn’t always work.
One of the big breaks in the case came during the San Diego FBI investigation of Owen Hanson, a former University of Southern California football player who built a global gambling and drug-smuggling empire. An undercover agent who had gained Hanson’s trust at the tail end of the investigation was able to get a Phantom Secure phone of his own, according to court records, which do not name Hanson but include detailed descriptions of the case.
Another safeguard also failed. When Hanson was arrested, authorities say Phantom sent a signal to remotely erase data from his phone. But the signal did not reach in time, and the data was preserved.
In another undercover probe, several agents posing as high-level traffickers met with Ramos in Las Vegas in February 2017, explaining they were expanding into South America and Europe. They indicated they would need GPS tracking in case they had to locate cooperators to be killed, according to the complaint.
“Right, right, right, right,” Ramos responded, and later assured the devices cannot be hacked, the complaint says.
Ramos, 40, who lives in the Vancouver area, faces up to 20 years in prison. He has agreed to serve at least five years of his sentence in the U.S. before requesting to be transferred to Canadian authorities, according to his plea deal.
His co-defendants — Kim Augustus Rodd, Younes Nasri, Michael Gamboa and Christopher Poquiz — remain international fugitives.
Ramos’ guilty plea came the same morning as the last figure in the 23-defendant Hanson prosecution was sentenced.
In a nearby courtroom Tuesday morning, U.S. District Judge William Q. Hayes sentenced Luke Fairfield to 21 months in prison on a racketeering conspiracy charge.
Fairfield was Hanson’s accountant, helping him hide profits in various shell companies and instructing others how to structure deposits to avoid bank reporting requirements, according to his plea agreement.
Fairfield, whose office was in Old Town, thought the proceeds were from Hanson’s gambling operation and didn’t know of the drug empire. He was implicated when a former gambling “runner” left the organization and began cooperating with the FBI.
Assistant U.S. Attorney Andrew Young called him a “key member” of Hanson’s ODOG Enterprise.
The judge called Fairfield’s participation in the scheme “aggravated” because of the significant amount of money laundered, the use of his expertise and the four-year stretch of illegal activity.
Fairfield, who has since lost his CPA license, tearfully expressed “incredible remorse” for getting involved and said he “should have dropped Owen as a client” when he learned of the criminal nature of his business.
After pleading guilty in March 2017, he has cooperated in the investigation, even being cleared to fly to Australia to testify in prosecutions involving Hanson’s enterprise there.
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