Inside AlphaBay's World of Drugs, Guns and Hacking Tools
Two so-called "dark Web" sites dedicated to illegal drug and arms sales have been seized in an audacious sting operation, and the suspected ringleader has committed suicide, U.S. Justice Department officials said Thursday.
Canadian Alexandre Cazes, 25, who was suspected of creating an illegal online marketplace called AlphaBay, was arrested by Thai authorities earlier this month.
He committed suicide by hanging while in custody July 12, said Lauren Horwood, spokeswoman for the U.S. Attorney's Office Eastern District of California.
Cazes had been charged in connection with running the black market site that Horwood called "much bigger" than Silk Road, a notorious dark Web marketplace seized by law enforcement in 2013.
European and American law enforcement authorities conducted an elaborate operation designed to fool AlphaBay users into revealing themselves.
The investigators shut down AlphaBay in a manner deliberately crafted to look like a heist. They hoped users would think that the site's administrator had absconded with their money and disappeared -- a common hazard on the dark Web -- and that they would take their business elsewhere.
In particular, investigators hoped that as news of the shutdown filtered through hacker sites and Web news sources, AlphaBay customers would switch to using another large and notorious black-market site called Hansa -- now in the secret control of Dutch National Police.
When AlphaBay's contraband business started turning up on Hansa, Dutch police were lying in wait. They used Hansa as a front for collecting evidence for a couple of weeks before it too was shut down.
"When I first heard about this, I thought, 'Oh, you guys have read too many novels,'" said Horwood. "But then it worked."
Cazes had been indicted on racketeering, narcotics and identity-theft related charges. Federal prosecutors Wednesday filed a civil forfeiture complaint against Cazes and his wife's assets.
These include a BMW motorcycle, a Lamborghini Aventador sportscar, condos and homes around the world, as well as a hotel in Thailand.
Cazes also had millions of dollars in cryptocurrency, which has been seized by federal authorities.
Criminal complaints in South Carolina and Florida have also been filed against suspected AlphaBay vendors, Horwood said. More complaints are likely to follow as investigators follow leads related to business conducted on the two sites, she said.
AlphaBay was accessed using Tor -- a browser popular among activists, dissidents, journalists and others who seek to hide their identities online. The site made use of the cryptocurrencies Bitcoin, Monero and Ethereum. It was chiefly used for illegal narcotics sales, said Horwood, although it also served purveyors of illegal weapons, and identity thieves. Stolen credit card numbers, hacking tools and toxic chemicals, for example, were among the goods being sold.
AlphaBay provided users with ways to mask transfers of digital currency payments, according to the federal indictment naming Cazes. But otherwise, it functioned much like Ebay or other e-commerce sites.
Users had accounts. They were able to search items by popularity. They could provide positive and negative feedback about vendors, the indictment said. AlphaBay even employed a public relations manager, the indictment alleged.
The indictment said that AlphaBay's members and associates included residents of Merced and Fresno counties.
In a release, Justice Department officials said that AlphaBay has been connected to drug overdoses. It said an AlphaBay staff member had once claimed that the site served 40,000 vendors and more than 200,000 users.
The release quoted Atty. Gen. Jeff Sessions calling the bust "likely one of the most important criminal investigations of the year" and stating, "The dark net is not a place to hide."
In addition to Europol, Dutch and Thai police, Lithuanian, Canadian, French and British authorities also took part in the operation. In the United States, Drug Enforcement Agency, FBI and IRS investigators also participated.
The case against Cazes was filed in the Eastern District California because federal authorities with dark Web expertise happen to be concentrated there, said Horwood.
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