Anti-Money Laundering (AML), Cybercrime, Fraud Management and Cybercrime
Israeli man earned $8.4 million in bribes from DeepDotWeb referrals
Mathew J. Schwartz (euroinfosec) •
January 28, 2022
An Israeli has been sentenced to eight years in prison for running a darknet market search engine called DeepDotWeb.
Tal Prihar, 37, pleaded guilty to conspiracy to commit money laundering before U.S. District Judge Donetta Ambrose in March 2021. He had been sentenced to up to 20 years in prison.
Prihar was one of the administrators of the DeepDotWeb website. The portal provided direct links to a number of darknet markets, which are usually only accessible through the anonymizing Tor browser or an anonymous peer-to-peer distributed communication layer called I2P.
Authorities accused Prihar of owning and operating the website with Israeli citizen Michael Phan, 34. The United States is currently seeking Phan’s extradition from Israel.
U.S. Justice Department prosecutors say the portal helped shoppers buy “illegal firearms, malware and hacking tools, stolen financial data, heroin, fentanyl and more.” illegal materials”.
The portal has also listed the major markets along with their availability status.
“For six years, DeepDotWeb has been a gateway to facilitate the illegal purchase of items, including dangerous drugs, weapons and malware,” said Carlton Peeples, acting special agent in charge of the FBI field office in Pittsburgh.
For every purchase made by someone he referred, DeepDotWeb received bribes via virtual currency, including bitcoins. By the time DeepDotWeb was shut down in April 2019 when it was seized by the FBI, the bureau says the site had earned referral fees totaling 8,155 bitcoins, which were worth approximately $8.4 million at the time of the reports. transactions.
Authorities say the referral fees came from at least 15,000 portal users.
“To conceal the nature and source of these illegal bribes, Prihar transferred payments from his bitcoin DDW wallet to other bitcoin accounts and to bank accounts he controlled on behalf of shell companies,” he said. declared on US Department of Justice said.
As part of Prihar’s plea, he agreed to give up nearly $9 million in currency and assets.
Arrested in France
Prihar was arrested in May 2019 at Charles de Gaulle airport in Paris. Along with his arrest, Brazilian authorities, assisted by the FBI, executed a search warrant at the suspect’s home in Lago Sul, Brazil, where they recovered cryptocurrency along with $50,000 in cash.
At the time, Brazilian police said the suspect was already known to them, as he was also suspected of crimes related to child pornography and was the subject of a search and seizure warrant in this case in October. 2018, when police seized $1 million. cash as well as smartphones and physical documents.
The judge sets a sentence less than the recommended sentence
US sentencing guidelines recommended an 11-year prison sentence for Prihar. But Judge Donetta Ambrose instead gave him eight years and a month, based on the fact that he accepted responsibility and chose not to fight his extradition from France to the United States, Pennsylvania. Tribune-Review reported.
During his sentencing hearing on Tuesday, Prihar told the court that he did not initially know what he was doing was illegal, but after finding out he continued nonetheless due to “the seeking danger and greed,” the Tribune-Review reported. , noting that the accused has a wife and four children in Israel.
Prihar’s attorney, Michael Comber, told the court his client had been detained in the United States for 27 months now, the Tribune-Review reported.
Changes in the darknet market landscape
The darknet market ecosystem has continued to evolve since DeepDotWeb was operational, notably after the dismantling of AlphaBay in 2017 and the Wall Street market in 2019, although the Russian darknet market Hydra remains the largest market in the world. darknet in the world, according to experts.
But in the past year, many markets have closed, including carding market giant Joker’s Stash last January, the White House market in October 2021, the cannabis-focused darknet market Cannazon in November 2021 and the TorReZ market last month.
Blockchain analytics firm Elliptic says the reasons for exiting these markets are likely to be many, including operators who have made enough money to retire, or who believe the risk posed by law enforcement is now too big to be worth continuing.
In a report, Elliptical says Doing business is also getting harder as the US government continues to sanction cryptocurrency exchanges that don’t follow “know your customer” and anti-money laundering rules. “As regulation of cryptocurrency businesses such as exchanges has tightened, it has become increasingly difficult to launder these funds,” he says.