The U.S. Justice Department has arrested 35 suspects selling illegal drugs and marijuana on the dartnet including a San Luis Obispo county cannabis delivery service owner, according to a news release.
Federal agents posed as money launderers on “darknet market sites” and were able to infiltrate the criminal enterprises, resulting in the seizure of “massive amounts” of narcotics, 100 firearms, $20 million in cryptocurrencies, and $3.6 million in bills and gold bars. The 35 individuals arrested are awaiting prosecution.
On May 17, a federal grand jury returned an 11-count indictment against Daniel Boyd McMonegal, 35, of San Luis Obispo charging him with drug distribution and money laundering.
According to the indictment, McMonegal, using the online monikers “Sawgrass,” “Ross4Less,” and “ChristmasTree,” distributed marijuana on various dark web marketplaces, including Dream Market.
McMonegal is the owner of a San Luis Obispo marijuana delivery service called West Coast Organix, which claimed to be a non-profit medical marijuana cooperative located at 712 Fiero Lane near the San Luis Obispo airport.
McMonegal then laundered the Bitcoin proceeds of his drug distribution through an undercover agent located in New York. After receiving the Bitcoin from McMonegal, the undercover agent mailed parcels of cash to McMonegal in San Luis Obispo and Mariposa.
The extensive federal operation, which culminated in four weeks of more than 100 enforcement actions around the country, resulted in the following:
Federal arrests of more than 35 Darknet vendors who engaged in tens of thousands of sales of illicit goods;
- Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
- Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
- Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
- Seizure of more than $3.6 million in U.S. currency and gold bars;
- Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million;
- Confiscation of 15 pill presses, which are used to create illegal synthetic opioids; and
- Seizure of Bitcoin mining devices, computer equipment, and vacuum sealers.
On Tuesday, the Department of Justice, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), the U.S. Secret Service, the U.S. Postal Inspection Service and the U.S. Drug Enforcement Administration, announced the results of a year-long, coordinated national operation that used the first nationwide undercover action to target vendors of illicit goods on the darknet.
“The darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” said HSI Executive Associate Director Benner. “The veil has been lifted. HSI has infiltrated the darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.”