Yahoo Finance Silk Road Seller Pleads Guilty to Money Laundering $19 Million With Bitcoin
A former narcotics trafficker pled guilty to charges that he laundered $19 million in profit through Silk Road.
Prosecutors with the Southern District of New York announced a plea deal with Hugh Brian Haney on Thursday, adding another postscript to the infamous dark web marketplace’s history. According to a press release, Haney was accused of laundering close to $20 million using bitcoin in early 2018.
Silk Road was among the dark web’s earliest drug marketplaces and a haven for its bitcoin-accepting vendors until its operator, Ross Ulbricht, was arrested in October 2013 and the site was shut down. Ulbricht is currently serving a life sentence on charges of narcotics distribution, computer hacking and conspiracy.
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Haney was one of the sellers who used the marketplace. According to the prosecutors, Haney was a “high-ranking member” of a narcotics outfit known as Pharmville, and is said to have received nearly 4,000 bitcoin from Silk Road-linked accounts through February 2012. According to the complaint, he trafficked in fentanyl, oxycontin and other narcotic sales.
“Hugh Haney used Silk Road as a means to sell drugs to people all over the world,” U.S. Attorney Geoffrey S. Berman said in a statement. “Then he laundered more than $19 million in profits through cryptocurrency.”
He was caught after liquidating his remaining bitcoins on an exchange for $19,147,053 in January and February 2018. The unnamed company froze his account and launched an internal investigation that ultimately led to a search warrant. Haney was arrested in July 2019.
Initially, Haney claimed his bitcoin came from a mining operation. But investigators used “blockchain analysis software” to show the funds came from Silk Road, according to the July complaint.
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According to his plea deal, Haney pled guilty to one count of concealing money laundering and one count of engaging in a financial transaction in criminally derived property. He is set to be sentenced in February 2020.
Handcuffs image via Shutterstock
