Ohio man pleads guilty to laundering $19m in Bitcoin

Hugh Haney has pleaded guilty to charges of money laundering and transacting in criminally derived property following his role in infamous narcotics marketplace the Silk Road

A former narcotics trafficker has pleaded guilty to charges of laundering more than $19 million in Bitcoin through infamous dark web marketplace the Silk Road.

Hugh Brian Haney, of Ohio, was 60 years old at the time of his arrest.

According to a press release by the US Attorney’s Office for the Southern District of New York, Haney pleaded guilty to one count of concealment money laundering and one count of engaging in a financial transaction in criminally derived property. He faces up to 30 years in jail.

His arrest comes after his involvement with a large-scale narcotics distribution network operating on the Silk Road called ‘Pharmville’.

Haney had close ties to the criminal organisation behind the network, operating as an administrator for the vendor. Among other narcotics, Pharmville sold the deadly opiate fentanyl.

As reported by Coin Rivet, Haney was originally arrested and charged on July 18 by Homeland Security Investigations. After evading arrest for almost six years, Haney was caught while attempting to launder Bitcoin he had earned through the Silk Road, and his assets were seized once they had been converted to cash. He has remained in federal custody since.

The Bitcoin earned by Haney in his role as a Pharmville admin was sent to an undisclosed cryptocurrency exchange for transfer into fiat. The US Attorney’s Office stated:

“Haney falsely claimed that he had legitimately earned these Bitcoins through cryptographically creating them and from fair transfers with others, while in reality the Bitcoin was derived from transfers from the Silk Road.”

Haney is due to be sentenced on February 12, 2020.

Silk Road

The infamous Silk Road marketplace sold narcotics, weapons, drugs, hackers-for-hire, and other illicit goods on the dark web.

As cryptocurrencies were a new means of exchange and thought to be anonymous by many criminals at the time, they became the de facto way to pay for goods and services on the Silk Road.

The Silk Road was closed after an investigation by the FBI in October 2013, but not before a considerable amount of illegal material had been bought and sold there – mainly in exchange for Bitcoin.

It’s founder, 35-year-old American Ross Ulbricht, is currently serving a double life imprisonment sentence without the possibility of parole for 40 years.

Law enforcement has since found ways to trace Bitcoin transactions, largely due to the numerous investigations involving Silk Road sellers. Criminals are now exploiting privacy coins, such as Monero, in a new bid to evade detection.


Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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