Silk Road profiteer Hugh Brian Haney was arrested by Homeland Security Investigations (HSI) in the US last week for allegedly laundering money illicitly obtained through drug trafficking.
The announcement was made by the United States Department of Justice (DOJ) on its website.
Haney, 60, was arrested near Columbus, Ohio on the belief that he had gained proceeds from trafficking narcotics on the controversial dark web site known as the ‘Silk Road’.
The Silk Road was a marketplace where illegal drugs and illicit goods were sold frequently by the site’s vendors and customers.
US attorney Geoffrey Berman said: “Working side by side with our law enforcement partners, our office has shut down the Silk Road, the secret online marketplace for illegal drugs, hacking services, and a whole host of other criminal activity.
“As alleged, Hugh Haney used the Silk Road as a means to sell drugs to people all over the world. Then he allegedly laundered his profits – more than $19 million – through cryptocurrency.
“Today’s arrest should be a warning to dealers peddling their drugs on the dark web that they cannot remain anonymous forever, especially when attempting to legitimatise their illicit proceeds.”
One prominent narcotics vendor on the Silk Road was known as ‘Pharmville’. During a judicially-authorised search of Haney’s house in 2018, HSI agents found evidence that Haney was a high-ranking member or administrator of Pharmville involved in large-scale narcotics trafficking.
In 2017 and 2018, Haney allegedly transferred Bitcoins representing narcotics proceeds he had earned through his control of Pharmville to an account held by a company involved in the exchange of Bitcoins and other cryptocurrencies.
In correspondence with this company, the DOJ has said Haney falsely claimed that he obtained the Bitcoins through his own personal mining endeavours and from “individuals [he] met online”.
The DOJ continued to claim that the Bitcoins were obtained through transfers from the Silk Road. After Haney transferred the Bitcoins into cash – worth more than $19 million – Homeland Security Investigations seized the money from a custodial account at a bank located in the Southern District of New York.
Haney is being charged with one count of concealment of money laundering, which carries a maximum sentence of 20 years in prison, and one count of engaging in a financial transaction in criminally-derived property, which carries a maximum sentence of 10 years in prison.
Interested in reading more Silk Road-related stories? Discover more about Roger Ver’s views on Ross Ulbricht, who is best known for creating and operating the Silk Road website.
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