Defendants Manufactured and Shipped Controlled Substances to 43 States, Laundered $2.3M Using Bitcoin
Undercover Manhattan D.A. Investigation Yields Largest Pill Seizure in New Jersey History: Hundreds of Thousands of Counterfeit Xanax Tablets Recovered, plus Fentanyl-Laced Heroin, Methamphetamine, Ketamine, Alprazolam, Steroids, Pill Presses, and Cryptocurrency
Manhattan District Attorney Cyrus R. Vance, Jr., the U.S. Secret Service, the U.S. Postal Inspection Service (“USPIS”), and U.S. Homeland Security Investigations (“HSI”) today announced the indictment of Chester Anderson, 44, and co-conspirators Jarrette Codd, 41, and Ronald Maccarty, 51, for operating storefronts on the dark web that sold and shipped hundreds of thousands of counterfeit Xanax tablets and other controlled substances to buyers in 43 states, and laundering $2.3 million in cryptocurrency by using preloaded debit cards and withdrawing cash at ATMs in Manhattan and New Jersey.
Following a series of undercover purchases made in cryptocurrency by Manhattan DA investigators, investigators executing court-authorized search warrants on the defendants’ New Jersey properties and vehicles seized the largest quantity of pills in New Jersey State history, including approximately 420,000 to 620,000 alprazolam tablets, as well as approximately 500 glassines of fentanyl-laced heroin and quantities of methamphetamine, ketamine, gamma hydroxybutyric acid (GHB), and more. Investigators also recovered four pill presses and two industrial mixers, among other drug manufacturing items, and thousands of dollars’ worth of cryptocurrency.
The defendants are charged in a New York State Supreme Court indictment with Conspiracy in the Fourth and Fifth Degrees, as well as Money Laundering in the First Degree. Anderson is additionally charged with multiple counts of Criminal Sale of a Controlled Substance in the Fourth and Fifth Degrees, and Identity Theft in the First Degree. The Middlesex County Prosecutor’s Office is handling the prosecution of the items seized in New Jersey.
“When our office received reports of suspicious activity at ATMs in New York and New Jersey, our talented investigators followed the money, using our state-of-the-art Cyber Lab to uncover a dark web counterfeit pill seller whose $2.3 million operation spanned the U.S.,” said District Attorney Vance. “Not only is this the first time state prosecutors in New York have taken down a dark web storefront, this takedown represents the largest pill seizure in New Jersey’s history. If you are engaging in illicit activity on the dark web, you are on notice: we know how to find you, we know how to put you out of business, and we know how to hold you criminally accountable. If you would like to report crimes committed on the dark web or anywhere else, please call our Cyber hotline at 212-335-9600.”
Patrick Freaney, Assistant Special Agent in Charge, New York Field Office, U.S. Secret Service, said: “The Secret Service remains dedicated to vigorously investigating and pursuing those responsible for cyber related crimes. This case is an example of the tremendous community impact law enforcement can have through successful partnerships. The Secret Service looks forward to continuing our proven partnership with the Manhattan District Attorney’s Office in combatting the evolving cyber threat to our communities.”
Edward Gallashaw, USPIS Assistant Inspector in Charge, said: “Dark web operators should know when you make the US Mail a party to your illicit deeds, you bring not only Postal Inspectors but the full weight of law enforcement to stop you in your tracks from victimizing the public.”
According to the indictment and documents filed in court, Andersonoperated two dark web storefronts, using the screenname “sinmed,” to sell alprazolam and other controlled substances. CODD and Maccarty assisted with manufacturing and equipment procurement. Over the course of the conspiracy, undercover Manhattan D.A. investigators purchased approximately 10,000 alprazolam tablets, in addition to ketamine and GHB, from the sinmed storefronts. Additionally, the Manhattan D.A.’s Cybercrime and Identity Theft Bureau identified more than 1,000 packages that were shipped by the defendants from New Jersey to locations across the country, and seized an additional 8,000 tablets by intercepting several of the packages. Nearly all of the packages had return addresses that falsely identified the sender as a Manhattan business, including multiple Manhattan law firms and a real estate agency.
Anderson and Maccarty created a shell company, Next Level Research and Development, to purchase more than 1,000 kilograms of microcrystalline cellulose, the primary ingredient used to manufacture pharmaceutical tablets. They also used Maccarty’s cellphone repair store, The Wireless Spot, to purchase a pill press, a powder mixer, and “punch dies” used to imprint “Xanax” labels on alprazolam pills.
The defendants laundered more than $2.3 million in proceeds by using the cryptocurrency they received as payment to load pre-paid debit cards, and collectively withdrew more than $1 million from ATMs in Manhattan and New Jersey.
Assistant D.A.s Daniel Haier and Jessica Peck are handling the prosecution of the case under the supervision of Assistant D.A. Elizabeth Roper (Chief of the Cybercrime and Identity Theft Bureau), Assistant D.A. Jeremy Glickman (Deputy Chief of the Cybercrime and Identity Theft Bureau and Counsel to the Investigation Division) and Executive Assistant D.A. Michael Sachs (Chief of the Investigation Division). Supervising Rackets Investigator Gregory Dunlavey, former Special Investigator William Burmeister, High Technology Analysis Unit Deputy Director David Chan, and Analysts Jonathan Behnken, Catherine Wigdor, and Charles Fraker, assisted with the investigation.
