SAN DIEGO, U.S. – Vincent Ramos, the chief executive of Canada-based Phantom Secure, and four of his associates were indicted by a federal grand jury on March 15 on charges that they knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications.
This is the first time the U.S. government has targeted a company and its principals for knowingly and intentionally conspiring with criminal organizations by providing them with the technological tools to evade law enforcement and obstruct justice while committing transnational drug trafficking.
“With one American dying of a drug overdose every nine minutes, our great nation is suffering the deadliest drug epidemic in our history,” U.S. Attorney General Jeff Sessions said. “Incredibly, some have sought to profit off of this crisis, including by specifically taking advantage of encryption technologies to further criminal activity, and to obstruct, impede, and evade law enforcement, as this case illustrates. The Department of Justice will aggressively prosecute not just drug traffickers, but those who help them spread addiction and death in our communities. I want to thank the FBI, DEA, Customs and Border Protection, Homeland Security Investigations, Washington State Police, the Bellingham and Blaine Police Departments, and all of our law enforcement partners around the world, including Australia, Canada, Panama, Hong Kong, and Thailand for their hard work on this case. Today’s indictment sends a clear message that drug traffickers and criminals cannot hide, because we will hunt them down and find them wherever they are.”
“When criminals go dark, and law enforcement cannot monitor their phones or access evidence, crimes cannot be solved, criminals cannot be stopped and lives can be lost,” said U.S. Attorney Adam Braverman. “As a result of this groundbreaking prosecution, we will disable the communication infrastructure provided by a criminal enterprise to drug traffickers and other violent criminals. Phantom Secure was designed to profit off of criminal activity committed by transnational criminal organizations around the world. We are committed to shutting these criminals down.”
“The indictment of Vincent Ramos and his associates is a milestone against transnational crime,” said FBI Director Christopher Wray. “Phantom Secure allegedly provided a service designed to allow criminals the world over to evade law enforcement to traffic drugs and commit acts of violent crime without detection. Ramos and his company made millions off this criminal activity, and our takedown sends a serious message to those who exploit encryption to go dark on law enforcement. I want to thank our partners at the Department of Justice, as well as our Australian and Canadian law enforcement partners, for their incredible work on this case.”
“Hidden or undetected communication is key for any transnational organized crime network,” said John A. Brown, FBI Special Agent in Charge of the San Diego Field Office. “This case highlights how criminal enterprises, like Phantom Secure, knowingly provided advanced technology and encrypted private networks to transnational criminal operations in order to evade law enforcement. This break-through investigation has undoubtedly disrupted countless criminal organizations from operating their illegal and dangerous operations in the United States and abroad because their communications mechanism has been shut down. This indictment shows the impact law enforcement, working together across the globe, can have on transnational organized criminal groups. The San Diego Division of the FBI would like to recognize and thank our international law enforcement partners, who built this international case with exceptional and dedicated collaboration.”
Ramos was taken into custody in Bellingham, Washington, on March 7. Ramos made his first appearance in the Western District of Washington and will face charges in San Diego. The remaining four defendants are fugitives.
According to court documents, Phantom Secure advertised its products as impervious to decryption, wiretapping or legal third-party records requests. Phantom Secure also guaranteed the destruction of evidence contained within a device if it was compromised, either by an informant or because it fell into the hands of law enforcement. According to court documents, Phantom Secure’s clients used email handles like the following to conduct criminal activities:
The indictment alleges that as a result of its efforts to facilitate international crime, Phantom Secure has generated approximately $80 million in annual revenue since 2008 and facilitated drug trafficking, obstruction of justice, and violent crime around the world.
The international operation to arrest the company’s chief executive and seize Phantom Secure’s infrastructure involved cooperation and efforts by law enforcement authorities in the United States, Australia, Canada, with additional assistance from U.S. and foreign law enforcement in Panama, Hong Kong, and Thailand.
Over the past two weeks, in cooperation with Australian Federal Police and RCMP, more than 250 agents around the globe conducted approximately 25 searches of houses and offices of Phantom Secure associates in Los Angeles, Las Vegas, Miami, and in Australia and Canada, seizing Phantom Secure devices, assets, and evidence of the charged crimes. The coordinated effort led to the seizure of servers, computers, cell phones, and Phantom Secure devices used to operate the Phantom Secure network, as well as drugs and weapons.
Ramos and the others – Kim Augustus Rodd, Younes Nasri, Michael Gamboa and Christopher Poquiz – are charged with participating in and aiding and abetting a racketeering enterprise and conspiring to import and distribute controlled substances around the world. The defendants have been charged with Conspiracy to Commit RICO in violation of 18 U.S.C. § 1962 and Conspiracy to Aid and Abet the Distribution of Controlled Substances in violation of 21 U.S.C. § 841 and 846.
Authorities have seized Phantom Secure’s property, including more than 150 domains and licenses which were being used by transnational criminal organizations to send and receive encrypted messages. Authorities also seized bank accounts and property in Los Angeles, California and Las Vegas, Nevada.
This case stems from an investigation in the Southern District of California of a Phantom Secure client who used Phantom devices to coordinate shipments of thousands of kilograms of cocaine and other drugs throughout the globe. According to court documents, there were an estimated 10,000 to 20,000 Phantom devices in use worldwide before the authorities dismantled the company. This coordinated action means Phantom Secure’s clients can no longer use these devices to commit crimes.
According to Timothy O’Connor, Executive Director of the Criminal Investigations Division New South Wales Crime Commission, “The disruption of the Phantom Secure platform has been one of the most significant blows to organized crime in Australia.”
In addition to foreign law enforcement partners, the U.S. Attorney’s Office further recognized the support and assistance of the U.S. Drug Enforcement Administration; Customs and Border Protection; the Department of Homeland Security; Seattle and Las Vegas field office of the Federal Bureau of Investigation; the Washington State Police Department; the City of Bellingham, Washington Police Department; the City of Blaine, Washington Police Department; and the Canada Border Services Agency, among others, without whose help this prosecution could not have been possible.
Speaking on behalf of Australian law enforcement authorities, Australian Federal Police (AFP) Assistant Commissioner Organised Crime, Neil Gaughan said today Australia’s role in this complex and unique investigation began in early 2017 following an exchange of intelligence with the FBI and RCMP.
As a result, Australian authorities executed 19 search warrants across four states last week as part of the international action, where more than 1,000 encrypted mobile devices were seized.
“The action taken in the U.S. directly impacts the upper echelons of organized crime both here in Australia and offshore, who until now have been able to confidently control and direct illicit activity like drug importations, money laundering and associated serious criminal offending,” said Gaughan.
“Our thanks go to our international partners – the FBI and RCMP – who have been outstanding in working methodically around the clock together with us on this unique investigation. Without their cooperation, commitment and shared singular drive, Australian law enforcement agencies would not be announcing this significant result today.”
Australian agencies involved in this investigation include the Australian Criminal Intelligence Commission, the New South Wales Crime Commission, state police from New South Wales, Victoria, Queensland, South Australia and Western Australia, the Australian Tax Office and financial intelligence agency AUSTRAC.
“This investigation is a prime example of law enforcement agencies from around the world working together to identify, investigate and charge people involved in transnational criminal activity,” said Assistant Commissioner Jim Gresham, RCMP Criminal Operations Officer, Investigative Services and Organized Crime. “We remain committed to investigating and disrupting these illegal activities that adversely affect each of our communities.”
This case is the result of ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together the combined expertise and unique abilities of federal, state and local law enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking and money laundering organizations and enterprises.
Vincent Ramos (1) Richmond, British Columbia Canada
Kim Augustus Rodd (2) Phuket, Thailand
aka Visith Vongthai
Younes Nasri (3) Dubai, United Arab Emirates
Michael Gamboa (4) Los Angeles, CA
Christopher Poquiz (5) Los Angeles, CA
SUMMARY OF CHARGES
Racketeering Conspiracy to Conduct Enterprise Affairs (RICO Conspiracy), in violation of 18 USC §1962(d)
Maximum Penalty: Life in prison
Conspiracy to Aid and Abet the Distribution of Narcotics, in violation of 21 USC §841 and 846; Title 18 USC §2
Maximum Penalty: Life in prison
Federal Bureau of Investigation
Drug Enforcement Administration
Department of Justice, Office of International Affairs
Australian Federal Police
New South Wales Police (Australia)
New South Wales Crime Commission (Australia)
Australian Criminal Intelligence Commission
Royal Canadian Mounted Police
International Assistance Group, Department of Justice, Canada
*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.