Web money

Ex-Party Producer Charged With $2.7M Bitcoin Laundering Scheme

Dark web drug dealers selling counterfeit Ketamine, MDMA and Xanax in every US state. An identity thief hacks his targets’ cell phones. Member of an Eastern European organized crime syndicate.

These, prosecutors said, were just some of the clients of Thomas Spieker, a former party producer who was charged Thursday in Manhattan state court with laundering more than 2.3 million dollars in Bitcoin for criminals around the world from 2018 to 2021.

Prosecutors described Mr. Spieker, 42, as a virtual Bitcoin ATM, exchanging cash for cryptocurrency. In addition to the $2.3 million in bitcoins he was charged with laundering, he was accused of converting over $380,000 in cryptocurrency into cash.

Mr. Spieker has been charged with several counts of money laundering and money transmission without a license. He pleaded not guilty and was released on his own recognizance. His attorney, Richard Verchick, declined to comment.

Charged with him were:

  • Zashan Khan, 30, and Cosmas Siekierski, 25, of Manhattan, who prosecutors say sold illegal drugs on the dark web, a part of the internet where illegal activity thrives and can only be accessed via special software. An online store the two operated, OVO sweatshop, takes its name from rapper Drake’s label, October’s Very Own.

  • Anderson LaRoc, 33, of Brooklyn, who prosecutors say targeted 30 victims in an impersonation scheme.

  • Dustin Sites, 33, of Brooklyn, who prosecutors say helped Mr. Spieker by opening bank and cryptocurrency accounts to help launder money.

  • John Humphrey and Fidello Palermo of Rochester, NY, both 51, who prosecutors say took over the operation of the OVO sweatshop, and who were arrested on a trip to Brooklyn and found with 1.7 kilograms of powder and crystalline ketamine and 140 transparent vials of liquid ketamine.

All six pleaded not guilty and were released on their own recognizance.

“This sprawling international money laundering network has helped drug traffickers, an organized crime network and con artists hide their criminal activity and funnel their profits around the world,” said Alvin Bragg, the district attorney. of Manhattan, in a statement.

Mr. Spieker, who previously worked in the shares of investment bank Goldman Sachs, has been a bitcoin enthusiast since the currency’s early days. In 2014, he was the subject of a vice article which showcased his work as a DJ working under the name S!CK.

Mr. Spieker said in the article that he used Bitcoin investments to fund a regular dance party in Brooklyn. He claims on his LinkedIn page that he produced parties featuring rapper A$AP Rocky, the band Death Grips, and DJs Araabmuzik and DJ Rashad.

At some point, Mr. Spieker seems to have moved from musical genres like dubstep and witch house to different ventures. In a 2018 Facebook post, prosecutors say, he advertised his money laundering services, presenting them as being aimed at potential clients who wanted to “STAY COMPLETELY OFF THE RADAR.”

From March 2018 to June 2020, Mr. Spieker, in conjunction with Mr. Sites and others, opened 29 bank accounts and eight cryptocurrency exchange accounts, prosecutors said. His fees ranged from 4 to 12% of the money laundered.

Mr Spieker’s most important client, whom he described as his “whale client”, was the Eastern European organized crime member, prosecutors said. Mr. Spieker laundered $620,000 for the client, they said.

Mr Spieker is also accused of laundering more than $267,000 for the Nigeria-based “romance scam” operator who used the name Mark Kindly. Mr. Kindly, prosecutors said, persuaded a nurse he met on a New York dating site to send him money under various false pretenses, including that he was being held in a Dubai prison and had to pay his captors. The woman gave Mr. Spieker and Mr. Sites more than $200,000, prosecutors said.

There were signs that Mr. Spieker feared being caught. His Google search history, according to the indictment, revealed searches for “Bitcoin money laundering” and articles about people who had been convicted of Bitcoin money laundering.

There have been several notable cases of Bitcoin laundering in New York this year. This month, a 47-year-old man pleaded guilty in Manhattan to drug trafficking, money laundering and conspiracy to sell drugs on the dark web and launder his cryptocurrency earnings. The man, Chester Anderson, operated two digital storefronts which he used to sell 10,000 generic Xanax pills, as well as ketamine and GHB to infiltrate Manhattan District Attorney investigators.

Last month, federal prosecutors charged a married couple, Ilya Lichtenstein, 34, and Heather Morgan, 31, with conspiracy to launder billions of dollars in Bitcoin. Like Mr. Spieker, Ms. Morgan dabbled in music; she made satirical rap songs as Razzlekhan.

Lananh Nguyen contributed report.