Defendant's sizable bitcoin transactions cited in drug defendant's bail denial order

US v. Le, Cr. №19–10199-RWZ ( D. Mass. filed Sept. 24, 2019) [NMR]

Link to order

This is an order on a motion challenging the pre-trial detention of a defendant in a criminal case. Yep, another criminal case of someone allegedly using crypto to conduct their criminal enterprise. Will criminals learn? Sure, I don’t know. Probably, not? I mean, these networks are all public ledgers. As in, the transactions are open. I mean... Okay, enough ranting. What’s going on here?

According to the criminal complaint Binh Thanh Le, Steven McCall, and Allante Pires were charged with conspiracy to manufacture, distribute, and possess with intent to distribute controlled substances such as MDMA, Ketamine, and Xanax. In particular, the government alleges “that the defendants, primarily operating out of an office space in Stoughton, MA, sold drugs via the Dark Web in exchange for Bitcoin, and shipped the drugs to customers using the United States Postal Service.”

Do people know that the US Postal Service has a law enforcement arm? It’s called the United States Postal Inspection Service, and I assure you that the Inspection Service is no joke. They have a particular focus on illegal narcotics and the dark web. To quote their website “[a]s part of this effort, the Inspection Service has developed tools to identify those who attempt to hide behind the secrecy of the dark web and cryptocurrency to misuse the postal network.” I mean, “these networks are all public ledgers. As in, the transactions are open. I mean…” Okay, I’m really done ranting now.

All three of the defendants were detained pre-trial. Each defendant filed motions to revoke their pre-trial detention. McCall and Pires’s pre-trial motions were granted. This order relates to Le’s motion to revoke his detention, that was ultimately denied. Why was Le’s motion denied and not his alleged co-conspirators?

According to the Court the “strength of the evidence against Le and his apparent role as the leader of this sophisticated conspiracy distinguish him from McCall and Pires.” Le is allegedly the ringleader, and the Court felt that Le was both a public safety risk, and a flight risk.

As to Le’s ringleader status, allegedly, everything is in Le’s name, he told an undercover cop that he had “people working for him,” he delegated tasks via text message, and the authorities found ammunition and drug residue outside the business address. That was sufficient to find Le a public safety risk.

Furthermore, the Court determined that Le was a flight risk, because Le “was arrested while attempting to exchange $200,000 worth of Bitcoin for U.S. currency and may have access to additional drug proceeds if released,” and allegedly there were drug shipments from Switzerland and Canada.

I guess the lesson here is that if you’re arrested on allegations of running a drug ring and you’ve got hundreds of thousands of dollars worth of bitcoin that you’re attempting to exchange for dirty fiat, and you have international contacts, the authorities are probably not going to let you out on bail.

Disclaimer: Crypto Caselaw Minute is provided for educational purposes only by Stephen Palley (@stephendpalley) and Nelson Rosario (@nelsonmrosario).  These summaries are not legal advice. They are our opinions only, aren’t authorized by any past, present or future client or employer. Also, we might change our minds. We contain multitudes.  As always, Rosario summaries are “NMR” and Palley summaries are “SDP”.