DENVER – Two men from Colorado were sentenced to federal prison for buying and selling cocaine on the darknet using Bitcoin cryptocurrency to facilitate the transactions in the Denver metro area.
U.S. Attorney Jason R. Dunn, District of Colorado, announced the sentence. This case was investigated by the Denver Digital Currency and Darknet Working Group, comprised of agents from the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), U.S. Postal Inspection Service (USPIS), and the IRS-Criminal Investigations (IRS-CI). Other agencies assisting the working group included IRS-CI in Phoenix Arizona and USPIS and HSI in Nashville, Tennessee.
Timothy Howell, 46, was sentenced by U.S. District Court Judge William J. Martinez on November 22, 2019, to 51/2 years in prison and 4 years of supervised release for conspiracy to distribute cocaine, money laundering, and aggravated identity theft. Howell’s co-defendant, Cavin Mower, 44, was sentenced by Judge Martinez on September 5, 2019, to 4 years, 2 months in prison and 3 years of supervised release for conspiracy to distribute cocaine and money laundering.
For over a year, Howell and Mower received kilogram-quantities of cocaine from a darknet cocaine supplier and then re-sold that cocaine to their own customers in Colorado and across the country via their own darknet vendor account. Together, Howell and Mower shipped nearly 50 kilograms of cocaine to their customers through the U.S. Mail, for which they were paid in the cryptocurrency Bitcoin. In addition, during this criminal activity, Howell stole the identity of another person and used it to, among other things, gain access to a TSA-controlled area of an international airport to board a flight to Denver.
Howell and Mower laundered the Bitcoin proceeds in primarily two ways. First, they used a website that allowed them to purchase gift cards that could be used to buy goods and services. Second, they exchanged Bitcoin for cash using the services of an international money transfer company.
Howell and Mower were both arrested on July 19, 2018, and have been in custody.
“This case demonstrates that drug dealers can’t hide from the law, including on the darknet,” said U.S. Attorney Jason Dunn. “If you are, we will find you, prosecute you, and send you to federal prison.”
“Narcotics trafficking and money laundering through the dark web are an ever increasing method for criminal organizations,” said IRS special agent in charge Andy Tsui. “Special Agents with IRS-Criminal Investigation are highly adept at disrupting the illegal financial activities individuals try to conceal through the dark web and will continue to work diligently to stop these criminals in their cyber tracks.”
“Postal Inspectors, especially here in Colorado, have been at the forefront of dark web investigations for years, bringing to justice those who use the U.S. mail to distribute illegal narcotics behind the dark net’s false veil of anonymity,” said Bill Hedrick, inspector in charge of the Denver Division of the U.S. Postal Inspection Service. “This sentence is a result of the hard work from our Postal Inspectors to bring these drug dealers to justice,” said Hedrick.
The defendants were prosecuted by Assistant U.S. Attorney Andrea Surratt.