Darknet Fentanyl Dealer Indicted for Selling Deadly Drug for Bitcoin

A darknet drug dealer has been indicted for leveraging bitcoin’s apparent anonymity to sell fentanyl online, announced U.S. Attorney for the Northern District of Texas Erin Nealy Cox.

A federal grand jury charged Sean Shaughnessy, 51, with conspiracy to possess with intent to distribute controlled substances, distribution of a controlled substance, distribution of a controlled substance analogue, and eight counts of money laundering.  Today, he waived his detention hearing, and will remain in custody until trial.

“Darknet dealers often believe that by using bitcoin, they can evade authorities. This prosecution proves that’s not the case,” said U.S. Attorney Nealy Cox. “We will continue to pursue anyone peddling this deadly drug – on the streets or online.”

“Our significant domestic and international HSI resources and expertise, along with the considerable resources of our law enforcement partners, provided an unbeatable team to investigate this fentanyl smuggling operation so that we could effect this indictment,” said Katherine Greer, Acting Special Agent in Charge of Homeland Security Investigations’ Dallas field office.  “This deadly drug —combined with the secrecy of bitcoin currency — represent a significant danger to an already-devastating national opioid epidemic.”

According to the indictment, which was unsealed on Friday following the defendant’s initial appearance, Mr. Shaughnessy allegedly sold fentanyl and fentanyl analogues over the dark web, an unindexed portion of the internet accessible only via specialized software that allows users to conduct transactions with relative anonymity.

His buyers purchased the fentanyl and fentanyl analogues, which was shipped to their addresses, using cryptocurrencies like bitcoin, the indictment alleges.

One user, who allegedly purchased a fentanyl analogue from Mr. Shaughnessy, overdosed on the substance and died.

Mr. Shaughnessy allegedly transferred his bitcoin proceeds to other cryptocurrency wallets in exchange for regular fiat currency, which was shipped to his home in Dallas. Unbeknownst to Mr. Shaughnessy however, he sent more than $120,000 in bitcoin to wallet addresses controlled by federal agents.

An indictment is a formal accusation of criminal conduct, not evidence, and the defendant is presumed innocent until proven guilty in a court of law.

If convicted, Mr. Shaughnessy faces up to 20 years in federal prison on each of his 11 charges.

Fentanyl and its analogues – among the most lethal opioids used in the United States, according to the Drug Enforcement Administration – are partly responsible for the sharp increase in opioid deaths across the nation. In just three years, the fentanyl death toll rose more than 5,000 percent, from around 5,500 in 2014 to almost 30,000 in 2017, according to the National Institute of Health. Just a few milligrams, equivalent to a few grains of table salt, may be deadly.

Homeland Security Investigations’ Dallas field office, the IRS - Criminal Investigation Division’s Los Angeles field office, and the U.S. Postal Inspection Service conducted the investigation. Assistant U.S. Attorney Sid Mody is prosecuting the case, with the assistance of the Justice Department’s Money Laundering and Asset Recovery Section.