DeepDotWeb Defendants Used Bitcoin to Hide Criminal Proceeds, Say Feds

U.S. authorities have formally charged the alleged moderators of DeepDotWeb, the dark web comparison and news site seized by the feds, with money laundering, taking illegal kickbacks and other crimes.

Prihar, who lived in Brazil, was taken in France while police arrested Phan in Israel.

TechCrunch posted the just-unsealed U.S. indictment Wednesday.

The authorities are calling DeepDotWeb's affiliate system a "Kickback" scheme, suggesting that the pair received cash for giving dark web exchanges more business.

The two also allegedly used bitcoin to hide their tracks, and the indictment's section on asset forfeiture says they had accounts at crypto exchanges OKCoin and Kraken and payment processor BitPay.

"To conceal and disguise the nature and source of the illegal proceeds, totaling over $15 million, Prihar and Phan transferred their illegal kickback payments from their DDW bitcoin wallet to other bitcoin accounts and to bank accounts they controlled in the names of shell companies," wrote prosecutors.

Notably, Prihar allegedly moved to Brazil, which has constitutional protection against extradition, though not for naturalized citizens.

In any event, an alleged DeepDotWeb moderator wrote, "Instead of arresting Prihar in Brazil, authorities arranged for his arrest in France where Prihar would land for a connecting flight between Israel and Brazil."

Further, Brazilian authorities allegedly found $200,000 in cash and "An undisclosed amount of various cryptocurrencies, including bitcoin." The form those currencies took is unclear.

Image of police approaching Prihar's home in Brazil via Medium.