Drug dealers on the dark web selling ketamine, MDMA and counterfeit Xanax in every state in America. An identity thief who hacks into his targets’ cell phones. A member of an Eastern European organized crime syndicate.
These, prosecutors said, were just some of the clients of Thomas Spieker, a former party producer charged Thursday by the Manhattan state court for laundering more than $2.3 million in Bitcoin for criminals around the world from 2018 to 2021. .
Prosecutors described Mr Spieker, 42, as a virtual Bitcoin ATM, which exchanges cash for cryptocurrency. In addition to the $2.3 million in Bitcoin he was charged with money laundering, he was accused of converting more than $380,000 in cryptocurrency into cash.
Mr. Spieker was charged with several counts of money laundering and unauthorized transfer of money. He pleaded not guilty and was released on his own admission. His attorney, Richard Verchick, declined to comment.
At his expense were:
Zashan Khan, 30, and Cosmas Siekierski, 25, of Manhattan, who, according to prosecutors, were selling illegal drugs through the dark web, an area of the Internet where illegal activities thrive and also only accessible through special software. An online store the two operated, OVO sweatshop, got its name from rapper Drake’s record label, October’s Very Own.
Anderson LaRoc, 33, of Brooklyn, who, according to prosecutors, had targeted 30 victims in an identity theft scheme.
Dustin Sites, 33, of Brooklyn, who according to prosecutors helped Mr. Spieker by opening bank and cryptocurrency accounts to launder money.
John Humphrey and Fidello Palermo of Rochester, NY, both 51, who prosecutors said were taking over the OVO sweatshop operation, who were apprehended on a trip to Brooklyn and found with 1.7 pounds of powder and crystalline ketamine and 140 clear vials of liquid ketamine.
All six pleaded not guilty and were released on their own admission.
“This sprawling web of international money laundering has helped drug traffickers, an organized crime ring and con artists hide their criminal activities and distribute their proceeds around the world,” Manhattan District Attorney Alvin Bragg said in a statement.
Mr. Spieker, who once worked in stocks at the investment bank Goldman Sachs, has been a Bitcoin enthusiast since the currency’s inception. In 2014, he was the subject of a Vice article highlighting his work as a DJ under the name S!CK.
Mr. Spieker said in the article that he had used Bitcoin investments to fund a regular dance party in Brooklyn. He claims on his LinkedIn page that he has produced parties with the rapper A$AP Rocky, the group Death Grips and the DJs Araabmuzik and DJ Rashad.
At some point, Mr. Spieker seems to have moved from music genres like dubstep and witch house to various ventures. In a 2018 Facebook post, according to prosecutors, he advertised his money laundering services, presenting them as being to potential customers who wanted to “STAY COMPLETELY OFF THE RADAR.”
From March 2018 to June 2020, Mr. Spieker, in collaboration with Mr. Sites and others, 29 bank accounts and eight cryptocurrency exchange accounts, prosecutors said. His compensation ranged from 4 to 12 percent of the money laundered.
Spieker’s most prominent client, whom he described as his “whale customer,” was the Eastern European member of organized crime, prosecutors said. Mr. Spieker laundered $620,000 for the client, they said.
A guide to cryptocurrencies
Mr Spieker is also accused of laundering more than $267,000 for the operator of a Nigeria-based “romance scam” which used the name Mark Kindly. Mr Friendly, 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 ordered to pay his captors. The woman gave Mr. Spieker and Mr. Sites more than $200,000, prosecutors said.
There were signs that Mr. Spieker was worried about getting caught. His Google search history revealed, according to the indictment, searches for “bitcoin money laundering” and articles about people convicted of Bitcoin money laundering.
There have been several notable cases of Bitcoin money laundering in New York this year. This month, a 47-year-old man in Manhattan pleaded guilty to drug trafficking, money laundering and conspiracy to sell drugs over the dark web and launder his cryptocurrency earnings. The man, Chester Anderson, operated two digital storefronts that he used to sell 10,000 tablets of generic Xanax, as well as ketamine and GHB to sell undercover investigators to the Manhattan District Attorney.
Last month, federal prosecutors charged a married couple, Ilya Lichtenstein, 34, and Heather Morgan, 31, of conspiracy to launder billions of dollars in Bitcoin. Like Mr. Spieker, Mrs. Morgan was involved in music; she made satirical rap songs under the name Razzlekhan.
Lananh Nguyen reporting contributed.