Feds Bust CEO Of Company Providing Ultra-Secure BlackBerries To Sinaloa Drug Cartel

The owner of a business providing ultra-secure BlackBerries to the Sinaloa drug cartel and other organizations has been arrested following a multi-agency law enforcement operation, according to an Affidavit filed in the Southern District of California located in San Diego. 

Working in conjunction with Canadian and Australian authorities on an operation dating back to at least 2015, authorities raided the business and home of Vincent Ramos, 41 - founder and CEO of Canada-based Phantom Secure, who is charged with racketeering conspiracy to conduct enterprise affairs, conspiracy to distribute narcotics, and aiding and abetting the cartel. Ramos sold over 20,000 phones worldwide, mostly to "the upper echelon members of various transnational criminal organizations." In fact, investigators were unable to identify "even a single legitimate Phantom Secure user." 

A second source also familiar with the secure phone industry told Motherboard that the devices have been sold in Mexico, Cuba, and Venezuela, as well as to the Hells Angels gang. -Motherboard.com

Ramos appeared in a Seattle Federal Court on Thursday and was ordered detailed pending his transfer to San Diego where he will stand trial. 

According to the heavily redacted filing written by FBI Special Agent Nicholas Cheviron, the encrypted phones "were specifically designed to prevent law enforcement from intercepting and monitoring communication on the network," by disabling key functionalities which can be used for tracking and surveillance. Phantom Secure - founded over a decade ago, guaranteed clients that if their BlackBerry is captured by law enforcement or otherwise compromised, they will remotely wipe its memory.

During the sting operation, undercover Canada's Royal Canadian Mounted Police (RCMP) posed as drug traffickers, where they asked Phantom Secure to delete the contents of an associate's device after "learning" he was arrested:

"when Phantom Secure receives the Blackberry handsets, its technical team removes the hardware and software responsible for all external architecture, including voice communication, microphone, GPS navigation, camera, Internet, and Messenger service," reads the Affidavit.  

"Phantom Secure then installs "Pretty Good Privacy" (PGP) encryption software and "Advanced Encryption Standard" (AES) on top of an email program, which it routes through encrypted servers located in countries, such as Panama and Hong Kong, believed by Phantom Secure to be uncooperative with law enforcement.

The company then masked the location of its servers containing the encryption keys and email through "multiple layers of virtual proxy networks." 

Saudi Arabia notably banned the use of BlackBerry phones in 2010 due to their already robust encryption due to the fact that they couldn't perform surveillance thanks to the phone's encryption capabilities. 

Because the phone encrypts email and BBM messages and sends them through RIM's own servers in Canada, rather than the network operator's own servers, there's no way for the government to force the operator to hand over some kinds of conversations made using the phone. -CNET

Similarly, Phantom Secure used their own encryption software routed through servers under their control.

In order to do business with Ramos, a new customer would require an existing customer to refer and vouch for them. Each phone also requires a $4,000 - $6,000 per year subscription to communicate through Phantom Secure's encrypted network. Ramos funneled profits from device and service sales through various shell companies, and used cryptocurrency such as Bitcoin to "launder its ill-gotten gains and maintain its members' anonymity." 

“We made it—we made it specifically for this [drug trafficking] too,” Ramos told undercover agents, according to a transcript included in the court filing.

User names of cartel members obtained by investigators included the phrases "Leadslinger," "the.cartel," "trigger-happy," and "knee_capper9." 

At one point, the Australian Federal Police began surreptitiously using a Phantom Secure BlackBerry seized from an Australian national arrested for drug smuggling. Authorities communicated with an unknown individual with Los Angeles, where they set up a deal for 16 kilograms of cocaine. 

As part of its investigation into Ramos and Phantom Secure, the FBI has at least one cooperating witnessa convicted transnational drug trafficker from the Sinaloa cartel—according to the complaint. This unnamed witness, along with someone named Marc Emerson who was alleged to be involved in the drug trafficking before dying due to an overdose in June 2017, were customers of Phantom Secure, and used the company’s devices to conduct their transnational drug trafficking activity, the complaint adds. This is where the aiding and abetting charge comes in—the cooperating witness allegedly used a Phantom device while organizing the transit of five kilograms of cocaine. -Motherboard.com

Comments

HenryKissinger… cheka Mon, 03/12/2018 - 06:19 Permalink

so business with privacy interests/concerns should KNOW and count on the NSA spying on each and every device...

US competitors can/may be helped by the NSA with your confidential info...

if your phone/device is not a PGP blackberry or phantom secure similar device then you are hacked by TPTB. Chat accordingly.

that is a dead sentence for the cloud : why would banks or any big company with US competitors trust the NSA with their confidential info???

In reply to by cheka

ZeroSpam lloll Sun, 03/11/2018 - 23:55 Permalink

^^^   lloll  <<< CHRONIC  years-long SPAMMER     ^^^

His "disguised" links  (Graphic Images) will take you to his Trojan- and Spam-laden "Whacked Out Biblicism" webpage.   He also posts as  "stizazz" and has been banned countless times for more than five years with countless log-ons.

 

Copy and paste the following text and send to abuse@zerohedge.com

"BAN and REMOVE spam accounts  "lloll"  and   "stizazz"   who are more log-ons from CHRONIC Spammers that ZH has been banning for years (that's you, too,  biblicism  &  dailywesterner)"

 

In reply to by lloll

JohannSennefelder lloll Mon, 03/12/2018 - 00:27 Permalink

His "disguised" links  (MAKE BELIEVE HEBREWS) will take you to his Trojan- and Spam-laden "Whacked Out Biblicism" webpage.   He also posts as  "stizazz" and has been banned countless times for more than five years with countless log-ons.

 

Copy and paste the following text and send to abuse@zerohedge.com

"BAN and REMOVE spam accounts  "lloll"  and   "stizazz"   who are more log-ons from CHRONIC Spammers that ZH has been banning for years (that's you,   biblicism  &  dailywesterner)"

In reply to by lloll

Bigly Moe Hamhead Sun, 03/11/2018 - 23:25 Permalink

That was my thought.

Privscy is a good thing and they are not responsible for end user actions.

Doughnut eating lazy fat fucks are too stupid to get them the old fashioned way...using detective work. Instead they want to dragnet (most likely without warrants) and make their case this way.

Sounds ass backward, wrong, illegal.

Is EVERYONE a corrupt asshole?

In reply to by Moe Hamhead

Abaco Ace006 Mon, 03/12/2018 - 15:31 Permalink

God forbid the feds criminalize privacy.  What is the underlying crime here?  They made a device more secure.  The feds don't want to take responsibility for all the fat asses they created by subsidizing corn and putting that HFCS shit in everything why should they hold anyone else to account for someone abusing their product?

In reply to by Ace006

HRClinton Bes Sun, 03/11/2018 - 21:47 Permalink

15 yrs ago, during the start of the Iraqi war, many western media people used BBs to send out their encrypted stories via a Sat uplink.

I recall a TV news bit on this, and that the Saudi gov was very unhappy about this -- on the grounds that they might be leaking secure intel to "the wrong people".

I commented instantly, that this will be the end of BB, beause Saudi, Israeli and Usraeli intel services won't tolerate it: "Expect BB to come under Wall St criticism and attack", I predicted. Am not kidding or making it up. IMO, it was an obvious call, really.

In reply to by Bes

jmack HRClinton Sun, 03/11/2018 - 22:10 Permalink

you are correct.   They are systematically aiding those that allow them to peek into your life, and attacking those that try to form a business plan around protecting your privacy.   That is not to say that a group like this that is targeting services and products to drug cartels is worthy of your sympathy, but at this stage, I would not say they arent worthy of your sympathy.

 

     I would much rather cops were relegated to coming to my middle or high school and telling me about the evils and dangers of drugs, and then letting me decide rightly or wrongly how to waste my life, then to have this interminable attack on our civil liberties f for some facade of a war on drugs.  It is quite evil, just like all the moonshiners and smugglers that died or had their lives destroyed just a year or 3 before the 18th amendment was repealed.

 

   But let me be more clear, the cartels with their meth dealings and hitmen, are clearly justifiable targets,  but not at the expense of a law abiding citizens privacy.   And the LEO's always cry and complain, you are helping those evil men.....   but they never, ever address how many evil men they are helping by stripping away our privacy rights.  LEO wants the cheat codes, and then they dont want anyone to see how they use those cheat codes. That is exactly the wrong thing to allow them to have, it is actually counter productive, because it just increases the chance of corruption growing in that institution, which will then be used by the cartels.

In reply to by HRClinton

zoo Bes Sun, 03/11/2018 - 22:06 Permalink

Pretty good idea for a company to do this, but can you even trust a company. What if they're CIA affiliates? on that same note, I can't even send zipped file on hotmail if it has a password on the file. Total reason to ditch anyone who doesn't let you have encryption. Bitlocker is crap too. Much safer to use Truecrypt (even though they claim is less secure)

In reply to by Bes

yellowsub Bes Sun, 03/11/2018 - 22:53 Permalink

Fact is Americans doesn't care if the gov't spies on them nor do they care about the law that gives them power to kill Americans...  

So what happens if the same people who labels you unfit for gun ownership now labels you as a "terrorist"?   

You see that every "freedom" you gave, you will never see them back.

They were smart to go after the guns and speech as the last 2 items, didn't want to make the people aware until the last moment.

 

In reply to by Bes

holgerdanske Bes Mon, 03/12/2018 - 04:08 Permalink

I will only use BlackBerry simply because they refuse to comply with the Orwellian overlords.

The time where we have to fight for our freedom or become serfs is fast approaching.

This is one fucked up world we live in.

In reply to by Bes

TeethVillage88s El Oregonian Sun, 03/11/2018 - 21:40 Permalink

See you and me are in the doghouse, dogmeat... no matter status as investor, veteran, property owners, voter, citizen, level of debt or savings, low use of Credit, owning bonds, treasuries, gold, silver, having good responsibility, paying your fines & taxes, or whatever.  - We are just potential criminals and terrorists... maybe money laundering, maybe drug dealers, maybe receiving stolen goods, maybe not throwing out old prescription drugs...

In reply to by El Oregonian

junction El Oregonian Sun, 03/11/2018 - 22:00 Permalink

What next, arrest Elon Musk for selling cars that make it easy to break the speed limit?  This law and order spectacle is a total sham, the NSA could already break the BlackBerry encryption.  Grafting cops couldn't, though, making it more difficult (but not imposible) for these LEOs to shake down drug dealers for protection money.  

In reply to by El Oregonian

TeethVillage88s Richard Head Sun, 03/11/2018 - 21:50 Permalink

Sovereign Immunity for Lois Lerner, James Comey, FISA Court Judges, McCabe, Page, Schrzock, Moiller,...Podestas, Awans, Wasserman-Schutz, ... but not for Clinton Dead Bodies or Clinton Bimbos... Central Bankers & TBTF are protected but not small US Banks.

https://www.kauffman.org/-/media/kauffman_org/research-reports-and-cove…
https://www.kauffman.org/~/media/kauffman_org/microsites/sotf/data_sour…
https://www.kauffman.org/what-we-do/research/business-dynamics-statisti…

In reply to by Richard Head

rejected Sun, 03/11/2018 - 21:23 Permalink

According to the heavily redacted filing written by FBI Special Agent Nicholas Cheviron, the encrypted phones "were specifically designed to prevent law enforcement from intercepting and monitoring communication on the network,"

There ya go, in plain sight now boys and girls. Yea,,,, just keep thinking your data and phone service are secure.

Course,,, You have nothing to hide..... right?

jin187 yellowsub Mon, 03/12/2018 - 02:12 Permalink

Yeah, that was how they got him.  Saying you make devices no one can decrypt or monitor is one thing.  Directly advertising to criminals, and seeking to do business specifically with them is conspiracy, hence all the drug charges they're hitting him with, despite the fact that he's likely never touched any drugs, or done anything related to them other than provide phones.  If the idiot had just strongly implied what his devices were for, and took all payments and customers no questions asked, he wouldn't be getting charged with anything, and the gubmint would just be stuck whining about how they can't see El Chapo, or whoever the fucks email in a FISA court somewhere.

In reply to by yellowsub

HRH of Aquitaine 2.0 Sun, 03/11/2018 - 21:30 Permalink

At least the Federales locked up someone. That counts. I guess.

I suggest they take that one cooperative member out of Kommiefornia and out of the US. Even Club Fed won't keep him safe if he is snitching on a Mexican cartel.