WEBVTT

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JACK: Alright, so I need to start this episode by giving a clear warning; this episode is

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going to get deep into drugs and overall is adult-themed. You may want to wait until the

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little ones go to sleep before tuning into this one. You ever think about how many of

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us got through high school by just the skin of our teeth? We’re just so young, naive,

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fearless, and feel like we know it all. With an attitude like that, we’re bound to make

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some kind of grave mistake in our teenage years, and many of us do. We crash our parents’

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car, try drugs, cigarettes, alcohol. We skip school, hang out with the wrong kids, steal,

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cheat, get pregnant, or expelled.

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These are all common stories that every high school principal has heard all too often.

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Now, some kids try something bad and they get caught, and they get in trouble, and they

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decide not to do that again. But other kids try something bad and they get away with it.

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It’s all up side for them – they don’t experience any negative consequences. So,

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they try it again, and again, and again, and before you know it, they’re habitually doing

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something wrong which can send a teenager on a trajectory that can take a decade to

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recover from. This is actually a story about the darknet. How about that? It’s a story

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about how a darknet market drug dealer got started, rose to power, and how it all came

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crashing down.

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INTRO: [INTRO MUSIC] These are true stories from the dark side of the internet. I’m

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Jack Rhysider. This is Darknet Diaries. [INTRO MUSIC ENDS]

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JACK: I don’t know if you want to go nameless in this or you want me to use a fake name,

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or what do you want to do?

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V: Yeah, I think you can just use a fake name. If it’s easier to call me by a letter in

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the alphabet, you can do that.

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JACK: Okay, so let’s pick a letter, then; V. This is V. V doesn’t want to reveal his

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real name and that sort of thing, but I want you to know, the listener, that I have fact-checked

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V’s story by looking through public records using his real name, and I saw screenshots

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and documents which confirmed as much of the story as I could. V’s story starts in high

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school and while there, he was hanging out with some questionable kids. Like, can you

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describe the people a little bit? Are they skateboard punks?

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V: Yeah, skaters, kids who were just burnouts.

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JACK: Did you skate?

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V: I did not skate, no. I was probably the most un-athletic person you could imagine.

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I lift weights and stuff like that, but outside of that, I never played a sport. I was the

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music kind of kid and I was in school – in school, I was part of that cool kid crew,

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but not immediately. I was homeschooled for a good portion of my life, so my social skills

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did not really creep in until much later. But once they did, yeah, I was a popular kid

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but I was also a music kid. I wasn’t a sports jock or anything like that. It was different

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for me.

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JACK: V grew up in an upper-middle class family. That’s not to say the family didn’t have

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money troubles, but it does mean he never went hungry. He always had clothes, a safe

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place to live, he could visit a doctor anytime he needed, and he was attending a private

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school. His parents got him into learning musical instruments when he was young, and

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he kept playing it all the way through high school. But his friends that he was hanging

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out with in high school, they weren’t the best influence.

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V: Weren’t really about school or wanted to do other things – not looked at with

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the utmost respect. Yeah, a lot of those types.

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JACK: I laugh at skateboard punk ‘cause I was a skateboard punk in high school myself.

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V: Yeah, yeah. Well, there were a few – quite a few of those, and a lot of those guys were

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selling weed and stuff like that, so I kinda fell in with that crew. I started smoking

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weed actually before I drank, when I was like seventeen, sixteen, seventeen. Then from that

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point – I’ve always had a business-oriented mind. I was like well, I can easily smoke

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for free if I buy more weed and sell it at a higher price, so that’s what I started

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to do. One of those burnouts that I was talking about showed me the original Silk Road and

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my mind was blown. [MUSIC] I think I ended up – this was around when Bitcoin was trading

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at maybe like 30 or 40 bucks, so it was [00:05:00] like, I got to the point where I would just

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pick up some exotic eighths of weed or whatever and eventually up my quantity.

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JACK: Yeah, so you were buying on Silk Road? Was that your main supplier as a high-schooler?

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V: When I was a teenager, I was buying on the Silk Road. I didn’t have any money at

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the time, so I would actually have people front me. [MUSIC] It got to the point where

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this kid that I knew that was one of those skater punks I talked about earlier would

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give me money to buy him a pound. I didn’t tell him where it was coming from but I said

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hey, I have somebody that can ship to me from California or whatever. He was like, okay,

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the stuff you’ve been getting me is – have been really good, so let’s do that. I was

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like, okay.

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JACK: He wasn’t very good at staying private back then. He didn’t know how to do it,

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really. At sixteen, seventeen, you don’t know all the tricks and how to hide from the

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feds.

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V: I remember the first time I used it. I was like hey, do you – like, I remember

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private messaging some vendors and I was like, do you guys take PayPal? Just being laughed

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away, like get the hell out of here, man. I learned a lot through the darknets about

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Bitcoin and PGP and cyber-security.

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JACK: Of course, he didn’t want to send packages to his home address. That would raise

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suspicion maybe with his parents, so he sent packages to another address. He actually had

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another family member who he could ship stuff there, and they would accept packages in exchange

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for some cash.

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V: Yeah, that was a pretty good summer for me, especially just being eighteen and just

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heading off to school. I had a pretty good nest egg getting started.

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JACK: That was V’s senior year in high school and the summer after that. Then he was looking

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at what colleges to go to. The state college where he lived looked pretty good, so he applied

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there and got accepted with a music scholarship. [MUSIC] So, off to college he went. He moved

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to the town where the university was and got a roommate and was attending classes.

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V: I was in college for music and I was also – at the time, I was a pre-med major. My

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first year, I – because I had a – I had a music scholarship, so I had to major in

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music in order to keep that scholarship.

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JACK: But while there, he learned quickly what kind of drugs the college kids were interested

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in.

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V: Eventually, once I got to college – at some point in college, Silk Road went down.

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JACK: Oh, so I should quickly explain what a darknet marketplace is. I think you understand

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already; it’s just a place to buy and sell illegal drugs online, but these places aren’t

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on the regular internet. It’s on kind of a secret version of the internet called Tor.

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What’s so special about Tor is that that protocol is anonymous by default. Once you

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connect to Tor, your IP address gets hidden so nobody can track where you’re connecting

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from. It doesn’t quite make you anonymous because if you get on Tor and then tell people

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your real name and address, you unveiled yourself. But it does help you stay anonymous if that’s

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what you want to be. Online drug dealers typically want to be anonymous.

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[MUSIC] But I should clarify something here; buying illegal drugs online is, well, illegal,

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just like buying them on the streets, so the feds are actively trying to find who’s running

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these darknet marketplaces and working towards shutting them down. According to the FBI,

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Silk Road emerged as the most sophisticated and extensive criminal marketplace on the

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internet at the time. A darknet marketplace typically sells illegal stuff; drugs and other

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illegal things like weapons and fake driver’s licenses. The FBI took down Silk Road and

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arrested its owner on October, 2013. When that happened, users of the site flocked to

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other marketplaces. V here just moved to Agora, another darknet market. Now, by this point,

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he learned that the people in his college were mostly interested in a different drug

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other than weed. He doesn’t want to say what kind of drug, but he was buying them

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on the Agora marketplace and selling them on campus.

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V: To the fraternities, to anyone who would really buy in bulk from me. They were pills;

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it was in pill form, so I would be selling basically K-PAX which are just 1,000 pills

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to whoever wanted them. I would be getting 10,000 - 20,000 of those from the darknet.

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JACK: Now, he was staying in an apartment on campus with a roommate, but he knew not

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to send these drugs to his own apartment.

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V: I had a lot of friends in apartments and these are college kids that need money and

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that don’t really want to sell pizza, so I would give them an easy $100, $150 bucks

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for every drop and just be like hey, this package is coming. Don’t worry about what’s

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in it, but I’m gonna pay you for your services and I’m gonna continue to use you every

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week, so these guys were bringing in [00:10:00] anywhere from $150 to $300 a week which is

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some nice extra pocket change when you’re in college. That’s extra pizza nights or

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whatever. I never shipped to my own address at that point because I just knew so many

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people that were willing to let me use their address.

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JACK: It sounds clever, but do you think it was actually effective? Because let’s say

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the feds go to your friend’s apartment and say alright, we know there’s some drugs

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that got shipped here. What’s the deal? Don’t you think they’ll say oh yeah, it’s

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this guy’s stuff. It’s not mine.

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V: Yeah, there’s always that risk, right? There’s always that risk that somebody’s

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gonna tell on you, but there’s only so much you can really do. I mean, besides me starting

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a shipping business in a warehouse, it’s – there’s not really anything you can

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do to ship large quantities except to really trust your circle. But there’s always that

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risk that somebody’s gonna flip. Eventually, I had sold to a roommate ‘cause I got greedy.

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He was an idiot and sold to an undercover officer. They had done three controlled buys

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with him and one of the controlled buys was in a car; one of the controlled buys was in

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his room in the apartment.

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JACK: These undercover officers had collected enough evidence to get a search warrant for

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V’s apartment to look for drugs that his roommate was selling.

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V: [MUSIC] They didn’t know I existed. Eventually, one day I was in my apartment and my room

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– there was a knock on the door. My roommate answered the front door. I was in my room

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in my separate bedroom and my roommate answered the door. I heard some cops say hey, is there

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anyone else in the apartment? I freaked out because I had 5,000 or 6,000 pills in my room.

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Actually, it was a little more than that. I was trying to stuff them all into my safe

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and they were at my door like open the door, open the door. I was like, I’m getting dressed,

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I’m getting dressed. They burst into the room once I opened it, and basically found

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all my pills. I was arrested. I wasn’t even on the warrant.

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JACK: What’s that feeling like with the feds banging on the door as you’re…?

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V: Those weren’t feds. That was a state case, but that feeling was not good. It’s

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the same feeling every time. It’s just a feeling of non-belief, really. It’s just,

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your stomach sinks as low as it can go and you’re like, holy shit, my worst nightmare

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is happening.

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JACK: All his stuff got confiscated. He went down to the police station and got booked,

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but was able to make bail pretty quick, so he got out of jail and was facing felony charges

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for this.

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V: Yeah, it was a felony possession with intent to distribute. I didn’t think the school

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would find out. My lawyer told me the school probably wouldn’t find out. Turns out they

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did, so I was referred to the Student Conduct Office and they were like hey, we’re gonna

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let you finish out your semester, but you’re gonna be suspended for the next year. I thought

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I was gonna get kicked out, so that was really good news to me. But yeah, so the next year,

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I kinda was just – kinda spent laying around not doing much.

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JACK: Now at this point in the story, it could go in a lot of directions, right? I’m always

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fascinated by why we choose what we choose to do. [MUSIC] V here could wait another year

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and go back to school again and try to finish up his pre-med or he could try switching schools

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so he doesn’t have to wait at all. He could possibly get a good paying job and not worry

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about school at all anymore. He was twenty-one at this time and he was still waiting for

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his sentence and everything from his arrest. Maybe you’ve been in a similar situation

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where when you’re young, you tried real hard to accomplish something great like pre-med

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school, but it just failed big-time. It took all the wind out of your sails and you felt

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like well, crap, now what do I do with my life? On top of it all, he needed some cash

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to get by, so he had to figure out something quick.

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V: I was financially driven at that point because like I said, I had already been charged.

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I was kind of pending a judgment on that case and I was like, look – I basically told

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myself I’m expelled from school, I am not gonna be able to get a job, I have a charge

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on my record that’s pretty serious. I don’t want to bag groceries for $10 an hour.

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JACK: So, he decides to get back into drug dealing on the dark web. But this time he

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wanted to be a vendor because he was buying drugs on darknet marketplaces and selling

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them locally, but now he wants to get drugs locally and sell them on the darknet markets.

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This way, he only has to interact in-person with the one supplier who he trusts, and not

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a lot of individual buyers.

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V: I want to do this. I think it’s the most – I think this is the way that I could mitigate

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risk the most while making the most money. It was a [00:15:00] no-brainer for me.

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JACK: Well, isn’t the being arrested for this exact same thing supposed to deter you

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from this? Here, it did the opposite.

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V: Yeah, but it was deterring me – the only reason that I got caught in that situation

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was because I did an in-person sale. You know what I mean? What I’m talking about is it’s

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way easier for me to not get caught if I’m doing anonymous sales on the dark web. No

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one’s gonna know who I am. I’m shipping out from a return address that doesn’t exist.

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It’s not even me really doing the shipping. But yeah, the justice system is supposed to

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work in that when you get arrested, you’re supposed to be rehabilitated and not do that

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again. But like I said, I hadn’t really been punished yet. I had made bail and I was

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just kinda out and doing my thing.

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JACK: This is almost immediately after being arrested. Well, it was before your sentencing

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at least, so it was within a few months.

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V: Yeah, but I’m still – I was pending on that case for a long time because I actually

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– my lawyer had actually gotten the case thrown out and then the state appealed and

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it was brought back. There was a whole lot of back and forth, so that case was pending

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for more than actually two years. It wasn’t resolved for literally two years. So, basically

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a year after that, after the initial arrest, the idea formed in my head to start looking

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into this.

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JACK: He’s got the idea to be a vendor on these marketplaces, but the first thing he

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needs to do is find a supplier. This whole time, he had kept in contact with his old

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buddies from high school who were selling weed back then. Well, this one guy was still

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selling drugs all these years later.

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V: [MUSIC] Eventually, he got to the point where he was way, way, way bigger than I was

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and I kind of would go through him for certain stuff that I needed that I couldn’t necessarily

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get off of the dark web or that would just be more convenient for me to get in-person.

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Eventually, his bread and butter became cocaine.

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JACK: He was getting cocaine from a big supplier who was a few hours away.

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V: I kinda knew at that point that there was a market for this stuff on the darknet because

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the stuff that I had gotten, the cocaine that I had gotten off the darknet was kinda weak.

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It wasn’t great. There was a lot of in-fighting between vendors at that time. No one really

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led the pack. I think that there was a vendor that had just either stopped or gotten nabbed

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or something, and so everyone was kind of in disarray. It was kind of the perfect time

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to get in. That’s what we did. I kind of was able to convince him and say hey, look,

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you have a really great product here. I think we can have competitive pricing. I think we

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have the best quality. Let’s rock and roll, man. Let’s get this shit done. I convinced

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him and we both got on board together and made it happen.

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JACK: V brings his friend into this, another guy he trusted and who also needed cash, too.

00:18:12.090 --> 00:18:17.730
The two of them got started working on this. Now, V lived in a different town from where

00:18:17.730 --> 00:18:22.400
the supplier guy was, but he was trying to find a place to stay nearby to do this business.

00:18:22.400 --> 00:18:25.929
V: He said, are you living here this summer? I was like yeah, I’ll move down here for

00:18:25.929 --> 00:18:31.059
the summer. He’s like alright, well, you’re gonna need a place for you and – you and

00:18:31.059 --> 00:18:39.360
my friend who was with me. Let’s call him Paul. So, me and Paul – he was looking around

00:18:39.360 --> 00:18:44.150
for an apartment for us, for me and Paul. I was like well, how are you gonna get the

00:18:44.150 --> 00:18:49.000
apartment, because I – obviously, we can’t have it in our names. He’s like, I got a

00:18:49.000 --> 00:18:59.440
guy for it. He had a guy that would actually find people to sign leases on apartments and

00:18:59.440 --> 00:19:05.480
then just not live there. He would pay them a set amount of money to put their name on

00:19:05.480 --> 00:19:10.850
the lease. It was really cool because we were living in this place that wasn’t connected

00:19:10.850 --> 00:19:16.570
to us in any type of way. If we weren’t there and a raid was conducted or something,

00:19:16.570 --> 00:19:22.169
it’s not our shit, which was pretty cool.

00:19:22.169 --> 00:19:27.120
JACK: V and Paul move into this apartment which wasn’t in their name, and they started

00:19:27.120 --> 00:19:31.200
setting up shop. [MUSIC] Now, at this point, V was pretty familiar with the way darknet

00:19:31.200 --> 00:19:35.820
marketplaces worked and got right to work trying to establish himself as a vendor. First,

00:19:35.820 --> 00:19:38.750
he had to do a lot of research to figure out where to set up shop.

00:19:38.750 --> 00:19:44.560
V: From my side, from my end, what I did was I – like you said, I did all of the research

00:19:44.560 --> 00:19:50.049
on the markets that I needed. I did all of the research on the best wallet that we should

00:19:50.049 --> 00:19:51.049
have.

00:19:51.049 --> 00:19:54.580
JACK: Yeah, so to do business on these [00:20:00] darknet markets, you want to be as anonymous

00:19:54.580 --> 00:20:00.640
as possible. Bitcoin, of course, is a way to transfer money digitally and anonymously.

00:20:00.640 --> 00:20:05.200
But if you have a lot of Bitcoin, you want to keep that secure. Keeping it on an exchange

00:20:05.200 --> 00:20:09.690
has two big risks; first, the Bitcoin exchange might just go down or get hacked and you could

00:20:09.690 --> 00:20:14.320
lose all your money. Second, the feds might issue a warrant to that Bitcoin exchange and

00:20:14.320 --> 00:20:18.789
try to get information on who owns that wallet. This wasn’t an option for him to keep his

00:20:18.789 --> 00:20:24.590
Bitcoin on an exchange. Instead, he used a cold wallet and sometimes a hardware wallet.

00:20:24.590 --> 00:20:30.190
Let me go one more level deep; each Bitcoin wallet has a private key. This is a sixty-four

00:20:30.190 --> 00:20:31.549
character string.

00:20:31.549 --> 00:20:36.160
Whoever has this private key can spend or transfer the Bitcoins in that wallet. It’s

00:20:36.160 --> 00:20:41.570
very important that you protect this private key at all costs. But people have a really

00:20:41.570 --> 00:20:46.350
hard time memorizing a sixty-four-character-long string, so this is where a seed phrase comes

00:20:46.350 --> 00:20:51.299
in. A seed phrase is just a bunch of random words together, something like wish, collapse,

00:20:51.299 --> 00:20:56.660
practice, feed, shame, open, despair, creek. Now, this seed phrase is what’s used to

00:20:56.660 --> 00:21:02.300
create the private key. People store these seed phrases on a piece of paper or in a vault

00:21:02.300 --> 00:21:06.510
as a last-ditch effort for recovering their Bitcoin wallet if their computer gets ruined

00:21:06.510 --> 00:21:11.640
or something. If you have the seed phrase, you can generate the private key, and if you

00:21:11.640 --> 00:21:15.960
have the private key, you can do whatever you want with that Bitcoin wallet. V had to

00:21:15.960 --> 00:21:16.960
set all this up.

00:21:16.960 --> 00:21:20.169
V: I also had the seed memorized and all that.

00:21:20.169 --> 00:21:25.160
JACK: I love this because this tells me he’s getting really serious about his security

00:21:25.160 --> 00:21:30.080
and privacy. If he can commit his seed phrase to memory, then he never has to worry about

00:21:30.080 --> 00:21:34.770
losing his private key or storing it in a place that get hacked. He can quickly generate

00:21:34.770 --> 00:21:39.200
the private key whenever he needs, make the transfers, then delete that private key when

00:21:39.200 --> 00:21:43.529
done. It’s brilliant. Of course, besides this, he’s also using hardware wallets.

00:21:43.529 --> 00:21:49.630
Two common brands are Ledger and Trezor. These are USB devices that store the private key

00:21:49.630 --> 00:21:54.000
so you can unplug them from your computer and store them in a safe or something. When

00:21:54.000 --> 00:21:58.630
you want to use them again, you plug them in, make the transfer, and unplug them. They’re

00:21:58.630 --> 00:22:02.910
also great ways to keep your Bitcoin safe. Okay, so he’s got his Bitcoin wallet figured

00:22:02.910 --> 00:22:07.809
out. Next, after doing a bunch of research, he decided to set up shop on the AlphaBay

00:22:07.809 --> 00:22:13.330
darknet marketplace. Now, I did a whole episode on AlphaBay called Operation Bayonet. It’s

00:22:13.330 --> 00:22:18.440
Episode 24, so check that out if you want the full story on AlphaBay. So, he starts

00:22:18.440 --> 00:22:19.830
setting up his account there.

00:22:19.830 --> 00:22:26.970
V: Well, there were a lot of things you had to memorize. Once we had the account set up,

00:22:26.970 --> 00:22:31.230
you want to memorize your username, obviously, you want to memorize your password, and you

00:22:31.230 --> 00:22:36.460
want to memorize your PGP credentials and all of that. I just kind of had a string of

00:22:36.460 --> 00:22:43.580
letters that I thought was random, and they were probably like twenty-five to thirty characters

00:22:43.580 --> 00:22:52.190
in length each, so I kinda sat there and had them on a piece of paper and memorized them;

00:22:52.190 --> 00:22:56.000
said them over and over like I was studying for a test, really. You know?

00:22:56.000 --> 00:23:00.470
JACK: Now, one reason he wants to memorize all this is because he wants to leave no digital

00:23:00.470 --> 00:23:06.010
trail of any of this stuff. If some law enforcement officer grabs his computer, he didn’t want

00:23:06.010 --> 00:23:10.720
to just have a page of passwords that were listing all the keys to the kingdom. He knew

00:23:10.720 --> 00:23:15.340
that if he kept all this stuff in his head only, it would never end up in the hands of

00:23:15.340 --> 00:23:20.610
someone he doesn’t want seeing it. But there’s a lot more stuff he had to do to stay anonymous.

00:23:20.610 --> 00:23:22.320
V: I used Tails.

00:23:22.320 --> 00:23:27.050
JACK: Tails is great. I use it all the time, too. Tails is a Linux operating system, but

00:23:27.050 --> 00:23:31.919
it’s designed to completely forget about everything you did when it shuts off. [MUSIC]

00:23:31.919 --> 00:23:36.320
Basically, you power up Tails which has a browser and automatically connects you to

00:23:36.320 --> 00:23:40.760
Tor, and you can do all your work on it. But when you shut it down, it wipes everything

00:23:40.760 --> 00:23:46.800
you did. There’s no record or trail of anything. There’s no browser cache, no passwords saved,

00:23:46.800 --> 00:23:48.480
no downloads saved, nothing.

00:23:48.480 --> 00:23:50.130
V: I installed it on a USB.

00:23:50.130 --> 00:23:53.950
JACK: But see, that’s what’s slick about it; you have Tails on a USB drive and you

00:23:53.950 --> 00:23:59.390
plug it into your computer, boot to USB, and it boots up into Tails. When Tails runs, it

00:23:59.390 --> 00:24:04.520
runs entirely in memory, in RAM. Remember, RAM doesn’t save any data when the computer

00:24:04.520 --> 00:24:09.400
is shut down, so it just gets flushed out automatically. But now you’re starting to

00:24:09.400 --> 00:24:14.870
see the other benefit to memorizing his passwords, Bitcoin phrase, and PGP keys, because every

00:24:14.870 --> 00:24:19.950
day when he boots up his computer, he’s got to enter all this stuff in again. Okay,

00:24:19.950 --> 00:24:25.330
this is great, but now we need to set up connectivity to the internet. Surely you don’t want to

00:24:25.330 --> 00:24:29.640
use an ISP connection which is registered to your real name. If any law enforcement

00:24:29.640 --> 00:24:34.940
gets your IP and traces it back, the ISP can quickly find out it was you who connected.

00:24:34.940 --> 00:24:39.789
There’s a few options here; you could set up a VPN or you could go to a different coffee

00:24:39.789 --> 00:24:43.700
shop or library every day, because you’re gonna want to switch it up often so you don’t

00:24:43.700 --> 00:24:47.470
get caught going to the same place every day. But V had a different solution.

00:24:47.470 --> 00:24:52.870
V: We actually had somebody from Comcast. I guess he worked for them, but also [00:25:00]

00:24:52.870 --> 00:24:58.030
had his own side thing going on. We had routers in the apartment that were in other people’s

00:24:58.030 --> 00:25:00.890
names and stuff, so we didn’t really have to leave.

00:25:00.890 --> 00:25:04.710
JACK: Okay, that’s cool. They got a clean, anonymous internet connection that can’t

00:25:04.710 --> 00:25:06.480
be tracked back to them. Sounds great.

00:25:06.480 --> 00:25:12.870
V: I didn’t use a VPN. From my understanding, there was no – I didn’t see any significant

00:25:12.870 --> 00:25:20.480
benefit in using a VPN. It just made all of my shit slower, so I didn’t use it. I tried

00:25:20.480 --> 00:25:25.580
to find a definitive answer on that and it was not – there was nothing that was definitive.

00:25:25.580 --> 00:25:29.740
JACK: There’s a debate about this. I’m not entirely sure myself. I would probably

00:25:29.740 --> 00:25:35.210
err on the side of caution and use a VPN and Tor because a VPN encrypts the traffic while

00:25:35.210 --> 00:25:40.430
Tor anonymizes it. They’re two slightly different things. If you connect to Tor, your

00:25:40.430 --> 00:25:45.480
ISP can detect that you did that. But that’s about all they can figure out about you. They

00:25:45.480 --> 00:25:49.840
just know that you went to the darknet; not which website you went to, though. Using a

00:25:49.840 --> 00:25:55.530
VPN means your ISP no longer knows you went to Tor. But your VPN provider now knows you’re

00:25:55.530 --> 00:26:00.970
on Tor, so it’s just a matter of moving that line about who knows you went to Tor.

00:26:00.970 --> 00:26:06.570
Anyway, another big important part of starting the day was handling PGP. PGP stands for Pretty

00:26:06.570 --> 00:26:10.830
Good Privacy and it’s a method for encrypting your communication. You can set up your chat

00:26:10.830 --> 00:26:16.160
messages on AlphaBay to encrypt using PGP, so even if the feds sees the servers, they

00:26:16.160 --> 00:26:21.000
couldn’t read your messages because they’re encrypted with PGP. Now, logging into AlphaBay

00:26:21.000 --> 00:26:23.940
isn’t just as simple as putting in your username and password.

00:26:23.940 --> 00:26:32.570
V: Username and password, but then you also have to decrypt a message using your PGP authentication.

00:26:32.570 --> 00:26:41.330
They would be like, they would send you – you upload your public key to AlphaBay, I guess,

00:26:41.330 --> 00:26:46.730
and then they’re able to – they encrypt a message with your key, I guess, and then

00:26:46.730 --> 00:26:52.180
they’re like, decrypt this message or something. Every morning or every time I logged in, I

00:26:52.180 --> 00:26:55.159
would have to copy and paste this block, decrypt it.

00:26:55.159 --> 00:26:59.549
JACK: Now, Tails has tools to help you with this. [MUSIC] First, he would need to generate

00:26:59.549 --> 00:27:05.320
his private PGP key every time he booted up Tails. He would do this by entering his PGP

00:27:05.320 --> 00:27:11.000
passphrase into an app on Tails which would then generate the private key. Remember, he’s

00:27:11.000 --> 00:27:15.780
memorized his PGP passphrase just to make this part easier for him. Then he could copy

00:27:15.780 --> 00:27:20.520
the encrypted message into some kind of decryption app and he could read the message and pass

00:27:20.520 --> 00:27:26.429
the challenge. Phew; all that just to log into his AlphaBay account every day. That’s

00:27:26.429 --> 00:27:30.409
a lot of work. Actually, he would probably do it more than once a day because in order

00:27:30.409 --> 00:27:34.919
for him to erase all his digital tracks on his computer, all he needs to do is shut it

00:27:34.919 --> 00:27:40.419
down and Tails erases everything. If he was going out of his apartment for a while, he’d

00:27:40.419 --> 00:27:44.669
probably shut down his computer in case someone got into his apartment while he was gone.

00:27:44.669 --> 00:27:49.880
But this is what it takes to stay anonymous and secure. Just to recap quickly; in order

00:27:49.880 --> 00:27:54.750
for him to log-in every time, he would need to boot to a fresh operating system, Tails,

00:27:54.750 --> 00:28:00.350
enter in his PGP passphrase to generate his private PGP key, enter in his Bitcoin passphrase

00:28:00.350 --> 00:28:05.720
to generate his private Bitcoin key, connect to Tor, find the URL to AlphaBay login, decrypt

00:28:05.720 --> 00:28:11.380
the PGP challenge, and then he’s in. Oh, and all the while, he’s on a clean WiFi

00:28:11.380 --> 00:28:16.480
connection, too. Can you see now why someone might slip up or get lazy and take shortcuts

00:28:16.480 --> 00:28:21.360
with this? Imagine having to do this every time you came to work. Companies all over

00:28:21.360 --> 00:28:25.809
the world set up single sign-on to make it easier for employees to log-in, but this is

00:28:25.809 --> 00:28:31.269
the opposite of easy. Anyway, now that he’s got his AlphaBay account all set up, he’s

00:28:31.269 --> 00:28:33.220
got to apply to be a vendor.

00:28:33.220 --> 00:28:39.350
V: At the time, all you really needed to do was pay money to a wallet that AlphaBay gave

00:28:39.350 --> 00:28:46.100
you. You would sign up as a user account, I think, or you would sign up as a new account,

00:28:46.100 --> 00:28:50.010
maybe not as a buyer or seller yet, and then they would be like alright, if you want to

00:28:50.010 --> 00:28:55.840
apply for seller status, send $500 to this address or whatever. At that point, once you

00:28:55.840 --> 00:28:58.429
did that, you were verified as a seller and could start selling.

00:28:58.429 --> 00:29:02.320
JACK: Alright, so you might be wondering why he had to send $500 in Bitcoin to AlphaBay

00:29:02.320 --> 00:29:06.490
to be a seller. Well, there’s this thing called escrow there. Basically, when you sell

00:29:06.490 --> 00:29:10.590
something, the buyer pays the money but it doesn’t go to you. It goes to AlphaBay where

00:29:10.590 --> 00:29:15.090
it sits and it’s held by them. Then AlphaBay says okay, look, we got the money, this guy

00:29:15.090 --> 00:29:19.669
looks legit. Go ahead, send him the cocaine that he bought. So, then you send the drugs

00:29:19.669 --> 00:29:25.890
and wait, and wait, and wait. After the buyer gets the drugs and tries it and thinks it’s

00:29:25.890 --> 00:29:30.310
legit and it’s good, he goes back to AlphaBay and says okay, I got the drugs and they’re

00:29:30.310 --> 00:29:34.950
all good. Then AlphaBay releases the Bitcoin and sends it to the seller.

00:29:34.950 --> 00:29:41.600
V: If you were just shipping rocks to somebody, like literal rocks, they would – the buyer

00:29:41.600 --> 00:29:45.490
could say hey, this guy shipped me fucking rocks and everything; you don’t get your

00:29:45.490 --> 00:29:53.309
money. There’s an incentive there to actually [00:30:00] ship product, you know? I hated

00:29:53.309 --> 00:29:59.100
escrow, every – I hated the idea of escrow just from the start because what if the market

00:29:59.100 --> 00:30:05.690
goes down? What if the market exit scams? What if a customer says the product is not

00:30:05.690 --> 00:30:09.470
what it says it is but I know that it is the product, you know what I mean? It’s a pain

00:30:09.470 --> 00:30:15.580
in the ass and you’re dealing with disputes all the time. So, I tried to get to the point

00:30:15.580 --> 00:30:21.650
where we were generating enough sales that I could apply for finalized early status.

00:30:21.650 --> 00:30:27.110
JACK: Oh yeah, the finalized early status, or FE, is what every vendor wants. This means

00:30:27.110 --> 00:30:31.450
you’ve had enough legit transactions that AlphaBay sees you’re a trusted vendor and

00:30:31.450 --> 00:30:36.190
no longer holds your money in escrow. As soon as someone buys from you, you get your Bitcoin

00:30:36.190 --> 00:30:40.169
right away and you can ship the product to the person. He wanted to get to this status

00:30:40.169 --> 00:30:46.890
as quick as possible. Okay, so he needs to send $500 in Bitcoin to this darknet market.

00:30:46.890 --> 00:30:51.500
[MUSIC] Now, he has to actually get some Bitcoin to do that with. I mean, he’s starting with

00:30:51.500 --> 00:30:56.720
an empty wallet. Many Bitcoin exchanges are regulated by the feds, and V didn’t want

00:30:56.720 --> 00:31:01.440
to buy a Bitcoin from a place that could send information to the authorities. On top of

00:31:01.440 --> 00:31:05.639
that, there’s a lengthy process of connecting your bank account to an exchange, transferring

00:31:05.639 --> 00:31:09.960
your money to it, and then having to wait for your funds to clear before buying Bitcoins

00:31:09.960 --> 00:31:12.909
with it. It can take a few days sometimes.

00:31:12.909 --> 00:31:19.260
So, he researched it and found a site called LocalBitcoins. Now, I’m not sure exactly

00:31:19.260 --> 00:31:23.980
how LocalBitcoins works because I’ve never used it and it seems really weird to me, but

00:31:23.980 --> 00:31:28.570
from what I understand is that there are users on LocalBitcoins that say hey, send me some

00:31:28.570 --> 00:31:32.110
money, give me some cash and as soon as I get it, I’ll turn around and send you Bitcoins

00:31:32.110 --> 00:31:37.149
for the same amount minus a fee. There’s this whole trust thing now with Local Bitcoin

00:31:37.149 --> 00:31:41.620
users, like if I give them cash, are they really gonna send me Bitcoin? But now you

00:31:41.620 --> 00:31:46.110
have to figure out how to get people cash. There are a number of options, though. You

00:31:46.110 --> 00:31:50.590
could send someone a MoneyGram or a Western Union or just meet them locally and give them

00:31:50.590 --> 00:31:55.110
cash, or send them cash in the mail. V looked at his options and chose the best one for

00:31:55.110 --> 00:31:56.110
him.

00:31:56.110 --> 00:32:01.230
V: Went to LocalBitcoins and direct deposited money into somebody’s account. When you

00:32:01.230 --> 00:32:06.909
go to a bank and direct deposit money like that, they don’t ask for ID, so I just direct

00:32:06.909 --> 00:32:13.500
deposited it into the account that was listed and I got the Bitcoin immediately; sent it

00:32:13.500 --> 00:32:19.669
to my wallet. I wasn’t tumbling at the time but I sent it to my wallet and then I sent

00:32:19.669 --> 00:32:23.210
it from my wallet to the AlphaBay wallet.

00:32:23.210 --> 00:32:27.740
JACK: There you go; he found a user on the site, deposited cash in their bank account,

00:32:27.740 --> 00:32:32.760
and got the Bitcoin immediately. Crazy, huh? This is a weird way to get Bitcoin because

00:32:32.760 --> 00:32:36.809
it circumvents the exchange and you’re dealing with just another person in the world who

00:32:36.809 --> 00:32:41.740
wants to sell their Bitcoin, which means it’s off the radar of any audits, regulations,

00:32:41.740 --> 00:32:48.720
or databases that you ever bought Bitcoin. It’s like an anonymous way to buy it. So

00:32:48.720 --> 00:32:53.909
now, he’s got all the things ready to start selling. This was a lot of work to get here,

00:32:53.909 --> 00:33:00.510
but like any new entrepreneur, getting traction with sales is hard. Stay with us because after

00:33:00.510 --> 00:33:04.560
the break we’ll hear some pretty clever marketing tricks he used to get started.

00:33:04.560 --> 00:33:09.139
Ok so imagine you’re the new guy on a darknet marketplace. You’re posting that you’ve

00:33:09.139 --> 00:33:15.890
got cocaine for sale. But literally nobody knows who you are. You have 0 sales, 0 reviews.

00:33:15.890 --> 00:33:19.570
Who’s going to from you? No one. You’ve got no reputation.

00:33:19.570 --> 00:33:27.190
V: It was difficult to get off the ground. [MUSIC] There was a forum that I went to a

00:33:27.190 --> 00:33:35.179
lot where – I’m not gonna name the actual forum, but it’s a forum where buyers from

00:33:35.179 --> 00:33:41.549
the darknet kinda congregate and it’s kind of like a group for connoisseurs, sort of.

00:33:41.549 --> 00:33:47.120
They want the best product. There’s threads for cocaine, there’s threads for weed, there’s

00:33:47.120 --> 00:33:54.419
threads for pills, there’s threads for acid, et cetera, like who has the best whatever.

00:33:54.419 --> 00:34:01.210
People post reviews there and also, vendors post sales there and advertisements. I was

00:34:01.210 --> 00:34:09.330
the new – I was green, so I started posting there like hey, I’m willing to send out

00:34:09.330 --> 00:34:13.169
free samples to people, blah, blah, blah. When you send out a free sample or when you

00:34:13.169 --> 00:34:18.889
offer free samples, anyone and their mother’s gonna come because it’s free, right? There

00:34:18.889 --> 00:34:25.010
was a bunch of people. I think it was a free sample in exchange for a review on this particular

00:34:25.010 --> 00:34:30.500
forum and this particular thread, in the cocaine thread.

00:34:30.500 --> 00:34:37.710
I sent out a bunch of samples. Eventually the packs landed, they got their product,

00:34:37.710 --> 00:34:47.460
whatever, and a few reviews started to roll in. I posted some listings. I think the first

00:34:47.460 --> 00:34:53.359
sale probably came – the first actual sale where we had sold our first gram of cocaine

00:34:53.359 --> 00:35:02.070
on the darknet came about two weeks after the vendor account was formed, after all of

00:35:02.070 --> 00:35:07.170
the free samples went out, and after [00:35:00] three or four pretty positive reviews came

00:35:07.170 --> 00:35:14.660
out. At that time also, Reddit’s darknet market subreddit was still up, so people were

00:35:14.660 --> 00:35:20.770
posting reviews there. We got a lot of exposure pretty early just due to my free samples and

00:35:20.770 --> 00:35:28.220
the advertisements I was doing just all of the time. Once those free samples landed,

00:35:28.220 --> 00:35:32.720
once I got – that was when I got my first sale, was two weeks after that. From there,

00:35:32.720 --> 00:35:38.801
it just grew. The next day we probably had two or three that we had to send out. Within

00:35:38.801 --> 00:35:44.390
a month or two, we went to ten at the end of the month.

00:35:44.390 --> 00:35:49.880
JACK: This was the start of his online darknet marketplace selling spree. Every day he would

00:35:49.880 --> 00:35:54.770
repeat the same process of wake up, go through the fifty steps to log into AlphaBay, check

00:35:54.770 --> 00:35:58.740
his orders, print out the labels of where things were going, and then get the drugs

00:35:58.740 --> 00:36:03.250
from his supplier, package them up, and ship them out. I don’t think he put a valid return

00:36:03.250 --> 00:36:07.329
address on the product because if it got lost in the mail, oh well; he didn’t want it

00:36:07.329 --> 00:36:11.700
coming back to him, that’s for sure. He took great care to try to make the package

00:36:11.700 --> 00:36:16.910
look as normal as possible so it wouldn’t look suspicious to anyone along the way. Oh

00:36:16.910 --> 00:36:20.980
yeah, so let’s talk about packaging. To run a business like this, you need to know

00:36:20.980 --> 00:36:23.480
a lot about packing and shipping.

00:36:23.480 --> 00:36:32.510
V: When I sent out my stuff, it would be double-vacuum sealed and then Mylar would be used as an

00:36:32.510 --> 00:36:41.740
extra form of protection for any odors or whatever. Then I had a visual barrier on top

00:36:41.740 --> 00:36:50.359
of that. I was just told always that Mylar is expected and wanted by the buyer, so I

00:36:50.359 --> 00:36:57.370
just did whatever was the best – that the buyers considered the best OpSec. That’s

00:36:57.370 --> 00:37:02.610
what I always followed and I had received – when I was still buying, I had always

00:37:02.610 --> 00:37:07.069
gotten packages that had been Mylar and then there would be a vacuum seal, and then another

00:37:07.069 --> 00:37:14.870
vacuum seal, and then your product. That was why I used Mylar. Do I think it actually had

00:37:14.870 --> 00:37:21.890
any effect on keeping dogs from sniffing the packages? I have no idea. I don’t know.

00:37:21.890 --> 00:37:27.620
I do know that as far as I know, no package has ever been – no package on my end has

00:37:27.620 --> 00:37:32.849
ever been seized. I think that we did a pretty good job with that.

00:37:32.849 --> 00:37:37.329
JACK: Okay, so he’s getting orders coming in. He’s shipping drugs to people, but he

00:37:37.329 --> 00:37:41.890
still had to wait for people to come back to AlphaBay and click that they got the order

00:37:41.890 --> 00:37:44.280
and it was good in order for him to get paid.

00:37:44.280 --> 00:37:50.619
V: A lot of people don’t, and that’s the problem. You have an auto-finalize on pretty

00:37:50.619 --> 00:37:55.560
much every market you can – it auto-finalizes your order if you don’t report a problem

00:37:55.560 --> 00:38:01.450
with it, but it doesn’t auto-finalize your order for two weeks. Usually when I sent out

00:38:01.450 --> 00:38:09.230
an order, it would get there in two days. So, if you weren’t being a lazy piece of

00:38:09.230 --> 00:38:16.180
shit, you could just log in to AlphaBay and release your funds and everything is gravy,

00:38:16.180 --> 00:38:21.670
whatever. But a lot of people will get their stuff, forget to log back in, and it’s not

00:38:21.670 --> 00:38:29.030
even being a piece of shit; it’s just like, people forget. I’m now stuck with my thumb

00:38:29.030 --> 00:38:36.010
up my butt waiting for my money to come through. Cash flow could be a problem if you only have

00:38:36.010 --> 00:38:42.720
escrow enabled. That’s why I tried to get FE enabled as quickly as I could.

00:38:42.720 --> 00:38:47.990
JACK: When you finally got FE enabled, do you remember what that feeling was like?

00:38:47.990 --> 00:38:54.670
V: It wasn’t like a feeling of accomplishment. It was more like thank god, because now I

00:38:54.670 --> 00:38:59.380
can actually start to – we can actually start to increase volume here and kinda commit

00:38:59.380 --> 00:39:04.270
to this because before we had a cash flow problem where we weren’t getting our money

00:39:04.270 --> 00:39:12.520
on time. Now, the money’s coming to us first. We can turn over that cash into more cocaine,

00:39:12.520 --> 00:39:17.300
whatever we need to do with it, and it was just – it just made the process pretty much

00:39:17.300 --> 00:39:21.700
– there were way less headaches once finalize early was enabled.

00:39:21.700 --> 00:39:25.869
JACK: Okay, things were going pretty good for V and his buddy and his supplier on higher

00:39:25.869 --> 00:39:31.350
up, but there’s another piece to this puzzle; cashing out of all that Bitcoin.

00:39:31.350 --> 00:39:36.740
V: [MUSIC] Well, we had to convert because we had to – the product that we were getting

00:39:36.740 --> 00:39:41.650
was in cash, so the cocaine that we were getting was in cash, so we had to have constant cash

00:39:41.650 --> 00:39:42.760
flow and cash-out.

00:39:42.760 --> 00:39:47.940
JACK: They needed cash, but you can’t just deposit Bitcoin into your bank account. First,

00:39:47.940 --> 00:39:50.930
banks just don’t accept it and probably at this time, they didn’t even know Bitcoin

00:39:50.930 --> 00:39:56.080
existed. But second, it might be dirty Bitcoin. I mean, it’s coming straight from AlphaBay,

00:39:56.080 --> 00:40:00.319
right? You don’t want that going somewhere that can be traced to you. So once again,

00:40:00.319 --> 00:40:01.500
he goes to LocalBitcoins.

00:40:01.500 --> 00:40:11.980
V: Once we started selling, [00:40:00] I had set up a LocalBitcoins account for cash-in-mail.

00:40:11.980 --> 00:40:17.810
Basically with LocalBitcoins, you had different options to pay. At that time, cash-in-mail

00:40:17.810 --> 00:40:22.580
was an option. I’m not sure if it still is, but cash-in-mail was an option, PayPal

00:40:22.580 --> 00:40:32.329
was an option, direct deposit was an option. You had Venmo, you had Zelle, and I set up

00:40:32.329 --> 00:40:37.420
basically cash-in-mail and that was it. I had a really low rate.

00:40:37.420 --> 00:40:41.550
JACK: Okay, you get it, right? This is the opposite of how he bought Bitcoins. But now

00:40:41.550 --> 00:40:46.089
what he set up is when people sent him cash in the mail, as soon as he gets it, he would

00:40:46.089 --> 00:40:49.950
log into his Bitcoin wallet and transfer the Bitcoin to the person who just bought it.

00:40:49.950 --> 00:40:54.310
But let’s talk about fees. When he was selling Bitcoins to people, he was charging a small

00:40:54.310 --> 00:40:58.839
fee to make the trade. This was typical for people making trades here, but he was charging

00:40:58.839 --> 00:41:03.950
a very low fee sometimes, even below market value because he just wanted the cash, not

00:41:03.950 --> 00:41:06.170
to profit from this trade.

00:41:06.170 --> 00:41:12.790
V: Eventually though, I got disgruntled with that because I got a little paranoid. I was

00:41:12.790 --> 00:41:17.880
dealing with too many people and I had to give addresses and stuff like that. I found

00:41:17.880 --> 00:41:24.510
a trader who – I was doing cash-in-mail with them and I hadn’t – I had a burner

00:41:24.510 --> 00:41:27.941
address that I would send the money to and stuff, and they were very consistent. Eventually

00:41:27.941 --> 00:41:32.619
I messaged them and I saw where their return address was. Their return address happened

00:41:32.619 --> 00:41:37.130
to be within an hour of me, where I was. I was like hey, is there any way we could do

00:41:37.130 --> 00:41:44.109
something in person? I know that you probably want your identity secure and everything like

00:41:44.109 --> 00:41:52.240
that, and I want mine secure too, but I have a pretty large volume of Bitcoin and I need

00:41:52.240 --> 00:41:54.640
to move it weekly, blah, blah, blah.

00:41:54.640 --> 00:41:58.730
JACK: The trader wasn’t interested in a physical meetup. That’s just too risky.

00:41:58.730 --> 00:42:04.460
But he kept using them to do cash-in-mail trades. We’re talking $10,000 and $20,000

00:42:04.460 --> 00:42:10.490
trades, here. Yeah, imagine $20,000 in cash coming through the mail. Then he would turn

00:42:10.490 --> 00:42:14.410
around and send the Bitcoin for that, or maybe he’d send the Bitcoin first and then get

00:42:14.410 --> 00:42:19.109
the cash second. Either way, it sounds risky to me, which is why he got fed up with the

00:42:19.109 --> 00:42:23.599
process. He did this a few more times with this particular trader and then asked them

00:42:23.599 --> 00:42:28.700
again, look, is there any way we can just meet up in person and do this trade? They

00:42:28.700 --> 00:42:32.941
finally said yes. [MUSIC] They picked a spot about halfway between each other to do the

00:42:32.941 --> 00:42:37.971
meet and trade. It was at a public place, a grocery store where the tables are where

00:42:37.971 --> 00:42:42.881
you can eat. The plan was they would meet, he would pull out his computer or phone, transfer

00:42:42.881 --> 00:42:47.770
the Bitcoin, and then they would hand him the cash once it cleared. For this particular

00:42:47.770 --> 00:42:53.230
trade, we’re talking a $30,000 transaction. Once the transfer was complete, they would

00:42:53.230 --> 00:42:59.160
both part ways. So, he arrives at the grocery store. They message him saying what table

00:42:59.160 --> 00:43:04.190
they’re at. He goes up to the person sitting at the table, and it’s not who he expected.

00:43:04.190 --> 00:43:07.450
V: But this was like, completely shocking.

00:43:07.450 --> 00:43:09.030
JACK: It was a woman.

00:43:09.030 --> 00:43:15.460
V: I didn’t expect a woman in the first place, obviously. I expected some guy, a neck

00:43:15.460 --> 00:43:20.500
beard, or whatever. I’m gonna be honest, man; she was a pretty attractive woman in

00:43:20.500 --> 00:43:28.450
her maybe thirties and had kids and stuff. I guess she had a husband. But she was a pretty

00:43:28.450 --> 00:43:33.450
good looking woman, drove a Mercedes. Would never think that she knows anything about

00:43:33.450 --> 00:43:40.480
Bitcoin or the darknet or anything like that. Just looks like a well-to-do person from the

00:43:40.480 --> 00:43:44.599
state I was in, you know what I mean? You would never think twice. It was pretty crazy.

00:43:44.599 --> 00:43:48.770
JACK: This was an intense meeting, though. There’s some sweaty palms here for sure.

00:43:48.770 --> 00:43:53.010
I mean, thirty grand is going to be transferred between these two right now. He’s going

00:43:53.010 --> 00:43:58.230
to give her $30,000 in Bitcoin and she’s going to give him $30,000 in cash. Once you

00:43:58.230 --> 00:44:02.920
transfer Bitcoin to someone else, there’s no way to reverse it. A lot can go wrong here.

00:44:02.920 --> 00:44:06.420
She could just take the Bitcoin and run off, or she could give him the cash and then follow

00:44:06.420 --> 00:44:12.590
him to his car and steal it back. It’s nerve-wracking for sure. What are you gonna do, sit there

00:44:12.590 --> 00:44:16.470
and count out $30,000 on a table in a grocery store? That’s pretty suspicious. You just

00:44:16.470 --> 00:44:17.970
have to trust that it’s all there.

00:44:17.970 --> 00:44:24.600
V: It was a pretty high-profile exchange because there was a lot of trust that had to be between

00:44:24.600 --> 00:44:29.170
us, you know what I mean? I think she was scared of me a little bit and it freaked me

00:44:29.170 --> 00:44:33.420
out. It was just, fear was the motivator there.

00:44:33.420 --> 00:44:37.680
JACK: They’ve done business a few times in the past through the mail, so he gave it

00:44:37.680 --> 00:44:43.020
a shot and it worked. She got her Bitcoins, he got his cash, and they both drove home

00:44:43.020 --> 00:44:49.790
safe and sound. But this started a new relationship with her which turned out to be a weekly meeting.

00:44:49.790 --> 00:44:51.690
Every week they would do this exchange.

00:44:51.690 --> 00:44:54.940
V: Pretty much thirty grand a week, thirty to forty grand a week.

00:44:54.940 --> 00:44:58.460
JACK: Thirty to forty grand a week in a package. Wow.

00:44:58.460 --> 00:44:59.460
V: Yeah.

00:44:59.460 --> 00:45:00.460
JACK: That’s a lot of money.

00:45:00.460 --> 00:45:05.770
V: All $100 bills. Volume goes down in higher [00:45:00] denominations and stuff like that,

00:45:05.770 --> 00:45:06.840
but yeah, it was…

00:45:06.840 --> 00:45:11.339
JACK: Where do you think she was getting tons of cash over and over and over? Who comes

00:45:11.339 --> 00:45:13.310
up with thirty grand a week to give out?

00:45:13.310 --> 00:45:20.450
V: Well, she would – what she would do is, I would sell to her at a rate that was below

00:45:20.450 --> 00:45:25.759
market, so she’s basically getting Bitcoin – she’s getting the Bitcoin – I’m

00:45:25.759 --> 00:45:30.230
selling her the Bitcoin, right, and she’s gonna be like alright, I’ll give you the

00:45:30.230 --> 00:45:36.410
cash but I’m gonna give you market minus 6%, right? Then, so, what she does is now

00:45:36.410 --> 00:45:42.280
she’ll go back onto LocalBitcoins and sell that same Bitcoin that I just gave her, that

00:45:42.280 --> 00:45:49.920
I just sent her to her wallet, for 6% over market. Now she’s making 12% on the forty

00:45:49.920 --> 00:45:55.859
Bitcoin that I gave her. It’s a pretty good return. She’s just turning over cash constantly,

00:45:55.859 --> 00:46:01.380
so she’s got a constant cash flow, but pretty much like me except it was legitimate, I think,

00:46:01.380 --> 00:46:02.380
hopefully.

00:46:02.380 --> 00:46:07.470
JACK: Whoa. [MUSIC] Crazy what goes on out there, huh? I never knew these kind of meets

00:46:07.470 --> 00:46:13.980
and exchanges are taking place out there, but there you go. Oh, and V gave me her screen

00:46:13.980 --> 00:46:19.290
name, and I looked her up. She has an interesting reputation, actually. Her name actually appeared

00:46:19.290 --> 00:46:26.440
in the Silk Road court records. She was apparently a vendor there and got busted, so she switched

00:46:26.440 --> 00:46:31.200
to being a Bitcoin exchanger? Which apparently was going well but it’s kind of confusing

00:46:31.200 --> 00:46:37.500
that she was part of the Silk Road rollup but still actively doing this. I’m not sure

00:46:37.500 --> 00:46:40.730
what happened to her with Silk Road, but it was clear to him that she’d been doing this

00:46:40.730 --> 00:46:41.860
for a long time.

00:46:41.860 --> 00:46:46.550
V: Now somebody’s seen your face that – you’re bringing somebody new in and you don’t really

00:46:46.550 --> 00:46:54.809
know who they are, but it was necessary. At some times, yes, OpSec is very important and

00:46:54.809 --> 00:47:01.349
could I have sent somebody out there to handle the money or whatever? I tried it before and

00:47:01.349 --> 00:47:05.869
it didn’t go well. Some things you have to handle yourself and you kind of have to

00:47:05.869 --> 00:47:12.580
put faith wherever you put faith and hope that it goes okay. There’s times where you

00:47:12.580 --> 00:47:16.800
kind of have to expose yourself. At least in my instance – I don’t know. There’s

00:47:16.800 --> 00:47:22.240
people smarter than me that have successfully either laundered their Bitcoin or got it into

00:47:22.240 --> 00:47:27.490
cash some other way, but for me, that was the easiest way for me and I felt the most

00:47:27.490 --> 00:47:30.369
secure way at the time.

00:47:30.369 --> 00:47:36.099
JACK: Now things are really churning. He’s got the FE status on AlphaBay and he actually

00:47:36.099 --> 00:47:40.010
opened up as a vendor on Dream Market too at this point, and he’s got a great supplier

00:47:40.010 --> 00:47:45.040
of cocaine, he’s got a fair amount of orders coming in, and he’s got this Bitcoin exchanger

00:47:45.040 --> 00:47:49.940
delivering cash. Now, even though he’s getting thirty grand a week from all this, he wasn’t

00:47:49.940 --> 00:47:50.950
able to keep all that.

00:47:50.950 --> 00:47:59.420
V: There was overhead. We had to pay the shippers, we had to pay my buddy, I had to pay my higher

00:47:59.420 --> 00:48:07.859
up a percentage, my pocket maybe – honestly probably only three or four grand a week.

00:48:07.859 --> 00:48:11.770
JACK: That was for the first few months. By the time this thing really kicked up, he was

00:48:11.770 --> 00:48:19.089
pulling in more like $10,000 a week. With that amount of cash, he decided to buy a car.

00:48:19.089 --> 00:48:25.060
V: I mean, we had a dealership that – well, my higher up had a dealership. He knew everybody

00:48:25.060 --> 00:48:32.309
in the city we were in and he knew all the people there. They were into some stuff that

00:48:32.309 --> 00:48:34.349
was not so clean.

00:48:34.349 --> 00:48:36.839
JACK: He bought a BMW at this place.

00:48:36.839 --> 00:48:43.940
V: I was able to get a Beamer through them, but most of the money I kept. I had better

00:48:43.940 --> 00:48:47.280
weeks than that, I had worse weeks that that. Most of the money, you can’t really put

00:48:47.280 --> 00:48:51.990
this in there, but most of the money – I didn’t really spend anything. It was just,

00:48:51.990 --> 00:48:56.380
it kinda just went into my pocket and stayed there. I paid rent and everything but that

00:48:56.380 --> 00:48:59.020
was pretty much it, and I bought a car. That was it.

00:48:59.020 --> 00:49:02.420
JACK: While he was busy with his business, he would occasionally visit his parents.

00:49:02.420 --> 00:49:08.710
V: But I would still – I was still only about an hour and a half from my parents.

00:49:08.710 --> 00:49:17.829
[MUSIC] I would come home and I’d be like – they would be like, what are you up to?

00:49:17.829 --> 00:49:21.530
Because they knew that I was living in another city and they were like well, what are you

00:49:21.530 --> 00:49:27.600
doing? I was like well, I’m – I started trading Bitcoin. This was after the bubble.

00:49:27.600 --> 00:49:33.040
JACK: He’s talking about the Bitcoin bubble in November, 2013. This is where Bitcoin rose

00:49:33.040 --> 00:49:38.760
all the way to $1,000 per Bitcoin. But for the next two years after that Bitcoin kinda

00:49:38.760 --> 00:49:45.059
went down to $200 – $#500 per coin, and this was the time when he was doing all this.

00:49:45.059 --> 00:49:48.770
Oh and keep in mind, he’s still just twenty-two years old at this point.

00:49:48.770 --> 00:49:53.360
V: Bitcoin was a household name at that point and I was like yeah, I’m trading Bitcoin

00:49:53.360 --> 00:50:01.670
on this – on LocalBitcoins or whatever and I’m making a 7% profit on every trade that

00:50:01.670 --> 00:50:05.920
I make or whatever. But I was like, I have all that stuff that I [00:50:00] need. They

00:50:05.920 --> 00:50:12.849
were like, okay. At first, they were like, okay. Eventually my mom kinda caught on because

00:50:12.849 --> 00:50:22.470
she’s smart. I had come home one time with a new BMW and my mom was pretty much like

00:50:22.470 --> 00:50:27.750
hey, let’s go to dinner. Let’s go to a popular city and let’s go have some dinner

00:50:27.750 --> 00:50:35.480
somewhere. I was like, okay. She takes me down, we get a bottle of wine and then another

00:50:35.480 --> 00:50:40.120
bottle of wine, and my mom doesn’t drink. I’ve never really sat down and drank with

00:50:40.120 --> 00:50:47.480
my mom or gotten drunk with my mother. She’s not like that. She’s not that type of person.

00:50:47.480 --> 00:50:51.170
But the situation I guess called for it at the time and she was like, so what are you

00:50:51.170 --> 00:50:53.369
really doing? I was like, what do you mean? I’m selling Bitcoin.

00:50:53.369 --> 00:50:57.870
She was like, no you’re not. I know you’re not doing that. What’s up? What are you

00:50:57.870 --> 00:51:03.410
doing in the city that you’re in? I was like – eventually, I knew that she knew

00:51:03.410 --> 00:51:09.390
and I just kinda spilled the beans. I said I’m selling cocaine on the internet. She

00:51:09.390 --> 00:51:12.750
was like, what do you mean you’re selling cocaine on the internet? She didn’t know

00:51:12.750 --> 00:51:18.780
how any of that worked. I was like, I’m being very safe and I – this is the best

00:51:18.780 --> 00:51:28.380
way that I know how to do it and I’m making good money. I never said I liked it or anything

00:51:28.380 --> 00:51:33.640
like that but I was like, I need money and this is what I’m doing for money. She kinda

00:51:33.640 --> 00:51:43.660
calmly took that in and was like, you need to stop doing that soon. I said, okay. She

00:51:43.660 --> 00:51:49.250
said, you need to stop doing that by – and then she gave me a month, like a month that

00:51:49.250 --> 00:51:50.970
I should stop by.

00:51:50.970 --> 00:51:56.500
I was like okay, I’ll stop. But she didn’t react in the way that I expected her to react.

00:51:56.500 --> 00:52:01.180
I expected her to freak out and be like, what the hell are you doing? You’re being an

00:52:01.180 --> 00:52:06.320
idiot. You just got arrested. But she didn’t react like that at all. It was more like okay,

00:52:06.320 --> 00:52:12.490
I understand, but this is a risk that you don’t need right now, so stop at this point.

00:52:12.490 --> 00:52:21.750
But I think I had told her the details that were kind of so above her head – it was

00:52:21.750 --> 00:52:26.079
a sophisticated operation, you know what I mean? It wasn’t like something that – it

00:52:26.079 --> 00:52:29.720
wasn’t like I was selling cocaine on the street corner or something like that. It was

00:52:29.720 --> 00:52:36.520
something that was very organized and run like a business, you know? I don’t think

00:52:36.520 --> 00:52:41.369
she worried as much as she probably should have, but it made me more comfortable, that’s

00:52:41.369 --> 00:52:42.369
for sure.

00:52:42.369 --> 00:52:45.660
JACK: [MUSIC] He didn’t stop. I’m not sure if he had any intentions of stopping

00:52:45.660 --> 00:52:50.200
because this was great money. Every month the number of orders would grow and grow,

00:52:50.200 --> 00:52:54.290
starting from ten orders a month to thirty orders a month, and soon hundreds of orders

00:52:54.290 --> 00:52:59.290
a month. He was selling cocaine by the gram, the eighth, and in quarters. Sometimes he

00:52:59.290 --> 00:53:03.490
would sell whole ounces. But the margins just didn’t make sense for him to do that all

00:53:03.490 --> 00:53:07.579
the time. Sometimes he would sell heroin, too. He was establishing some direct sales

00:53:07.579 --> 00:53:12.329
with people, not through darknet marketplaces; just directly through secure e-mail. Business

00:53:12.329 --> 00:53:13.329
was booming.

00:53:13.329 --> 00:53:19.160
V: I think at our highest point we were shipping out – I think our best day was maybe forty

00:53:19.160 --> 00:53:26.030
or forty-five packages which was a lot. That’s a lot of labels, a lot of vacuum sealing,

00:53:26.030 --> 00:53:38.590
a lot of Mylar. That was a milestone for us. That was like, we made it, you know?

00:53:38.590 --> 00:53:43.030
JACK: Alright, so why’d you stop?

00:53:43.030 --> 00:53:53.750
V: I really stopped because at that point – we had just gotten to the point where

00:53:53.750 --> 00:54:01.700
I was burnt out, my shippers were burnt out. I started getting paranoid, the price of cocaine

00:54:01.700 --> 00:54:10.810
was all over the place. My buddy had left so I was kinda on my own. I just thought it

00:54:10.810 --> 00:54:18.750
was kind of a good time to wrap up shop. My higher up wasn’t happy with that decision

00:54:18.750 --> 00:54:28.609
but respected it in the end. It was just the stress and the paranoia level. I was like,

00:54:28.609 --> 00:54:36.010
something’s gonna happen to me. I don’t want to do this anymore. It became not exciting;

00:54:36.010 --> 00:54:43.470
it became more of a chore than it was something new and exciting at that point, you know?

00:54:43.470 --> 00:54:53.819
It wasn’t anything that was really exciting to me anymore. So, I decided to hang up my

00:54:53.819 --> 00:54:54.819
hat.

00:54:54.819 --> 00:54:58.270
JACK: He took down his listings on all the darknet markets, shipped out all his last

00:54:58.270 --> 00:55:04.670
orders, and shut down his vendor account. Then he did one last cash-in on all his Bitcoins

00:55:04.670 --> 00:55:08.829
and stopped [00:55:00] dealing on darknet markets. Did you move back home with your

00:55:08.829 --> 00:55:12.930
parents or what happened after? You had an apartment there just for that, so where’d

00:55:12.930 --> 00:55:13.930
you go?

00:55:13.930 --> 00:55:20.230
V: Yeah, I kept the apartment. I stayed in the apartment. I kinda just hung out with

00:55:20.230 --> 00:55:24.890
friends that I had there for a while. I did move back home for a brief period.

00:55:24.890 --> 00:55:28.829
JACK: What was the plan? What were you gonna do next?

00:55:28.829 --> 00:55:35.190
V: Actually, my sentencing was coming up for that original case that I talked about.

00:55:35.190 --> 00:55:38.210
JACK: Oh jeez, they still haven’t – you still didn’t get sentenced?

00:55:38.210 --> 00:55:39.810
V: It hadn’t been resolved.

00:55:39.810 --> 00:55:41.080
JACK: Oh, my god.

00:55:41.080 --> 00:55:45.039
V: That was another reason that I had stopped. I forgot to include that, but I was potentially

00:55:45.039 --> 00:55:53.460
going to prison. There was no way that I was gonna be able to operate from prison if I

00:55:53.460 --> 00:56:03.460
went, so I shut down for that reason as well. I think that February, I had a sentencing

00:56:03.460 --> 00:56:15.380
date or something and I actually got arrested again driving really fucked up. [MUSIC] I

00:56:15.380 --> 00:56:21.530
was driving, I had just dropped off money to my higher up again ‘cause we were still

00:56:21.530 --> 00:56:29.660
doing some street-level stuff. I dropped off money for a kilo or something like that. I

00:56:29.660 --> 00:56:36.420
was just really messed up on pills; Xanax and just all this shit that I had been taking

00:56:36.420 --> 00:56:42.960
because my stress level was out of control. The stress was high because I had an upcoming

00:56:42.960 --> 00:56:48.190
sentencing date, I had no idea what was really gonna happen, if I was going to prison or

00:56:48.190 --> 00:56:56.510
not. I was paranoid about the vendor account, I wasn’t sure if my OpSec was good enough,

00:56:56.510 --> 00:57:01.770
I wasn’t sure if maybe – I had just read an indictment on somebody recently, I think

00:57:01.770 --> 00:57:10.670
at the time when the feds were basically intercepting packages, acting as buyers, and I was paranoid

00:57:10.670 --> 00:57:12.690
that maybe that had happened to me.

00:57:12.690 --> 00:57:18.760
There were a string of packages that went missing in the postal system and I was worried

00:57:18.760 --> 00:57:31.289
about that. Just all of that combined with overall anxiety, it was just a lot. To combat

00:57:31.289 --> 00:57:41.220
that, I took a large volume of depressants and similar to Xanax and Percocets and Oxys

00:57:41.220 --> 00:57:49.010
and all of that, so yeah, the stress level was super high at that time. I was driving

00:57:49.010 --> 00:57:55.520
back and I kinda fell asleep at the wheel and crashed into the median, got out of my

00:57:55.520 --> 00:58:00.950
car and looked at it, and my one wheel was hanging off and I was like, this is totally

00:58:00.950 --> 00:58:07.860
– I can totally drive this home. So, I got back in the car and started driving again,

00:58:07.860 --> 00:58:14.369
and I heard the lights behind me, pulled over. I had a hundred Xanax pills in my pocket and

00:58:14.369 --> 00:58:19.319
they didn’t believe that they were for personal use, so they charged me with another felony,

00:58:19.319 --> 00:58:27.059
booked me. Judge said no bail because I had another pending case, and got locked up for

00:58:27.059 --> 00:58:31.339
basically six months total on the original case that I had plus this one.

00:58:31.339 --> 00:58:37.859
JACK: The ride was over, I guess. Locked up at twenty-three. In total, he spent a year

00:58:37.859 --> 00:58:43.789
as a darknet marketplace vendor. What’s ironic here is that the police had no idea

00:58:43.789 --> 00:58:49.180
he was a former vendor. He was locked up for his previous charge of selling drugs in college

00:58:49.180 --> 00:58:55.349
and driving while intoxicated. His OpSec apparently was good enough to not get caught for all

00:58:55.349 --> 00:59:00.610
the stuff he did. Selling cocaine either online or in the streets is a major crime in the

00:59:00.610 --> 00:59:02.109
US.

00:59:02.109 --> 00:59:10.520
V: [MUSIC] I got out of county. I went to county prison. I got out of county prison

00:59:10.520 --> 00:59:17.390
and immediately – voluntarily, I flew out west to a rehab center. I was still on probation

00:59:17.390 --> 00:59:20.930
and under the condition of that probation, I had to fly back every forty-five days to

00:59:20.930 --> 00:59:26.559
check in with my probation officer. It was very stupid, but that was one of the conditions.

00:59:26.559 --> 00:59:31.250
So, every forty-five days, I would fly back from the rehab center I was at and check in

00:59:31.250 --> 00:59:39.470
with her, come back to the state I was in and continue rehab treatment. This had gone

00:59:39.470 --> 00:59:44.740
fine the two times I had done it already. My third time, I fly back home, I get in late

00:59:44.740 --> 00:59:51.580
night, and in the morning my mother drives me to the probation office in the state that

00:59:51.580 --> 00:59:59.220
I have probation in. She parked the car, I get out, I go inside, and the probation officer

00:59:59.220 --> 01:00:05.329
is like hey, we’re gonna go down this hallway, actually. I said okay, [01:00:00] ‘cause

01:00:05.329 --> 01:00:11.589
her room is right there on the right, so I was like, this is weird. I wonder what’s

01:00:11.589 --> 01:00:18.480
going on. We go down the hall and she’s like alright, come this way with me. We turned

01:00:18.480 --> 01:00:19.480
left.

01:00:19.480 --> 01:00:25.810
I walk into this conference room and there’s two ATF agents there. Then they handcuff me,

01:00:25.810 --> 01:00:34.190
put me in the seat, and they were like, we know who you are. We just arrested your higher

01:00:34.190 --> 01:00:42.799
up months ago and they kinda laid out printouts of my AlphaBay listings. They said the vendor

01:00:42.799 --> 01:00:49.859
name that I had. They were like, we know you’re this vendor name. They had printouts of my

01:00:49.859 --> 01:00:55.740
cocaine listings, they had printouts of the heroin listings, they kinda had me pretty

01:00:55.740 --> 01:01:03.940
much dead to rights. They had a stupid video that my higher up had on his phone, and it

01:01:03.940 --> 01:01:08.190
was just – they were just like, you can either give up your phone right now or we

01:01:08.190 --> 01:01:13.420
can get a warrant for it, so I gave my phone to them. As I was sitting there, I was like,

01:01:13.420 --> 01:01:20.089
there’s only one person who could have given them this level of access to this information,

01:01:20.089 --> 01:01:25.780
and I knew who it was. It was my higher up, and I was like – at that moment, I was like,

01:01:25.780 --> 01:01:29.180
it’s – he absolutely just destroyed me.

01:01:29.180 --> 01:01:35.250
JACK: Now, his higher up was the guy who was giving him all the cocaine to sell. V knew

01:01:35.250 --> 01:01:40.770
this guy ratted him out because of a call he got from his higher up a month earlier.

01:01:40.770 --> 01:01:47.730
V: He had called me when I was in rehab and was like hey, I got indicted and I’m on

01:01:47.730 --> 01:01:51.000
the run right now. I was like, what do you mean you’re on the run? They were like well,

01:01:51.000 --> 01:01:55.200
they let me out because – at the time, I didn’t really know how the federal system

01:01:55.200 --> 01:02:02.369
worked, but they had let him out because he had agreed to talk. They let him out and he

01:02:02.369 --> 01:02:07.150
went on the run to up north somewhere and didn’t come back for months. He was like

01:02:07.150 --> 01:02:11.220
yeah, I’m on the run right now. [MUSIC] Be careful. They have my phone. I don’t

01:02:11.220 --> 01:02:17.380
really know what’s on it. I was like, holy shit man, why are you – I hung up the phone

01:02:17.380 --> 01:02:24.089
and I messaged him on a messaging app and I was like, why would you call me? This is

01:02:24.089 --> 01:02:29.200
so fucked up. I’m scared, you know what I mean? At that point, I kinda – in the

01:02:29.200 --> 01:02:37.310
back of my mind I kinda knew I was fucked because it was not a good situation. They

01:02:37.310 --> 01:02:40.880
had told me when I was back in this conference room, they’re like, we have your higher

01:02:40.880 --> 01:02:42.210
up.

01:02:42.210 --> 01:02:50.819
They don’t specifically say he’s – he gave information that led to you because they

01:02:50.819 --> 01:02:58.380
won’t say that, but you can kinda put the pieces together. I decided to cooperate with

01:02:58.380 --> 01:03:02.710
the government and – ‘cause they were looking for a lot of information related to

01:03:02.710 --> 01:03:09.530
him because he had a lot of street stuff going on. I decided to cooperate with them and give

01:03:09.530 --> 01:03:15.880
them what I knew. It kinda started from there. My mom came in. I asked them if I could see

01:03:15.880 --> 01:03:19.641
my mom because I wasn’t sure if I was ever gonna see my mother again, honestly, because

01:03:19.641 --> 01:03:23.920
I wasn’t sure when I was gonna get out or if I would get out or how bail worked or anything

01:03:23.920 --> 01:03:33.980
like that in the federal system. My mom came in, went white as a ghost, started bawling

01:03:33.980 --> 01:03:42.530
her eyes out, and it was a super traumatic situation and super uncomfortable. I told

01:03:42.530 --> 01:03:51.740
my mom I love you and things are gonna be alright. They took me in the car, they drove

01:03:51.740 --> 01:04:00.940
me back to the state that the indictment came out of, and basically I had an arraignment

01:04:00.940 --> 01:04:07.829
hearing. The judge knew – well, the main prosecutor knew that I was willing to cooperate

01:04:07.829 --> 01:04:17.329
so they let me out that day which was bizarre, with an ankle monitor.

01:04:17.329 --> 01:04:26.210
That was pretty much it that day. It felt like a dream. I remember going out to dinner

01:04:26.210 --> 01:04:31.890
with my parents that night because we were celebrating that they had let me out. The

01:04:31.890 --> 01:04:37.830
next day it hit me like wow, I’m really in the hole here, you know what I mean? I

01:04:37.830 --> 01:04:45.440
gotta do a lot to get this sentence down because then, I was looking at actually a ten-year

01:04:45.440 --> 01:04:54.330
mandatory minimum because I had prior cases and I had that criminal history, and I had

01:04:54.330 --> 01:05:01.480
a five-year mandatory minimum for the cocaine distribution. They charged me with conspiracy

01:05:01.480 --> 01:05:07.200
to distribute 500 grams or more of cocaine. [01:05:00] They didn’t charge me with any

01:05:07.200 --> 01:05:11.609
heroin and I think if I had chosen not to cooperate with them, they would have hit me

01:05:11.609 --> 01:05:20.410
with that charge as well. I got lucky there. But still, I was looking at ten years. They

01:05:20.410 --> 01:05:22.490
made it clear to me like, you’re looking at ten years.

01:05:22.490 --> 01:05:29.390
JACK: V didn’t want to go to prison for ten years. He decided to cooperate with the

01:05:29.390 --> 01:05:34.710
feds which means he was going to start snitching. Besides not wanting to go to prison, he felt

01:05:34.710 --> 01:05:38.710
like his higher up snitched on him first, so he was just gonna snitch back.

01:05:38.710 --> 01:05:44.940
V: [MUSIC] Basically, the way it works in the federal system, you can’t – it’s

01:05:44.940 --> 01:05:49.640
very black and white. If you tell, even if somebody told on you first and you’re just

01:05:49.640 --> 01:05:54.029
telling on them and their operation, you’re both snitches, right? It doesn’t matter

01:05:54.029 --> 01:06:00.490
if the first person told first and you were caught in the – you were caught in that.

01:06:00.490 --> 01:06:06.619
If you snitch as well, you’re also a snitch. There’s no mitigating factors like oh, well,

01:06:06.619 --> 01:06:11.119
you’re less of a snitch than this guy because he screwed you over first. It doesn’t work

01:06:11.119 --> 01:06:20.039
like that. So yes, I consider myself a snitch. It’s not something that I consider damaging

01:06:20.039 --> 01:06:24.050
to my moral character. It’s not something that I wake up and I’m like oh, jeez, I

01:06:24.050 --> 01:06:31.499
wish I hadn’t snitched on the guy that snitched on me, like wow, that’s so terrible of me.

01:06:31.499 --> 01:06:40.660
The guy screwed me over and I did what I had to do. Did I maybe put people that were not

01:06:40.660 --> 01:06:48.700
super connected towards him away? Most likely, but you do whatever it takes to get out as

01:06:48.700 --> 01:06:53.849
soon as possible. I think that a lot of people don’t understand that.

01:06:53.849 --> 01:06:59.720
If you’re looking at ten years, you can say from your chair, if you’re not a criminal,

01:06:59.720 --> 01:07:04.730
like oh, you should have taken that time, man, you should have taken that on the chin.

01:07:04.730 --> 01:07:10.400
Unless you’re in it, man, and you see ten years flash before your eyes, then you can

01:07:10.400 --> 01:07:15.490
say something. Like yeah, I took that on the chin. But if you’re not in the game and

01:07:15.490 --> 01:07:19.109
you’re like oh, well, you shouldn’t have snitched or whatever, I don’t want to hear

01:07:19.109 --> 01:07:22.859
it from you. You know what I mean? It’s just not the same. You’re not in the game

01:07:22.859 --> 01:07:28.450
so you don’t get to form an opinion on that. That’s just my – that’s just the way

01:07:28.450 --> 01:07:34.299
I look at it. A lot of the stuff they had me do was sit down for proffer sessions and

01:07:34.299 --> 01:07:38.950
they would ask me questions based on the individual they were looking for. They would be like,

01:07:38.950 --> 01:07:46.980
do you know who this or that is? I would say yes or no. They would show photographs and

01:07:46.980 --> 01:07:53.220
they would say like, did he – was he present at this time on this day? I either answered

01:07:53.220 --> 01:07:59.790
yes or no. The people that I was able to identify and the people that I was close with, these

01:07:59.790 --> 01:08:05.450
were all people that were highly connected to my higher up.

01:08:05.450 --> 01:08:15.300
Like I said, my choice to cooperate was based on his cooperation and his willingness to

01:08:15.300 --> 01:08:25.060
just take me down without blinking an eye. I chose to cooperate on that basis, but also

01:08:25.060 --> 01:08:29.989
even if he hadn’t, I most likely probably would have because self-preservation would

01:08:29.989 --> 01:08:37.049
have kicked in there. I don’t want to make any excuse for that; I only snitched because

01:08:37.049 --> 01:08:41.009
he snitched on me first. I don’t think that was the case. I think that I probably would

01:08:41.009 --> 01:08:46.070
have done that regardless. The people that I did know and that I was close to and that

01:08:46.070 --> 01:08:51.089
I still had a number for and that I met up with previously, some of those people the

01:08:51.089 --> 01:09:01.569
feds were super interested in and wanted me to set up basically a controlled buy. So,

01:09:01.569 --> 01:09:08.949
one of the shippers for another operation that my partner had or my higher up had, I

01:09:08.949 --> 01:09:13.130
was actually – I actually knew him pretty well ‘cause he had worked for me at one

01:09:13.130 --> 01:09:19.049
point. He was selling weed, I guess, and they were like yeah, why don’t you go buy some

01:09:19.049 --> 01:09:20.350
weed from him?

01:09:20.350 --> 01:09:29.830
[MUSIC] They wired me up. They gave me – they put in my wallet this microphone, but it looked

01:09:29.830 --> 01:09:35.270
like a credit card. It was like a credit card that goes in your wallet, but it has three

01:09:35.270 --> 01:09:42.460
little dots on it. It’s super clear audio. I went in there and I bought – I was like

01:09:42.460 --> 01:09:48.120
hey, what’s up, man? Everything was cool. I bought weed from him and I brought it out.

01:09:48.120 --> 01:09:54.199
They log everything, every purchase that they make ‘cause they give you cash to buy the

01:09:54.199 --> 01:10:00.881
drugs with, but that’s all coming out of the budget and stuff like that. It was just

01:10:00.881 --> 01:10:10.260
a super – I felt like [01:10:00] I was in almost like a weird movie, you know what I

01:10:10.260 --> 01:10:16.270
mean? I had these guys picking me up at my house and taking me to do these either sit-downs

01:10:16.270 --> 01:10:24.620
where I was wired up or controlled buys or whatever they needed me to do just to get

01:10:24.620 --> 01:10:28.820
my sentence reduced as much as I could. I did whatever it took.

01:10:28.820 --> 01:10:34.570
JACK: Now, while the feds told him he’s looking at a minimum of ten years in prison,

01:10:34.570 --> 01:10:38.030
I think that probably wasn’t true. He probably would have got something like five years,

01:10:38.030 --> 01:10:43.560
but that’s just a strategy that the feds use to try to get you to cooperate. He was

01:10:43.560 --> 01:10:47.719
living at home during all this and was able to convince the ATF and FBI that he needed

01:10:47.719 --> 01:10:53.580
his ankle monitor removed in order to do these controlled buys. They agreed and took it off.

01:10:53.580 --> 01:10:56.850
V: I cooperated for a good eight months.

01:10:56.850 --> 01:11:02.390
JACK: Now I was able to look up his criminal record online. And it’s interesting because

01:11:02.390 --> 01:11:07.220
a lot of his court records are sealed, meaning they aren’t visible to the public. And I

01:11:07.220 --> 01:11:11.200
always had a hunch that the reason they seal court documents is because the person has

01:11:11.200 --> 01:11:15.010
flipped and is working with the feds. And they don’t want anyone knowing this guy

01:11:15.010 --> 01:11:19.989
is actively snitching. Anyway, Eventually the feds got enough information out of him,

01:11:19.989 --> 01:11:24.680
and brought him before the judge for the sentencing. He was given a split sentence. He had to spend

01:11:24.680 --> 01:11:32.160
6 months in prison, 12 months of house arrest, and 4 years of supervised released. Also he

01:11:32.160 --> 01:11:37.620
had to pay a $100 fine. So he went back to prison for the 2nd time in his life.

01:11:37.620 --> 01:11:44.020
V: [MUSIC] It’s a very strange environment. I think that prison taught me that you have

01:11:44.020 --> 01:11:52.070
to look out for yourself at all times. You have to keep your head down, stay healthy.

01:11:52.070 --> 01:11:58.239
Take care of yourself is the number one advice I would give to anybody, you know what I mean?

01:11:58.239 --> 01:12:03.989
Don’t trust anyone. I did a very short sentence so I was able to skate by by just keeping

01:12:03.989 --> 01:12:09.090
my head down and not really talking to anybody that I – that didn’t need to be spoken

01:12:09.090 --> 01:12:16.590
to. I would say that it changed me in the way that you’re always around people 100%

01:12:16.590 --> 01:12:23.199
of the time. You have to be watching your back 100% of the time. Yeah, did it harden

01:12:23.199 --> 01:12:27.570
me up? I don’t think so. I don’t think I was in there long enough. If I was in there

01:12:27.570 --> 01:12:32.510
for a longer period of time, I think I would have been permanently changed, yeah.

01:12:32.510 --> 01:12:37.630
JACK: When he got out of prison, he was basically under house arrest with an ankle monitor on

01:12:37.630 --> 01:12:40.600
at all times so his probation officer could see where he was.

01:12:40.600 --> 01:12:46.120
V: Basically, the way that worked was you could get out for – I had gym hours, I had

01:12:46.120 --> 01:12:55.050
school hours, I had some other stuff in there. If you had a doctor’s appointment you would

01:12:55.050 --> 01:13:06.950
get out, but overall, that went pretty smooth, but slow. I actually got off early. I wasn’t

01:13:06.950 --> 01:13:12.510
supposed to get off the ankle monitor for a couple more months and I got off of it because

01:13:12.510 --> 01:13:21.970
of corona. My probation officer actually called me and was like hey – just a random day

01:13:21.970 --> 01:13:26.949
– he was like hey, I’m taking you off the ankle monitor. I was like – I asked

01:13:26.949 --> 01:13:32.320
him why. He’s like, do you want me to keep it on? I was like, no. He was like, alright,

01:13:32.320 --> 01:13:38.450
just take some scissors and cut off the ankle monitor. I was like, okay. At first I was

01:13:38.450 --> 01:13:42.590
like, sweet; I’m not on an ankle monitor anymore. Then I realized I still couldn’t

01:13:42.590 --> 01:13:50.070
go anywhere because it was corona and everything was shut down. The same rules kind of applied.

01:13:50.070 --> 01:13:56.320
It was actually almost even worse because school moved virtual and all of that. I’ve

01:13:56.320 --> 01:14:00.100
been in the house a lot more than I was when I was on the ankle monitor.

01:14:00.100 --> 01:14:04.739
JACK: I guess if you ever want to know what it’s like having probation or house arrest,

01:14:04.739 --> 01:14:08.410
this year has taught us what that’s like. Everything was shut down this whole year and

01:14:08.410 --> 01:14:12.719
we couldn’t go out or do anything. I guess that makes it an easy year to serve probation

01:14:12.719 --> 01:14:13.760
through though, huh?

01:14:13.760 --> 01:14:22.219
V: I’m actually on probation for a couple more years, but I don’t – I’m not gonna

01:14:22.219 --> 01:14:28.090
be on for as long as I thought I was gonna be on for. Yeah, in the next couple of years

01:14:28.090 --> 01:14:32.450
I’ll be off, but I’m still on probation so I still talk to a PO and everything. But

01:14:32.450 --> 01:14:41.719
the hardest part is definitely behind me. I do what I – I try my best to repair the

01:14:41.719 --> 01:14:46.760
damage that I’ve done, you know? I know that the choices I made were not good choices

01:14:46.760 --> 01:14:51.210
and I hurt a lot of people. One of the questions that I got a lot on the – I just want to

01:14:51.210 --> 01:14:53.920
address this, but one of the questions that I got a lot on the AMA…

01:14:53.920 --> 01:14:57.699
JACK: Oh, so you might be wondering how I found this guy. Yeah, he popped into Reddit

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one day and made a post saying I’m a former darknet market drug dealer. Ask me anything.

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So, I immediately asked him hey, can I interview you to hear the whole story? So, here we are.

01:15:07.550 --> 01:15:14.440
V: One of the questions that I got a lot on the AMA – they weren’t really [01:15:00]

01:15:14.440 --> 01:15:17.416
questions, but they were like, how do you feel knowing that you ruined people’s lives?

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You sold heroin and most likely killed people or potentially could have killed people. I

01:15:18.920 --> 01:15:26.060
want to make it clear that I regret what I did and I don’t try to glorify any of my

01:15:26.060 --> 01:15:28.090
actions or my activities or anything like that. There was no reason for me to have done

01:15:28.090 --> 01:15:31.950
what I did. I definitely regret selling heroin on the darknet. I also want to make it clear

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that I respect people’s ability to make a choice, right? There’s two people on the

01:15:34.540 --> 01:15:39.670
end of that situation. The other thing I would say is that purchasing drugs on the darknet

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is not an impulsive decision, right? There’s a lot of steps that have to be taken before

01:15:45.530 --> 01:15:48.250
you’re able to actually press that Buy button.

01:15:48.250 --> 01:15:53.300
Then once you press that Buy button, there’s another two to seven days or even longer before

01:15:53.300 --> 01:15:54.300
you get your product, so it’s not like you’re getting in the car, you’re driving down

01:15:54.300 --> 01:15:56.340
to the block, and you’re picking up a bag of heroin or whatever. It’s completely different.

01:15:56.340 --> 01:16:04.560
The people that have access to this, that have access to the dark web, that have access

01:16:04.560 --> 01:16:06.230
to $200/gram heroin are not people that, in my mind, are really hard-up. I just don’t

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see it the same way that other people do. It’s a lot safer buying from – buying

01:16:08.850 --> 01:16:10.360
stuff on the darknet than it would be buying stuff on the street, and that’s almost true

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100% of the time. That’s what I would say. I don’t glorify my actions. I regret what

01:16:13.260 --> 01:16:19.160
I did, but at the same time, I’m here to share a story. I’m here to kind of enlighten

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people to what the federal system is like, to what it was like for me during the time

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that I was actually vending. I just wanted to put my story out there. It had nothing

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to do with glorifying what I did. That was never my intention ever.

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OUTRO: [OUTRO MUSIC] A big thank you to v for sharing your story with us. If you’re

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interested in contacting V, his email address is in the show notes or at darknetdiaries.com.

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I call this show Darknet Diaries not because it’s focused on the darknet but because

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I like to think of the darknet as all this secret and hidden stuff that happens online,

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stuff we weren’t ever supposed to see or know about. That’s why I don’t just cover

01:16:52.760 --> 01:16:56.880
stories about the darknet. But hey, this is actually the third episode I’ve done about

01:16:56.880 --> 01:17:01.690
darknet markets and if you want to hear more about them, check out Episode 24, Operation

01:17:01.690 --> 01:17:07.581
Bayonet which is about AlphaBay, and check out Episode 58 which is called OxyMonster.

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That’s about another vendor. The other day, someone told me they were listening to this

01:17:11.030 --> 01:17:15.810
show while going for a run, but they got so sucked into it that they ended up running

01:17:15.810 --> 01:17:18.400
farther than Forrest Gump did.

01:17:18.400 --> 01:17:23.910
If you love this show that much, consider donating to it to help keep the WiFi on. Please

01:17:23.910 --> 01:17:29.730
visit patreon.com/darknetdiaries to become a member. Oh, and as a thank you, you’ll

01:17:29.730 --> 01:17:34.390
get bonus episodes and an ad-free feed. This show is made by me, the guy who’s always

01:17:34.390 --> 01:17:39.710
on dark mode, Jack Rhysider. Sound design this episode was by Andrew Meriwether who

01:17:39.710 --> 01:17:44.510
loves staring at dry paint. Editing help this episode is by the market-manipulator, Damienne,

01:17:44.510 --> 01:17:49.300
and our theme music is by the botnet known as Breakmaster Cylinder. Even though I upgraded

01:17:49.300 --> 01:17:57.300
the RAM in my computer just so I could run Slack, this is Darknet Diaries.