BALTIMORE (WJZ) — Ryan Farace, 34, of Reisterstown, Md., pleaded guilty Tuesday to drug distribution and money laundering conspiracies.
The charges come from a scheme to manufacture and distribute alprazolam tablets, which are usually sold under the brand name “Xanax,”, through sales on the dark web in exchange for Bitcoin, according to the U.S. Attorney’s Office, District of Maryland.
Farace and his co-conspirator, Robert Swain, laundered the drug proceeds through financial transactions, designed to conceal the source and ownership of the illegal funds.
Swain, 34, of Freeland, Md., pleaded guilty Tuesday to the money laundering conspiracy.
According to their plea agreements, between November 2013 through June 2017, Farace purchased narcotics manufacturing equipment, including pill presses and counterfeit “Xanax” pill molds, to make the alprazolam powder into a tablet or pill to resemble genuine Xanax pills.
He solicited orders for the pills on dark web marketplaces and sold them to buyers directly in exchange for Bitcoin.
Farace admitted that he talked to his customers through encrypted e-messages and shipped the pill orders through U.S. mail. He used pre-paid debit cards that Farace got in the names of other people. Law enforcement recovered fake driver’s licenses in the names of those people.
Between December 2013 and March 2017, Farace distributed more than 920,000 alprazolam pills, based on the data recovered.
From at least July 2015 through February 2017, Farace and Swain conspired with others to launder the proceeds of the illegal drug sales.
Swain admitted to helping Farace open post office boxes and to driving with Farace to New Jersey to exchange the digital currency Bitcoin for $200,000 cash.
Federal authorities seized $5,665,000 as well as 4,000 Bitcoin, which translates to roughly $26,099,640, from Farace, as well as his residence, cash, digital currency and bank accounts, vehicles, electronics, jewelry and other items seized by law enforcement in January.
Swain must forfeit at least $30,000 and all of the digital currency in his name.
Farace faces a maximum sentence of five years in prison for conspiracy to manufacture, distribute and possess with the intent to distribute the pills. Farace and Swain face a maximum of 20 years in prison for money laundering conspiracy.
Sentencing hearings for Farace and Swain are on November 30, 2018 and January 25, 2019, respectively.