Prolific dark web vendor “Insta” has been arrested by the DEA after a prolonged investigation.
According to the indictment Vincent Cuomo, Abraham Elliott, Paul Engstrom, and Joseph Krieger all conspired to distribute large quantities of cocaine through the mail. The DEA investigators said that the defendants operated a vendor account on the dark web with the username “Insta.”
According to a criminal complaint on October 2020, the Drug Enforcement Administration (DEA) started investigating all four defendants for their roles in a cocaine trafficking operation. At the start, the DEA did not associate the defendants with any darkweb account. The DEA has not specified what triggered the investigation. The DEA said that Engstrom, who was the DEA’s primary target, had a previous conviction for distributing drugs in Nevada. The complaint indicates that “large cryptocurrency for cash transactions” led the DEA to Engstrom.
The DEA conducted physical surveillance of the defendants, they learned their habits and followed them to different locations in Nevada, which included a Walmart and a Post Office. In one surveillance session, the DEA watched Krieger and Elliott meet up in a parking lot and transfer a container from Elliot’s vehicle to Krieger’s vehicle.
The DEA followed Krieger to the Post Office and watched as he dropped packages from the container off at the Post Office. The investigators contacted the United States Postal Inspection Service (USPIS) and the North Las Vegas P. D. Law enforcement recovered the packages from the bin and deployed a canine to ensure they had probable cause to open the packages dropped off in the bin. The canine hit on four out of the fifteen packages. Officers opened the packages and found cocaine.
During their investigation, the DEA interdicted and photographed over 200 USPS Priority Mail Envelopes believed to have originated from the defendants. Out of the envelopes photographed, 44 have been seized by DEA and the USPIS, and search warrants have been obtained to examine the contents of the packages. All of the seized envelopes contained a white, powdery substance that tested positive for the presence of cocaine. The cocaine seized in 39 of the 44 envelopes are amounts for personal use. While 5 of the 44 envelopes contained distribution amount. The total amount of cocaine recovered during investigation exceeds 5 kilograms.
The USPIS recognized the packages that were deposited by Krieger. In 2019, the USPIS identified an individual located in Las Vegas selling cocaine on the darkweb using the moniker “Insta”. The DEA started investigating the dark web vendor Insta directly.
During a surveillance session on January 28, 2021, the DEA saw Engstrom leaving his stash house with a backpack, and driving directly to BitLiquid, Inc., a “Bitcoin liquidity and consulting service located in Hopkins, Minnesota.”
Investigators obtained Bit Liquid’s crypto wallet that utilizes the Ethereum platform. Using etherscah.io Investigators queried Bit Liquid’s wallet to find activity on the Ethereum Blockchain at the time Engstrom was observed at BitLiquid. Based on their query, investigators found that on January 28, 2021, at 4:58 pm PST, 37,000 Paxos Standard, was sent from an unknown wallet to BitLiquid’s wallet.
The transaction was valued at $37,000.00. Investigators further confirmed the financial transaction and verified that on January 29, 2021, BitLiquid, in accordance with their obligations as a Money Transmitting Business, filed a Currency Transaction Report (CTR) for the said transaction. They noted that on January 28, 2021, BitLiquid provided $36,900.00 cash to Engstrom in exchange for the paxos Standard cryptocurrency.
During the financial investigation, the DEA identified BitLiquid’s cryptocurrency wallet. By analyzing the wallet with CTR’s filed by BitLiquid, they were able to identify two of Engstrom cryptocurrency wallets. $1.8 million was transferred through one account and $1.2 million through another account.
DEA finds Insta on WhiteHouse Market
In March 2021, the DEA found Insta on White House Market and using an undercover identity and undercover mailing address they made two purchases of seven grams of cocaine each from Insta. The DEA intercepted the first package directly from the defendants.
The undercover purchase made by the DEA arrived at the undercover address in a Priority envelope with the same label, packaging, and Priority postage stamp as other envelopes the DEA intrercepted. The second package was intercepted by seizing all packages mailed by the defendants on a certain day. One of the seized packages was addressed to the DEA used in the undercover purchase from Insta.
On June 2021, the feds executed search warrants at properties controlled by the defendants.
When officers entered the premises Engstrom, Cuomo, and Elliot were busy packaging cocaine for shipment. Engstrom fled to a back office and locked it, refusing commands to exit the office. Cuomo and Elliot tried to run out of the back door and were found hiding under trucks in the garage.
All four defendants were charged with conspiracy to distribute cocaine. And Engstrom faces additional money laundering charges.