Law enforcement cracking Bitcoin black markets

lawenforcement02 Feb 2014 / The Tampa Tribune – TAMPA — When Daniel Brian Springer III purchased the illegal drug Ecstasy from China, the Pasco County man used an underground website and Bitcoin, a virtual currency.

As new web-based technologies change the way the world does business, criminals are finding ways to exploit them to avoid law enforcement.

“Criminals are nearly always early adopters of new technologies and financial systems, and virtual currency is no exception,” said Tampa FBI spokesman Dave Couvertier. “Locally, we’re starting to see activity that’s involving our area as people become aware of this particular virtual currency and some of the benefits of being anonymous.”

After the Drug Enforcement Administration intercepted a package from China in July, Springer told agents he ordered the drug from the underground website Black Market Reloaded using bitcoins worth the equivalent of more than $2,000 in U.S. currency. He said he hoped to make money by selling the drug, according to court documents.

Springer and his father, Daniel Brian Springer II, recently pleaded guilty to a federal drug conspiracy charge. Springer’s father helped arrange the address where the drug would be sent.

Their plea documents disclosed what is thought to be the first prosecution in Tampa of a crime committed with Bitcoin, a currency that has garnered headlines around the world as some users are targeted by law enforcement for illegal activities.

Acting U.S. Attorney Lee Bentley said the Middle District of Florida, which includes Tampa, is beginning to see criminal activity associated with Bitcoin.

“I believe we will be seeing more and more criminal cases in which the offenders will be using Bitcoin to commit the crime,” he said. “We have a number of criminal investigations throughout the district and in Tampa in which the subjects have used Bitcoin.”…. Read more

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