A Vancouver businessman alleged to have sold encrypted BlackBerrys to international drug-trafficking organizations laundered “tens of millions” of dollars of his illicit profits, U.S. law enforcement says in court documents.
Vincent Ramos, who owns Phantom Security Communications, was arrested in Washington state last Wednesday and is facing racketeering, drug-trafficking, conspiracy and money-laundering charges in San Diego.
The FBI asked Bellingham Police to help them find and arrest Ramos. He was found at a business on the 2400 block of James Street in Bellingham.
The U.S. alleges he sold 20,000 of his specialized devices, as well as access to his encrypted communication network, to organized crime groups around the world, including the deadly Sinaloa cartel in Mexico, headed by Joaquin (El Chapo) Guzman.
And Ramos used shell companies and crypto currencies to launder that money, documents obtained by Postmedia News say.
“Based on reports of the RCMP, Australia and the U.S. financial investigators and agents that I have reviewed, bank records, corporate ownership filings in Canada, Singapore and Hong Kong show that Phantom Secure generated tens of millions of dollars in revenue by facilitating the crimes of transnational criminal organizations and protecting these organizations from detection by law enforcement,” FBI special agent Nicholas Cheviron says in an affidavit filed in court.
“I know that to launder its ill-gotten gains and maintain its members’ anonymity, the Phantom Secure enterprise uses crypto currencies, including Bitcoin, and shell companies.”
Ramos appears to own only one property in B.C. — a New Westminster condo assessed this year at $424,000.
The U.S. documents don’t name the shell companies or state in which country they have been set up.
Meanwhile, in B.C., where Ramos started his company in 2008, he owes the government almost $150,000 in unpaid sales tax.
Last November, the B.C. director of provincial sales tax obtained a court order to seize and sell the assets of Phantom Secure because of the unpaid $147,298.23 in tax. The court order lists Phantom Secure’s offices as being in Vancouver in the 200-block West 7th Avenue.
But Postmedia visited the multi-unit building Friday and found no reference to the controversial encryption company. A different Richmond address is listed on Phantom Secure’s most-recent B.C. corporate records. But the unit is a UPS Store and not a storefront for Ramos’s company.
Sources told Postmedia that Phantom Secure didn’t operate a public storefront in Metro Vancouver. But the company did have branches of its business in Los Angeles, Dubai, Mexico and Australia.
Phantom Secure’s closed-communications system shut down about noon Friday, according to some system-users.
The company issued a news release from Dubai in August 2015 announcing a new “online store.”
“Today, after months of anticipation, the encrypted telecom company giant Phantom Secure launches their new online store at phantomencrypt.com,” the release says. “A veteran in the secure-communications industry, Phantom Secure has been delivering military-grade encrypted Blackberry devices to their clients for over a decade and are now finally about to offer an ecommerce payment solution to customers worldwide.”
The link to the store appears to have now been disabled.
The news release claims the company started in Vancouver in 2004, even though the corporate records indicate an incorporation date of Jan. 2, 2008.
Australia has been Phantom Secure’s biggest and most controversial market. The U.S. court documents state that half of the 20,000 devices sold by the Vancouver company are in the hands of organized criminals Down Under.
The Australian Broadcasting Corp. reported in 2014 that one biker gang was using Phantom Secure devices to arrange successful hits on two Hells Angels. Police complained at the time that the murder investigations were stymied by their inability to crack the devices to obtain evidence in the cases.
The problem of organized crime using various encryption companies to evade police has been an ongoing issue in B.C. and other jurisdictions, according to the Combined Forces Specialized Enforcement Unit.
“Organized-crime groups have been using encrypted devices for some time now in an attempt to thwart detection by police of any criminal activity, enforcement unit Sgt. Brenda Winpenny said. “This may complicate police investigations, however, police continue to diligently and tenaciously target organized crime leading to successful prosecutions of the individuals who pose the greatest risk to public safety.”