The digital house of cards in the encrypted phone industry began to fall in 2018 when Richmond’s Vincent Ramos was charged in the U.S. with operating Phantom Secure to aid and abet transnational organized crime, drug trafficking and money laundering.
Ramos pleaded guilty, was sentenced to nine years in jail and ordered to forfeit $80 million in assets. RCMP national intelligence official Cameron Ortis was charged in 2019 for allegedly leaking files to Ramos.
“In the time since Ramos’ arrest, the FBI has not identified a single legitimate, non-criminal user of Phantom Secure,” said U.S. court documents unsealed June 7.
“The FBI provided opportunities for any user of a Phantom Secure device to come forward and retrieve their data. No request was made by any Phantom Secure user to the FBI.”
In March, Vancouver’s Jean-Francois Eap and Thomas Herdman were also charged in the U.S. over Sky Global, which picked-up customers after Ramos was busted.
Eap and Herdman are accused of enabling the import, export and distribution of heroin, cocaine and methamphetamine in Australia, Asia, Europe and North America.
The FBI claims there are at least 70,000 Sky Global devices and the company has generated hundreds of millions of dollars in profits over a decade. Eap is the CEO and Herdman a distributor. Eap claimed he is innocent and said he would work to clear his name.
On June 7, Operation Trojan Shield was announced: 800 arrests in 16 countries and seizures of drugs, guns, luxury cars and cash and cryptocurrency related to the Anom encryption service, which turned out to be operated by the FBI.
A special agent’s affidavit to obtain a search warrant said that after Ramos was arrested, the FBI recruited an informant who had been developing a next generation device called Anom to fill the void left by Phantom Secure.
The informant, whose name and hometown were not revealed, had previously distributed both Phantom Secure and Sky Global to transnational criminal organizations and agreed to offer Anom to an existing network of distributors with direct links to organized crime.
At the time, the void created by Phantom Secure’s dismantlement provided a new opportunity for criminal users to switch to a new, secure brand of device. The CHS previously distributed both Phantom Secure and Sky Global devices to TCOs [Transnational Criminal Organizations] and had invested a substantial amount of money into the development of a new hardened encrypted device. The CHS offered this next generation device, named “Anom,” to the FBI to use in ongoing and new investigations. The CHS also agreed to offer to distribute Anom devices to some of the CHS’s existing network of distributors of encrypted communications devices, all of whom have direct links to TCOs.
The Trojan Shield investigation has unveiled how criminal organizations compartmentalize their activities with multiple brands of hardened encrypted devices. For example, some users assign different types of devices to different parts of a drug trafficking transaction. For example, I have seen conversations where Anom is used for the logistics of the drug shipments, but Ciphr or Sky were used to coordinate the concealment of the illicit proceeds. This compartmentalization shows the inter-connectivity of the encrypted communications device industry.
The interconnectedness was also apparent in the increase in demand when two major platforms were dismantled during the Trojan Shield investigation.
First, in July 2020, European investigators announced an investigation into EncroChat which led to its dismantlement. Demand for Anom devices from criminal groups increased after this announcement. Additionally, in March 2021, the announcement of charges against Jean Francois Eap and the dismantlement of Sky Global resulted in a massive increase in demand for Anom devices by criminal organizations.
Before Sky’s dismantlement, there were approximately 3,000 active Anom users. Since March 12, 2021, as a direct result of the Sky Global charges, there are now close to 9,000 active Anom users.
The criminals who use hardened encrypted devices are constantly searching for the next secure device, and the distributors of these devices have enabled criminals’ impenetrable communications on these devices for years.
A goal of the Trojan Shield investigation is to shake the confidence in this entire industry because the FBI is willing and able to enter this space and monitor messages.
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