Phantom CEO arrested in modified Blackberry, drug case, customers include Sinaloa Cartel and Hells Angels

Chivis Martinez for Borderland Beat material from Android Police, News.Au,  Pacer  read Canadiana's post here

FBI busts Phantom Secure CEO for selling secured BlackBerry phones to drug cartels, used for trafficking and murder.   Former customer, a convicted Sinaloa Cartel member, is a cooperating witness.

There are several companies that offer encrypted and untraceable phones for use by the more private figures among us, and Canada-based Phantom Secure is one of them.

However, its founder and CEO, Vincent Ramos, has been arrested by the FBI on several charges, all of which are related to selling locked-down BlackBerry phones to members of illegal organizations such as the Sinaloa drug cartel and the Hells Angels.

Phantom Secure takes what appear to be BlackBerry 9720s and removes the microphones, camera, GPS, Internet capabilities, and normal messenger services. It then adds PGP and routes messages through overseas servers. The company also has remote wiping capabilities in the case that a phone is seized by authorities. It looks like the company also offers Samsung Galaxy phones, though BlackBerry phones are likely more popular and they're the only ones mentioned in this report.

A heavily-redacted complaint [see in full at bottom]by FBI Special Agent Nicholas Cheviron was filed in the Southern District of California last Thursday charges Ramos of racketeering conspiracy to conduct enterprise affairs, conspiracy to distribute narcotics, and aiding and abetting. Ramos is on record as saying "We made it---we made it specifically for this [drug trafficking] too," to undercover agents. The FBI has at least one cooperating witness, a convicted transnational drug trafficker from the Sinaloa cartel, who was a Phantom Secure customer and used the company's phones to do their business. The aiding and abetting charge comes from said witness, who allegedly used a Phantom phone when organizing the transport of five kilograms of cocaine.

For people allegedly in the business of helping gangs like the Sinaloa Cartel and Hells Angels operate under the radar of the authorities, Phantom staff was remarkably indiscreet. Motherboard reported that some of the company’s customers used email addresses like:  El chapo66@lockpgp.com Thekilla@freedomsecure.me, narco@lockedpgp.com,“Leadslinger,” “trigger-happy,” “knee_capper9,” and “the.cartel”.

Undercover Canadian police also reported that when asked if the phones were good for “sending MDMA to Montreal,” Phantom staff replied that would be “totally fine.”

“We made it—we made it specifically for this [drug trafficking] too,” Ramos allegedly told undercover police.

According to the affidavit (PDF), the phones Phantom Secure supplied to the drug dealers were extensively modified after they left BlackBerry: they're only capable of running PGP-encrypted email, with VPN connections to servers in Panama and Hong Kong. All this is expensive: the phones are sold with a US$2,000 to $3,000 six-month subscription.

The phones are sold only through personal contact – someone wanting one of the devices needs a personal introduction from an existing customer. If they fell into the wrong hands, the FBI learned, they could be remote-wiped by Phantom Secure.

Anonymous sources say that the operation was carried out in partnership with Canadian and Australian authorities, and that Phantom Secure phones have been sold in Mexico, Cuba, and Venezuela, as well as to the Hells Angels. Canada's Royal Canadian Mounted Police (RCMP) assisted by posing as drug traffickers while purchasing Phantom phones, asking if sending messages like "sending MDMA to Montreal" would be safe (Phantom said it was "totally fine"), and pretending that an associate with incriminating evidence had been arrested and required a remote wipe. Multiple undercover agents, posing as drug traffickers aiming to expand their operations, met Ramos in Las Vegas in February 2017.

An estimated 20,000 Phantom phones are being used around the world, about half of which are in Australia, giving Phantom tens of millions of dollars in revenue. That might change with this report, though.

Phantom’s international client base reached Australia, with the encrypted devices believed to have been used in planning the murders of Sydney Hells Angels member Tyrone Slemnik [below]in 2013, and drug cook and Hells Angels associate Roy Yaghi in 2012.

The FBI (as well as other US law enforcement organs like the Department of Justice) has been waging a war on encryption technology for a while, claiming that criminals equipped with impregnable mobile devices are interfering with its ability to conduct investigations. It’s also tried to force companies like Apple to build surveillance backdoors into their devices, which could potentially weaken the security features available to normal users with no intent of breaking the law.

   Vincent Ramos Phantom Secure Blackberry Drug CASE by Chivis Martinez on Scribd