Last week, law enforcement agencies in Australia, US and
Canada announced
that they have successfully dismantled a criminal enterprise servicing
the organised crime market with secure, encrypted communications.
The Australian Federal Police, the US Federal Bureau of
Investigation, the Royal Canadian Mounted Police, the Australian Criminal
Intelligence Commission, New South Wales Crime Commission, New South Wales
Police, Queensland Police, Victoria Police, South Australia Police, the
Australian Taxation Office and AUSTRAC (Australian Transaction Reports and
Analysis Centre) were involved in the operation.
According to the media release, it will be alleged that Canadian-based
company Phantom Secure specifically designed devices for the organised crime
market allowing criminals around the globe to use unrestricted, secure
communications beyond the capability of law enforcement interception. The
devices were used for the purpose of committing offences such as money
laundering and drug trafficking.
Law enforcement agencies across multiple continents worked
together to dismantle the network infrastructure of Phantom Secure, located in
various offshore jurisdictions, disabling the encrypted platform and the
thousands of secure devices used on it.
Five men have been indicted in the United States in
connection with the operations of Phantom Secure, including the company’s CEO,
on charges they knowingly participated in a criminal enterprise that
facilitated the transnational importation and distribution of narcotics through
the sale and service of encrypted communications.
The media release state that the impact of this takedown to
the global operations of Phantom Secure, its infrastructure and client base in
Australia have been significant, and will be sustained.
Australian authorities allege that Phantom Secure was the
largest single supplier to the Australian organised crime market and this
product was the first encrypted communication platform available on a wholesale
scale in Australia. The number of these devices sold and used in Australia
since inception is estimated to be well in excess of 10,000 – the company’s
largest customer base.
This is the first time the US government has targeted a
company and its principals for aiding and abetting criminal organisations by
knowingly providing them with tools to ‘go dark’ and evade law enforcement and
obstruct justice while committing crimes such as transnational drug
trafficking.
Australian authorities entered into the investigation in
early 2017 following an exchange of intelligence with the Federal Bureau of
Investigation (FBI) and Royal Canadian Mounted Police (RCMP).
Australian authorities executed 19 search warrants on
premises across four states as part of the international disruption action on 6
March 2018, where more than 1000 encrypted mobile devices were seized. There
was one arrest in Victoria for offences relating to drug possession and
trafficking.
Australian Federal Police (AFP) Assistant Commissioner
Organised Crime, Neil Gaughan said, “The action taken in the US directly
impacts the upper echelons of organised crime here in Australia and their
associates offshore. Using this equipment, criminals have been able to
confidently communicate securely and control and direct illicit activity like
drug importations, money laundering and associated serious, often violent
criminal offending, yet have remained removed from these criminal acts.”
Assistant Commissioner Gaughan highlighted the importance of
domestic as well as international partnerships, saying, “Close partnerships
have been the key to this operation's landmark success in Australia and
recognition and thanks must go to our many partners in this investigation,
principally the Australian Criminal Intelligence Commission and the New South
Wales Crime Commission. Police in New South Wales, Victoria, Queensland and
South Australia were also integral to the success while the Australian Tax
Office involvement and information from AUSTRAC was invaluable.”
“International partners at the FBI and RCMP had been
outstanding working methodically around the clock together with Australia on
this unique and complex investigation. Without the cooperation, commitment and
shared drive, Australian law enforcement agencies would not be announcing this
significant result,” he added.
US Attorney General Jeff Sessions said with one American
dying of a drug overdose every nine minutes, the country is suffering the
deadliest drug epidemic in its history.
He said that the US Department of Justice will aggressively
prosecute not just drug traffickers, but also those who help them spread
addiction and death in communities. He thanked the FBI, DEA, Customs and Border
Protection, Homeland Security Investigations, Washington State Police, the
Bellingham and Blaine Police Departments, and all of the US’ law enforcement
partners around the world, including Australia, Canada, Panama, Hong Kong, and
Thailand for their hard work on this case.
RCMP Criminal Operations Officer, Investigative Services and
Organised Crime Assistant Commissioner, Jim Gresham, said the investigation is
a prime example of law enforcement agencies from around the world working
together to identify, investigate and charge people involved in transnational
criminal activity.
Commissioner of the NSW Crime Commission, Peter Bodor QC
described the disruption of the Phantom Secure platform as one of the most
significant blows to organised crime in Australia in the last twelve months.
AUSTRAC National Manager, Intelligence, Dr John Moss said
that AUSTRAC’s financial intelligence and information played a critical role in
helping investigators follow the money trail and identify payments made by
individuals and companies to purchase encrypted communications devices.
NSW Police Force State Crime Commander, Assistant
Commissioner Mal Lanyon, commented, “We will continue to proactively deploy a
variety of strategies and tactics, and harness the reach of our partners, to
strip criminal enterprises of assets and disrupting any activity that impacts
on the community of NSW.”
The AFP will continue to work with the FBI and RCMP offshore
and with domestic partners. Further arrests and charges have not been ruled out
as the investigation continues.
Authorities are also aware of similar platforms, some with
direct connections to Phantom Secure, and their operators are currently under
law enforcement scrutiny.
