Australia was the largest customer base for Phantom Secure, according to the local and international police agencies responsible for a multinational operation against the Canada-based encrypted communications company.
The Australian Federal Police, the Australian Taxation Office and AUSTRAC worked alongside state police forces as well as the FBI and the Royal Mounted Canadian Police in an operation that led to charges being laid against five men — including Phantom Secure’s chief executive, Vincent Ramos.
The US Department of Justice said that a federal grand jury indicted the group on charges that they knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications.
Phantom Secure provided mobile devices equipped with encrypted messaging services. The company’s offering was based on BlackBerry handsets. USB data transfers are disabled, along with the devices’ cameras, microphones and GPS feature.
“Our service is a fully encrypted private and secure communications environment, where the transmission of data is end-to-end encrypted,” the company says.
“This means all messages are encrypted on the device before transmission and can only be read by your intended recipients. The content and identity of our clients are not stored on our system and that the content is encrypted data, which is indeciperable.”
Earlier this month Australian agencies executed 19 search warrants across New South Wales, Queensland, Victoria and South Australia as part of the operation targeting the company.
More than 1000 devices were seized during the raids.
One person was arrested and charged with offences relating to drug possession and trafficking.
“The action taken in the US directly impacts the upper echelons of organised crime here in Australia and their associates offshore,” AFP assistant commissioner organised crime Neil Gaughan said.
“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.”
According to the US DOJ, 10,000-20,000 Phantom devices were in use around the world. Australia is believed to have been home to well in excess of 10,000 of them, according to the AFP.
“With one American dying of a drug overdose every nine minutes, our great nation is suffering the deadliest drug epidemic in our history,” US Attorney General Jeff Sessions said in a statement.
“Incredibly, some have sought to profit off of this crisis, including by specifically taking advantage of encryption technologies to further criminal activity, and to obstruct, impede, and evade law enforcement, as this case illustrates. The Department of Justice will aggressively prosecute not just drug traffickers, but those who help them spread addiction and death in our communities.”
“This case highlights how criminal enterprises, like Phantom Secure, knowingly provided advanced technology and encrypted private networks to transnational criminal operations in order to evade law enforcement,” said John Brown, FBI Special Agent in Charge of the San Diego Field Office.
“This break-through investigation has undoubtedly disrupted countless criminal organizations from operating their illegal and dangerous operations in the United States and abroad because their communications mechanism has been shut down.”