By Jack Ewing
WIESBADEN, Germany — A team of international investigators said Friday that they had shut down an online marketplace for illegal drugs, weapons, stolen data and other contraband with more than one million customer accounts, illustrating how crime fighting has increasingly become a battle in cyberspace.
Investigators from the F.B.I., I.R.S. and Drug Enforcement Administration, working with counterparts in Germany and the Netherlands, spent a year and a half trying to identify and track down the people behind the site, known as Wall Street Market. It was the latest online platform to have replaced street corners and back rooms as the place to buy and sell drugs like fentanyl, stolen credit card information and fake passports.
Wall Street Market’s administrators turned out to be three young Germans, authorities said, who were arrested April 23 and 24 at their homes in German cities that are far apart from each other. The suspects, ages 22 to 31, face up to 15 years in prison if convicted. They are charged with abetting the sale of illegal drugs.
American prosecutors also charged a Brazilian man who they said had acted as a public relations representative for Wall Street Market by promoting its services on sites like Reddit, and had served as a moderator who helped resolve disputes between vendors and customers.
The arrests and shutdown of Wall Street Market, described as perhaps the world’s largest illicit marketplace, were the biggest victory for law enforcement authorities since they closed AlphaBay and Hansa Market almost two years ago. Those sites, in turn, were successors to Silk Road, considered the original illicit online marketplace.
The platforms promise anonymity to both buyers and sellers, and use encoded digital currencies like Bitcoin and Monero to make it difficult for authorities to trace their transactions. They have become premier venues for illicit drug traffic, where users pay with cryptocurrencies and receive deliveries disguised as routine commercial parcels.An independent press needs your supportDiscover the impact of our journalism with unlimited access to The Times
Wall Street Market “functioned like a conventional e-commerce website, but it was a hidden service located beyond the reach of traditional internet browsers, accessible only through the use of networks designed to conceal user identities,” the United States attorney’s office in Los Angeles said in a statement Friday.
The shutdown of Wall Street Market appeared to at least temporarily interrupt the online drug trade. “Stick to street buying for the next few weeks (at least),” one person wrote on a forum at deepdotweb.com where people could review the quality of Wall Street Market’s services.
But history shows that when law enforcement authorities shut down one site, another quickly takes its place and is often bigger and more sophisticated. Hansa Market, which was also based in Europe, at one point had about 1,800 vendors selling drugs. Wall Street Market had 5,400 vendors, German prosecutors said.
Figuring out who operates the platforms is exceedingly difficult because there are layers of encryption. The operators of Wall Street Market allegedly ran the site using 24 servers rented from commercial vendors in the Netherlands, Germany and Romania. A breakthrough in the case came when technology used by one of the suspects to conceal his identity temporarily failed, allowing authorities to pinpoint his location.
Operating the site had effectively become a full-time job for the suspects, and apparently a lucrative one. When dozens of police officers raided the homes, they also seized 550,000 euros, or $615,000, in cash; a white Mercedes sports car; luxury watches; and one weapon. The suspects collected a 2 to 6 percent commission on transactions conducted on the site.
In line with German confidentiality rules, the suspects were not identified by name. None of the suspects had criminal records, officials said.
The United States attorney’s office identified the fourth suspect as Marcos Paulo De Oliveira-Annibale, 29, a resident of São Paulo, Brazil. He faces federal drug distribution and money-laundering charges after being accused of acting as a facilitator for Wall Street Market. The Brazilian police searched his home Friday, officials said, but did not indicate whether he is in custody.
Officials said they could not put a total value on the transactions. But sales solely by Dutch drug dealers on Wall Street Market amounted to more than €100 million, Andy Kraag, head of the Netherlands’ National Criminal Investigations Division, told reporters.
The German authorities initially said Wall Street Market was the second-largest illicit online marketplace worldwide. At a news conference in Wiesbaden, they said that measuring the sales and profits from such sites was difficult and that Wall Street Market might have been the biggest. Dream Market, once considered the largest, recently went offline amid law enforcement pressure.
“We believe that Wall Street Market recently became the world’s largest dark net marketplace for contraband including narcotics, hacking tools, illegal services and stolen financial data,” said Ryan White, chief of the cyber and intellectual property crimes section at the United States attorney’s office in Los Angeles.
American authorities also charged the three suspects in Germany on Friday, but the move is largely symbolic because Germany does not extradite its citizens.
Wall Street Market was already notorious as an illegal marketplace. In March, the Justice Department arrested five people in California accused of using the site as well as Dream Market to sell methamphetamine, heroin, cocaine and crack cocaine. The suspects are accused of hiding the drugs inside stuffed animals and mailing them to customers, at least one of whom died from an overdose.
The international team of investigators had identified the German suspects several months ago and placed them under surveillance. Near the end of April, the operators of Wall Street Market posted a notice on the site saying they were taking it down temporarily for maintenance. They began appropriating $11 million in customers’ money that was held in escrow accounts, in what may have been a so-called exit scam.
“When we saw they were withdrawing money, we reacted quickly,” said Holger Münch, president of the Bundeskriminalamt, the German equivalent of the F.B.I.
The authorities hope to use information taken from the servers to identify dealers and customers and make further arrests.