ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.
Mathew Luke Gillum, resident of Meadow Vista was sentenced by US District Judge Morrison C. England Jr. earlier this month to nine years in prison for having conspired to sell marijuana. He was arrested in the year 2013. In addition to masterminding the drug trafficking operations, the charges on Gillum also included avoiding a currency transaction reporting requirement.
Mathew’s Modus Operandi
Operating in the greater Sacramento area, Mathew distributed marijuana by soliciting orders through Silkroad, the sub-surface anonymous site that operated in the darkweb. Silkroad is a website that sold drugs illegally under categories such as “Stimulants” and “Psychedelics.” The 31-year-old creator of Silkroad, Ross Ulbricht, allegedly collected over $18 million in bitcoins before the Silkroad website was tracked down and closed in 2013. The Silkroad founder, Ross Ulbricht, was sentenced to life in prison.
As the leader of the drug-trafficking organization, Gillum shipped the marijuana orders through US mail to many different locations outside California. This clandestine Silkroad extended operation was routed through different individuals (about five in number) who helped to complete it. It included opening the post office boxes, collecting the proceeds, facilitating communications, shipping the parcels and manufacturing and supplying the weed.
The marijuana orders were solicited through Silkroad. The customers shipped back cash on receiving the parcels to different post offices that were under the control of Gillum and his drug-trafficking organization. On receipt of the payment, the order was then shipped to the corresponding buyer. The type and quantity of marijuana were carefully chosen before shipment to the customer.
Between the months of August 2012 and July 2013, the Silkroad mail-order pot scheme run by Gillum is estimated to have sourced and sold over 600 pounds of marijuana to individuals in 16 different states. The Silkroad drugs were received as Express Mail parcels in Sacramento. A bitcoin account held by Gillum yielded more than $700,000 during investigation.
Mathew Gillum – Cash Transaction Reporting Anomaly
Federal officers investigating the case brought to light anomalies in a cash transaction reporting requirement when Gillum purchased a diamond ring from Tiffany & Co. for a little over $100,000 in cash in February 2013. Any transaction above $10,000 in cash requires that an IRS 8300 form be filled out and filed in the purchaser’s name. However, though Gillum paid up the cash, he got a nominee to fill out the paperwork and submit the form as though he had purchased the ring.
The Investigation – Start and Progress
The investigation began in the month of August 2012 when postal authorities detected arrival of a large number of “express mail” packages containing large sums in US currency notes. They caused suspicion as the parcels were addressed to fictitious business addresses (American Sound Concepts, Granite Cove Property Management were some of them) in the Sacramento area.
However, in the month of December 2012, a recipient of this kind of a parcel (from New Jersey) turned out to cooperate with the investigators. He confessed of having purchased 5 pounds of marijuana from the Silkroad website under a false name. He also admitted to having sent $12000 to Mathew Gillum for the “controlled delivery” marijuana packages. The Silkroad website functioned using the anonymous Tor network which required special browsers to access it. The details and communications between the users and vendors of sites in the darkweb are encrypted to evade detection. All Silkroad transactions were carried out in bitcoins. This confession further led the investigators to the courier that Gillum was using at the Rocklin PO (located on Pacific Avenue) on March 20. With cooperation from the courier, a raid was later conducted on the same day at the courier’s premises where they caught Gillum red-handed leaving the premises with a backpack containing over $7000 in cash. Though he was released then, a search was conducted in his home, located at Penryn Road, Loomis, later in the same day. Clothed in only his wet underwear, Gillum was caught trying to do away with evidence in a creek near his home. The home of Jolene Chan, who investigators said processed and packaged marijuana for the Silkroad mail order pot scheme, was also raided on that day. Gillum and Jolene together managed to handle about 400 Silkroad transactions.