Sky Global Executive and Associate Indicted for Providing Encrypted Communication Devices to Help International Drug Traffickers
SAN DIEGO – A federal grand jury today returned an indictment against the Chief Executive Officer and an associate of the Canada-based firm Sky Global 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 devices.
Jean-Francois Eap, Sky Global’s Chief Executive Officer, and
Thomas Herdman, a former high-level distributor of Sky Global devices, are
charged with a conspiracy to violate the federal Racketeer Influenced and
Corrupt Organizations Act (RICO).
Warrants were issued for their arrests today.
According to the indictment, Sky Global’s devices are
specifically designed to prevent law enforcement from actively monitoring the
communications between members of transnational criminal organizations involved
in drug trafficking and money laundering. As part of its services, Sky Global
guarantees that messages stored on its devices can and will be remotely deleted
by the company if the device is seized by law enforcement or otherwise
compromised.
The indictment alleges that Sky Global installs
sophisticated encryption software in iPhone, Google Pixel, Blackberry, and
Nokia handsets. Sky Global device users communicate with each other in a closed
network, and Sky Global routes these communications through encrypted servers
located in Canada and France.
There are at least 70,000 Sky Global devices in use
worldwide, including in the United States. The indictment alleges that for more
than a decade, Sky Global has generated hundreds of millions of dollars in
profit by facilitating the criminal activity of transnational criminal
organizations and protecting these organizations from law enforcement.
According to the indictment, Sky Global’s purpose was to
create, maintain, and control a method of secure communication to facilitate
the importation, exportation, and distribution of heroin, cocaine and
methamphetamine into Australia, Asia, Europe, and North America, including the
United States and Canada; to launder the proceeds of such drug trafficking
conduct; and to obstruct investigations of drug trafficking and money
laundering organizations by creating, maintaining, and controlling a system
whereby Sky Global would remotely delete evidence of such activities.
The indictment alleges that Sky Global employees used
digital currencies, including Bitcoin, to facilitate illegal transactions on
the firm’s website, to protect its customers’ anonymity, and to facilitate the
laundering of the customers’ ill-gotten gains.
According to the indictment, Sky Global employees also set up and
maintained shell companies to hide the proceeds generated by selling its
encryption services and devices.
In 2018, the principals of another communications encryption
company, Phantom Secure, were indicted in the Southern District of California
for their roles in providing encrypted devices to criminal groups. Phantom
Secure’s chief executive, Vincent Ramos, pleaded guilty and admitted that he
and his co-conspirators facilitated the distribution of narcotics around the
world by supplying encrypted communications devices designed to thwart law
enforcement.
As alleged in today’s indictment, Sky Global instituted an
“ask nothing/do nothing” approach toward its clients shortly after the takedown
of Phantom Secure. This policy allowed
for Sky Global to claim plausible deniability from the activities of their clients
that they knew or had reason to know participated in illegal activities,
including international drug trafficking.
“The indictment alleges that Sky Global generated hundreds
of millions of dollars providing a service that allowed criminal networks around
the world to hide their international drug trafficking activity from law
enforcement,” said Acting U.S. Attorney Randy Grossman. “Companies who do this
are perpetuating the deadliest drug epidemic in our nation’s history. This
groundbreaking investigation should send a serious message to companies who
think they can aid criminals in their unlawful activities. I want to thank the
prosecutors on this case, Meghan Heesch and Joshua Mellor, as well as our
federal law enforcement partners at the FBI, DEA, IRS and the U.S. Marshals
Service, for their excellent work on this case.”
“The indictment of Sky Global’s CEO and main distributor is
another major strike against transnational crime,” said Suzanne Turner, FBI
Special Agent in Charge of the San Diego Field Office. “Eap and Herdman
allegedly provided a service designed to allow criminals to evade law
enforcement to traffic drugs and commit acts of violent crime without
detection. Similar to our 2018 investigation of encrypted service provider
Phantom Secure, the San Diego FBI targeted this Canadian company who also
exploited encryption to go dark on law enforcement around the globe. With these highly impactful cases, we have
shown that the FBI focuses on investigating international criminal
organizations from the top so we can shut down entire illicit operations—and
the associated technological infrastructure.
Today, the FBI has removed what we allege to be another illicit secret
communications network used by criminals in the US, Canada, and worldwide.” SAC Turner added, “I want to thank our
partners at the Department of Justice, as well as our Canadian law enforcement
partners, for their incredible work on this case.”
“DEA maintains an evolving global reach and combined with
strong foreign law enforcement partnerships, is committed to searching out the
most significant organized criminal groups facilitating sophisticated narcotics
trafficking networks,” said DEA Los Angeles Field Division Special Agent in
Charge Bill Bodner. “The joint effort to pursue these individuals who hide
behind encrypted communication platforms shows that even the use of advanced
technology will not enable suspects to conceal their criminal activities from
law enforcement.”
“This case is another example of IRS-CI working closely with
our international partners to follow the money and bring significant criminal
activity to light,” said Special Agent in Charge Ryan Korner of the
IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “The indictment
alleges that Sky Global’s network facilitated international crime across the
world, but just as criminals know no borders, neither does federal law
enforcement. The combined efforts of the Joint Chiefs of Global Tax Enforcement
(J5) ensure that these types of illicit behavior are identified, tracked, and
ultimately prosecuted on a global-scale.”
The international operation to seize Sky Global’s
infrastructure involved cooperation and efforts by law enforcement authorities
in the United States and Canada. In addition, on March 10, 2021, Europol
announced that judicial and law enforcement authorities in Belgium, France and
the Netherlands had wiretapped Sky Global’s servers and monitored hundreds of
millions of messages by Sky Global’s users. The European investigation resulted
in hundreds of arrests, the seizure of thousands of kilograms of cocaine and
methamphetamine, hundreds of firearms, and millions of Euros.
“With technological advancement comes increased levels of
criminal sophistication, but also new tools for police to combat crime,” says
Assistant Commissioner Dwayne McDonald, BC RCMP Criminal Operations Officer for
Federal, Investigative Services and Organized Crime. “The RCMP will continue to
adopt new technologies and strategies to keep our communities safe.
Collaboration with our international policing partners, such as in this case
with the FBI and DEA, has become an integral part in the ever-evolving fight
against organized crime.”
This case is the result of ongoing efforts by the Organized
Crime Drug Enforcement Task Force (OCDETF), a partnership that brings together
the combined expertise and unique abilities of federal, state and local law
enforcement agencies. The principal mission of the OCDETF program is to
identify, disrupt, dismantle and prosecute high-level members of drug
trafficking, weapons trafficking and money laundering organizations and
enterprises.
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