US Vendor Allegedly Opened 25 Bank Accounts to Launder $5.3M in Fake Pill Sales

A 27-year-old darknet market vendor will face charges related to selling counterfeit pharmaceutical pills on various darknet markets and laundering more than $5.3 million of the cryptocurrency proceeds after being arraigned in federal court on Oct. 6th. Prosecutors allege that John Khuu, of San Francisco, California, engaged in almost 500 transactions to sell nearly 623 BTC in exchange for a sum of $5.3 million between Jan. and Jun. 2020.

The cash received by Khuu from the BTC sales was then laundered through several accounts at various US banks, including Wells Fargo, JPMorgan Chase, Bank of America, and Citibank, according to the indictment against him. He was allegedly aided by multiple co-conspirators who helped him open the accounts and then immediately transfer the funds to other accounts, all in an attempt to avoid scrutiny by the banks.

The federal courthouse in Tyler, Texas where Khuu was indicted last Thursday. Source: Tyler Morning Telegraph

According to the press release by the US Justice Department, Khuu was arrested on Aug. 19 in Garden Grove, California. A federal grand jury had indicted Khuu on a charge of conspiracy to commit money laundering on May 18 and a charge of unlawful importation of a controlled substance on Aug. 17. The indictments allege that he opened 25 bank accounts – with the help of co-conspirators – specifically for the purpose of laundering his vendor funds.

Prosecutors allege that Khuu’s transactions “usually” involved Bitcoin, leaving open the possibility that other cryptocurrencies were also involved as means of payment for his vendor goods.

The darknet markets on which Khuu operated as a vendor were not mentioned by name in the statement provided by the Department of Justice or in the indictments against him. If convicted, he will be ordered to forfeit the $5.356 million in laundered funds, along with all cryptocurrency that may still be in his possession.

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