CBS Baltimore reported that Ryan Farace pleaded guilty in federal court to drug distribution and money laundering charges. Between November 2013 and June 2017, Farace ran a scheme to manufacture and sell counterfeit Xanax online. Based on an analysis of the data recovered, it is estimated that he distributed more than 920,000 fake pills in less than four years. Robert Swain, a co-conspirator, pleaded guilty to just the money laundering charges.
According to his plea agreement, Farace originally began manufacturing and selling the counterfeit Xanax pills while he was still living in his parents’ home. In June 2016, he purchased his own home and moved his operation there. Farace used a standalone pill press that was about the size of a vending machine, tabletop pill presses, Xanax pill molds, dyes, and other equipment to make his pills. Some of the equipment was purchased off of eBay.
Farace sold the pills on several online marketplaces, such as Silk Road 2.0, Hansa, and Darknet Heroes League. All three of these markets have been shut down law enforcement or are no longer in operation. From December 2013 until Silk Road 2.0 was seized by the U.S. Federal Bureau of Investigations in November 2014, Farace shipped about 1,066 orders totaling approximately 420,000 pills. When Dutch authorities seized the Hansa marketplace in June 2017, law enforcement received information on both the buyers and the sellers. Data from May 2016 to March 2017 showed that Farace shipped 629 orders totaling approximately 500,000 Xanax pills.
Once customers paid for their purchases, Farace would then ship the pills to them using the U.S. Postal Service. Starting in June 2015, he began to use a postal meter. When the meter was last used by Farace on January 26, 2017, over 3,500 packages had been sent. 49 of those packages were sent to “Carlton Hall” at various addresses around Tennessee, including 26 sent just one address in Memphis. Investigators were able to search two of the packages and found 10,375 Xanax pills inside.
Farace laundered some of his proceeds online, but he also did so in real life as well. This included investing some of his drug proceeds into a drug rehabilitation center in Baltimore County. Starting in May 2017, he began to receive a bi-weekly salary from the center despite never working there.
In a press release from the U.S. Department of Justice announcing the plea deal, U.S. Attorney Robert K. Hur said, “Federal law enforcement and our international partners are working together to find and prosecute those who use the dark web to sell drugs, and launder the proceeds of their drug dealing. This case is an excellent example of what can be accomplished through that cooperation.” This case was the result of contributions from members of the U.S. Drug Enforcement Administration, Homeland Security Investigations, the U.S. Postal Inspection Service, the IRS-Criminal Investigation, the U.S. Marshals Service, and the Baltimore County Police Department. Assistant U.S. Attorneys Dana J. Brusca and Zachary B. Stendig prosecuted this case. Farace has his sentencing scheduled for November 20, 2018.