BOISE – Laura Denise Russell, 65, of Mountain Home, was sentenced to 40 months in federal prison for conspiring to commit money laundering, U.S. Attorney Josh Hurwit announced today.
According to court records, Russell conspired with others, including her son Michael Osborn, 39, of Boise, to launder drug proceeds from approximately October 2019 until March 2021. During the conspiracy, codefendants Michael Osborn and Troy Thomas Wheeler, 48, of Meridian, were incarcerated in the Idaho Department of Corrections where they used contraband cellphones to facilitate the distribution of controlled substances including alpha-pyrrolidinohexanophenone, which is commonly referred to as a-PHP or “bath salts.” Russell’s role included retrieving drugs from the mail and providing them to others. She also collected drug proceeds from others, which were kept in her credit union account and also converted into Bitcoin and other cryptocurrencies. Russell and her codefendants knew the funds were drug proceeds and took steps to conceal the nature and source of the drug proceeds. During the investigation, law enforcement agents seized a digital wallet, pursuant to a court-authorized seizure warrant, that contained 7.83777 Bitcoin that was valued at approximately $280,000.
Chief U.S. District Judge David C. Nye sentenced Russell to serve two years of supervised release following her prison sentence and ordered the seized Bitcoin to be forfeited to the Government. Russell pleaded guilty to the crime on April 4, 2023.
Codefendant Angela Marie Klinkhamer, 44, of Caldwell, pleaded guilty to conspiring to distribute controlled substances and conspiring to commit money laundering on November 28, 2022. She was sentenced to 70 months in prison on March 16, 2023. Michael Robert Osborn, 39, of Boise, pleaded guilty to conspiring to distribute controlled substances and conspiring to commit money laundering on April 26, 2023, and he is scheduled for sentencing on September 12, 2023. Troy Thomas Wheeler, 48, of Meridian, pleaded guilty to conspiring to distribute controlled substances, and he is scheduled for sentencing on September 11, 2023.
“Drug traffickers may think that they can hide their activities or illegal proceeds using cryptocurrency. They are wrong,” said U.S. Attorney Hurwit. “This case shows that our law enforcement partners have the tools and tenacity to uncover all forms of money laundering, and we will not hesitate to prosecute even the most complex cases.”
“Success demands our dedication and continued commitment to working together,” said Special Agent in Charge Robert Hammer, who oversees HSI operations in the Pacific Northwest. “Every criminal case HSI investigates has a financial nexus and HSI, along with our partners, will stop at nothing to identify illicit financial activity and seize those proceeds.
“IRS Special Agents are experts in unraveling complex financial transactions and money laundering schemes involving cryptocurrencies,” said Andy Tsui, Special Agent in Charge, IRS Criminal Investigation Denver Field Office. “Today’s sentencing should serve as a reminder that CI and our law enforcement partners are relentless in our mission to dismantle drug trafficking organizations and bring these criminals to justice.”
U.S. Attorney Hurwit credited the cooperative efforts of Homeland Security Investigations, IRS – Criminal Investigation, U.S. Postal Inspection Service, and the Idaho Department of Corrections, which led to the charges.
This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.
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