India- and New Jersey-Based Jeweler Charged with Multimillion-Dollar International Trade Fraud Scheme and Unlicensed Money Transmitting
NEWARK, N.J. – The U.S. Attorney’s Office filed a civil forfeiture action today to recover $54 million of cryptocurrency that it previously seized and is traceable to the proceeds of an illegal narcotics distribution scheme operating in and around New Jersey, U.S. Attorney Philip R. Sellinger announced.
“The civil action we are taking today seeks to recover millions of dollars of cryptocurrency, which the defendant allegedly obtained from drug sales. Whether it’s as simple as bags of cash or as sophisticated as cryptocurrency, we will take the steps necessary to seize financial gains defendants obtain from criminal activity.”
U.S. Attorney Philip R. Sellinger
“Many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Our forfeiture action of $54 million should serve as a lesson to those who mistakenly believe we can't trace their illicit behavior or their ill-gotten proceeds. We will successfully hold all criminals responsible in the open, with real world consequences.”
According to the complaint:
From 2010 to 2015, Christopher Castelluzzo and others conspired to sell various narcotics. Around 2013, Castelluzzo and his conspirators began to sell narcotics on darknet sites in exchange for Bitcoin. Castelluzzo then used some of the Bitcoin he had earned from narcotics sales to purchase 30,000 Ether in Ethereum’s Initial Coin Offering in July 2014. Castelluzzo also received an amount of an additional cryptocurrency – 30,000 Ethereum Classic – in 2016. Castelluzzo used the additional cryptocurrency to purchase various other cryptocurrencies. The complaint seeks the forfeiture of all of the cryptocurrency Castelluzzo obtained as a result of his narcotics sales.
Castelluzzo is currently serving concurrent 20-year federal and state prison sentences for drug distribution convictions. While Castelluzzo was incarcerated as a result of these convictions, and as Ethereum increased in value, Castelluzzo plotted from prison to avoid taxes and to move the 30,000 Ether outside of the United States. Before he could do so, however, the United States learned of Castelluzzo’s efforts to launder the cryptocurrency through recorded prison telephone calls in 2021, intervened, and seized Castelluzzo’s cryptocurrency holdings traceable to his drug trafficking crimes.
Today, the value of the 30,000 Ether is approximately $54 million.
U.S. Attorney Sellinger credited members of the FBI’s Virtual Assets Unit (VAU) under the direction of Assistant Director Luis Quesada of the Financial Crimes Section of the Criminal Investigative Division; FBI Newark Atlantic City Resident Agency under the direction of Special Agent in Charge James E. Dennehy; the FBI-Denver Field division, under the direction of Special Agent in Charge Mark D. Michalek; Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Robert Kurtz; the New Jersey Attorney General’s Office, under the direction of Attorney General Matthew J. Platkin; the New Jersey Special Investigation Division under the direction of Timathy Gonzalez; and the Colorado Springs, Colorado, Police Department, under the direction of Chief Adrian Vasquez, with the investigation.
The government is represented by Assistant U.S. Attorneys Robert Frazer of the Organized Crime and Gangs Unit, DeNae M. Thomas of the Health Care Fraud Unit, and Jordan M. Anger of the Asset Recovery and Money Laundering Unit.
The accusations in the complaint, and the description of the complaint, constitute only allegations.