The fall of DeepDotWeb: when a darknet news site became part of the market supply chain
On May 8, 2019, the US Department of Justice announced the seizure of DeepDotWeb, a long-running darknet news portal, and the arrest of its two administrators. The portal had operated since October 2013, publishing market reviews, outage reports and security coverage for Tor users. It also did something else: every market it featured carried a referral link, and those links paid. Federal prosecutors never charged the site's operators for reporting on darknet markets. They charged them with money laundering for profiting from the buyers the site delivered.
- April 24, 2019: a federal grand jury in Pittsburgh indicts the two administrators on one count of conspiracy to commit money laundering.
- May 6, 2019: Tal Prihar is arrested in France, Michael Phan in Israel; the site itself is seized.
- March 31, 2021: Prihar pleads guilty and agrees to forfeit $8,414,173.
- January 2022: Prihar is sentenced to 97 months in federal prison.
A news site that earned market kickbacks
According to the Justice Department's May 2019 announcement, DeepDotWeb embedded unique account identifiers in the links it published. When a reader followed one and became an active buyer, the market paid the site a share of the resulting profits, listed to users as "Referral Bonuses". Between November 2014 and April 2019, prosecutors calculated that the operators received roughly 8,155 bitcoin in more than 40,000 deposits, worth about $8.4 million as the payments arrived. The funds were moved out through shell companies in over 2,700 withdrawal transactions, by which point the bitcoin was worth around $15.4 million. The referral machine had measurable reach: accounts referred by the site accounted for 23.6 percent of all orders on AlphaBay, by the department's count. The indictment was returned on April 24, 2019, by a federal grand jury in Pittsburgh. Tal Prihar, then 37, an Israeli citizen residing in Brazil who handled the site's administration and content, was arrested on May 6, 2019, in Paris. Michael Phan, then 34, of Israel, who handled technical and day-to-day operations, was arrested the same day in Israel. The site itself was seized in the same operation. The Justice Department called it "the single most significant law enforcement disruption of the Darknet to date" and the first action "to attack the infrastructure supporting the Darknet itself".From French custody to a guilty plea
The French proceedings took time. Prihar was held in France after his arrest and later extradited to the United States. On March 31, 2021, he pleaded guilty to conspiracy to commit money laundering, as the Justice Department announced, and agreed to forfeit $8,414,173, the amount the government tied to the kickback scheme. The charge carried a maximum sentence of 20 years."Tal Prihar served as a broker for illegal Darknet marketplaces — helping such marketplaces find customers for fentanyl, firearms, and other dangerous contraband — and profited from the illegal business that ensued," said acting assistant attorney general Nicholas L. McQuaid when the plea was announced.Sentence came in January 2022, when the Justice Department announced that Prihar had been ordered to serve 97 months — a little over eight years — in federal prison. Reporting by The Record around the sentencing noted that extradition from France had meant years of detention before the case could conclude. Phan's case moved differently: according to The Record, he remained in Israel and was still fighting extradition as of January 2022. The site's two administrators thus ended on opposite sides of an ocean — one sentenced in Pittsburgh, the other, as of that reporting, never brought before a US court.