Mr Vincent Ramos was the founder and CEO of a Canada-based company called Phantom Secure. Phantom Secure was founded by Mr Ramos, Mr Kim August Rodd and another individual in 2008. Phantom Secure sold custom, modified BlackBerry mobile phones. Additionally, Phantom Secure operated an encrypted network that allowed its devices to send and receive encrypted messages. Mr Ramos advertised Phantom Secure’s products as impervious to decryption, wiretapping or legal third-party records requests.

According to Phantom Secure’s own marketing materials, the company purchased Blackberry handsets which it then modified to remove the hardware and software responsible for all external architecture, including voice communication, microphone, GPS navigation, camera, Internet and messaging services. It then installed an email program using Pretty Good Privacy (PGP) encryption software and the Advanced Encryption Standard (AES). The email program routed its traffic through encrypted servers located in countries and jurisdictions believed by Phantom Secure to be uncooperative with law enforcement, such as Panama and Hong Kong SAR of China. The locations of Phantom Secure’s encrypted servers were also disguised through multiple layers of virtual proxy networks (VPNs). Clients of Phantom Secure were provided with custom email addresses for using the email program on Phantom Secure’s devices. Phantom Secure devices and services were provided to clients at a cost of approximately USD 2,000–3,000 per six-month subscription.

According to an informant, Phantom Secure’s devices were specifically designed, marketed and distributed for use by transnational criminal organisations, specifically those involved in drug trafficking. According to law enforcement sources in Australia, Canada and the United States of America, Phantom Secure devices were used by senior members of numerous transnational criminal organisations to communicate with their criminal partners. These sources further stated that they were unaware of any law enforcement agency that had identified even a single legitimate Phantom Secure user. Phantom Secure devices were used to facilitate the distribution of wholesale quantities of cocaine, heroin and methamphetamines throughout the world, including the United States of America, Australia, Mexico, Canada, Thailand and Europe.

US authorities received intelligence that some members of the Sinaloa Cartel in Mexico were users of Phantom Secure devices. Another example of a client of Phantom Secure was Mr Owen Hanson, who used six Phantom Secure devices to coordinate the transportation of more than a tonne of cocaine from Mexico into the United States of America and on to Canada and Australia.

Phantom Secure did not sell its devices to the general public. Rather, the company operated on an exclusive referrals basis whereby a prospective client could not purchase a Phantom Secure device if they received a personal reference from an existing client. Phantom Secure not only verified the reference from the sponsoring client, but also conducted its own open-source checks to verify the prospective client’s identity. US authorities believed that the purpose of this procedure was to prevent law enforcement from penetrating Phantom Secure’s network.

To protect clients’ identities, Phantom Secure did not request, track or record their clients’ real names or other identifying information, but rather interacted with them using usernames, email addresses, or nicknames.

Phantom Secure routinely deleted and destroyed evidence from devices that it knew had been seized by law enforcement. Indeed, it guaranteed that clients’ messages would be remotely deleted if the device was seized by law enforcement or compromised.

After a news article published on 5 March 2014 stated that law enforcement investigations of a gangland murder were frustrated because the suspects used Phantom Secure devices to coordinate the killing, Mr Ramos wrote that ‘this is the best verification on what we have been saying all along – proven and effective for now over nine years. It is the highest level of authority confirming our effectiveness. It can’t get better than that.’

At the time of Mr Ramos’ arrest, one US government estimate ‘conservatively’ put the number of Phantom Secure devices in use at 7,000. Another estimate filed in the application for Mr Ramos’ arrest stated that there were more than 20,000 Phantom Secure devices in use worldwide, including approximately 10,000 in Australia.

In pleading guilty to the charges against him, Mr Ramos admitted that at least 450 kilograms of cocaine were distributed using Phantom Secure devices, though the real amount would have been significantly larger. The US government stated that ‘the amount of drugs Phantom Secure aided and abetted in transporting by providing devices and services to criminals worldwide was too high calculate.’

US authorities estimated that Phantom Secure generated tens of millions of dollars in revenue through the provision of its services. It believed that Phantom Secure laundered the proceeds of its device and services sales through several shell companies. Phantom Secure also used Bitcoin and other cryptocurrencies to launder its earnings.

Organisational structure

The organisational structure of the Phantom Secure criminal enterprise included individuals with roles as administrators, distributors and agents. Administrators included Phantom Secure’s corporate executives and front office staff who had physical control of the Phantom Secure network, Phantom Secure’s books and records, and its corporate operations. Administrators could initiate new subscriptions, remove accounts and remotely wipe and reset devices. As the CEO of Phantom Secure, Mr Ramos was its lead administrator. Mr Rodd was also alleged to have served as an administrator of Phantom Secure. Individual A was also said to have held ‘an integral role in the design and maintenance of the security integrity’ of Phantom Security.

Distributors coordinated agents and resellers of Phantom Secure devices and received payments for ongoing subscription fees, which they transferred, minus a personal commission, back to Phantom Secure. They also provided technical support and communicated directly with Phantom Secure administrators. Messrs Nasri, Poquiz and Gamboa were all alleged to have been distributors for Phantom Secure.

Agents physically sourced and engaged with new customers to sell and deliver Phantom Secure devices. They earned a profit on the sale of the handset and provided first-level technical support to their customers.

Arrest and indictment

The case against Messrs Ramos, Rodd, Nasri, Gamboa and Poquiz stemmed from an investigation in the Southern District of California which related to a Phantom Secure client who used Phantom Secure devices to traffic thousands of kilograms of cocaine and other illicit substances around the world.

On 28 February 2018, a warrant for Mr Ramos’ arrest was issued by the United States District Court for the Southern District of California. On 7 March 2018, Mr Ramos was taken into custody in Bellingham, Washington, United States of America.

Pursuant to an indictment filed 18 March 2015, Messrs Ramos, Rodd, Nasri, Gamboa and Poquiz were charged with racketeering conspiracies in violation of 18 U.S.C. § 1962 and conspiracy to distribute controlled substances in violation of 21 U.S.C. § 841 and 846. The indictment also sought the forfeiture of USD 80 million as proceeds of crime, as well as specifically identified assets such as international bank accounts, real estate, cryptocurrency accounts, and gold coins.