"Lie down with dogs, wake up with fleas," the old aphorism goes. "Encrypt for drug traffickers, wake up with indictments," is the version that Phantom Secure might render today. In a series of indictments, a federal grand jury said the CEO and four associates, "... knowingly and intentionally participated in a criminal enterprise that facilitated the transnational importation and distribution of narcotics through the sale and service of encrypted communications."
According to the FBI, Phantom Secure earned more than $80 million in the last decade providing secure communications for over 20,000 users, all of whom were active in various criminal undertakings. In their product offerings, Phantom Secure took standard smart phones, removed all "civilian" functionality, and replaced it with encrypted email systems that the phones could only use for communicating within the Phantom Secure network of devices.
In a statement, the FBI says, "Given the limited functionality of the phones and the fact that they only operate within a closed network of criminals, all of Phantom Secure's customers are believed to be involved in serious criminal activity." The FBI worked with Australian Federal Police, Royal Canadian Mounted Police, and law enforcement agencies in Panama, Hong Kong, and Thailand to pursue and arrest CEO Vincent Ramos in Bellingham, Wash. The other four Phantom Secure executives named in the indictments are still at large.
In statements, FBI director Christopher Wray said, "'The indictment of Vincent Ramos and his associates is a milestone against transnational crime," while US Attorney Adam Braverman said, "When criminals go dark, and law enforcement cannot monitor their phones or access evidence, crimes cannot be solved, criminals cannot be stopped and lives can be lost. As a result of this groundbreaking prosecution, we will disable the communication infrastructure provided by a criminal enterprise to drug traffickers and other violent criminals."
Ramos will face charges in federal court in San Diego. He and his associates have been charged with Conspiracy to Commit RICO in violation of 18 U.S.C. § 1962 and Conspiracy to Aid and Abet the Distribution of Controlled Substances in violation of 21 U.S.C. § 841 and 846.