Cybercrime , Fraud Management & Cybercrime , ID Fraud

AlphaBay Moderator Pleads Guilty to Racketeering Charge

Former 'Scam Watcher' Could Face 20-Year Prison Term
AlphaBay Moderator Pleads Guilty to Racketeering Charge

A former moderator for the now-defunct AlphaBay darknet marketplace site pleaded guilty this week to a federal racketeering charge and could face 20 years in federal prison, according to the U.S. Justice Department.

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In July, Bryan Connor Herrell, 25, of Colorado, was indicted on one count of conspiring to engage in a racketeer-influenced corrupt organization, according to the U.S. Attorney's Office for the Eastern District of California, which is overseeing the case.

On Monday, Herrell pleaded guilty. The maximum penalty he now faces is 20 years in prison, according to the Justice Department. Sentencing is scheduled for May 18, and Herrell remains in custody, prosecutors say.

Role As Moderator

Before the AlphaBay's shutdown by the FBI and Europol in 2017, the marketplace was considered to be one of the biggest darknet forums for illegal sales of guns, drugs, stolen identity information, credit card numbers and another illegal items, according to court documents.

As a moderator on the AlphaBay site, Herrell settled over 20,000 disputes between vendors and purchasers, according to court papers.

"He is also accused of serving as a ‘scam watcher’ - providing a service dedicated to monitor attempts to defraud AlphaBay users," according to the indictment.

Herrell, who went by the darknet names "Penissmith" and "Botah," allegedly received payment in bitcoin for his services, according to the indictment.

AlphaBay History

AlphaBay, which was launched in December 2014, was estimated to have more than 200,000 members and 40,000 vendors, according to law enforcement agencies. In 2017, the website was abruptly shuttered as part of an operation called Bayonet, which was led by the FBI and the U.S. Drug Enforcement Agency (see: Darknet Marketplace AlphaBay Offline Following Raids).

The former AlphaBay site

As part of the operation, the federal agencies raided the house of AlphaBay's top administrator, Alexandre Cazes, who was then detained by police in Thailand. Cazes was found dead in his jail cell, according to the Justice Department.

At the time of Cazes' arrest, authorities seized his laptop, which was open and left in an unencrypted state. On the laptop, police found passwords and passkeys for the AlphaBay site and its servers as well as the online identities of individuals associated with the site, federal prosecutors say.

Crackdown on Darknet Sites

As illegal activities continue to thrive on darknet portals, law enforcement agencies around the world have been attempting to shut down the sites and arrest suspected administrators.

In May 2019, Wall Street Market and Silkkitie, two darknet markets, were shuttered as part of coordinated, international law enforcement operations. These markets sold narcotics, counterfeit currency, malware, stolen jewelry and more, authorities say (see: Darknet Disruption: 'Wall Street Market' Closed for Business).

The German Federal Criminal Police, along with U.S. law enforcement, Europol and Dutch National Police, closed the Wall Street Market and made several arrests. Finnish authorities conducted the investigation into Silkkitie and closed that site, according to news reports.

In May 2019, the FBI seized The DeepDotWeb portal, which provided a guide to darknet marketplaces, and arrested its alleged administrators as part of an international operation (see: FBI Shutters DeepDotWeb Portal; Suspected Admins Arrested).

About the Author

Akshaya Asokan

Akshaya Asokan

Senior Correspondent, ISMG

Asokan is a U.K.-based senior correspondent for Information Security Media Group's global news desk. She previously worked with IDG and other publications, reporting on developments in technology, minority rights and education.

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