Federal law enforcement has seized $54 million worth of cryptocurrencies from the leader of a notorious New Jersey drug ring, U.S. Attorney Philip R. Sellinger said Thursday in a statement.
Officials discovered the funds in crypto wallets belonging to Christopher Castelluzzo, a convicted drug trafficker, and his co-conspirators, according to federal officials. The wallets held the laundered proceeds of the crew's mail-order cocaine and designer drug operations, which were active between 2010 and 2015.
“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," FBI Newark Special Agent in Charge James E. Dennehy said in a statement.
What started out as $9,000 in ETH when they first invested the drug proceeds blossomed into about $53 million, authorities said, plus a wide assortment of other tokens Castelluzzo obtained, including solana (SOL), cardano (ADA) and bitcoin. Because it was tied to the original drug trafficking, the U.S. seized it as a forfeiture.
Castelluzzo and others were originally busted in a drug ring that was run through darknet sites including Silk Road and Blue Sky, getting payment at the time in bitcoin. The busy operation was said to distribute a range of drugs including cocaine and methylone from China.
While Castelluzzo was in the midst of serving a 20-year prison sentence, authorities caught him talking about his crypto strategy – including an intention to evade taxes and liquidate his holdings outside the country, the U.S. attorney's office said.
“I sold millions of dollars worth of drugs every single week for almost four years,” Castelluzzo reportedly stated in a letter to the New Jersey Attorney General’s Office earlier this year.
In prison conversations, he and others are recorded debating the merits of various offshore destinations for the crypto fortune, including Malta, Ireland and Latin America.
"Bahamas would be awesome," Castelluzzo is quoted as saying.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.