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Canadian CEO arrested in US on charges of providing encrypted phones Mexican cartels

File photo – Research in Motion Blackberry is shown in Toronto on October 26, 2007.

(REUTERS/Mark Blinch)

The U.S. government last week arrested the head of a Canadian company that allegedly sold encrypted mobile phones to the Mexican drug cartels – to shed light on the increasing use of private communication networks of organised crime groups looking to avoid the prying ears of the law.

Federal law enforcement handcuffed Vincent Ramos, the 40-year-old founder of the Phantom Security Communication, last week in Seattle on charges that his company maintained a secure telephone communication network that supplied the encrypted mobile phones to the mexican Sinaloa Cartel and the Australian biker gangs, among other organized crime.

In a heavily redacted complaint filed in federal court, the FBI claims that “Phantom Secure networks are specially designed to prevent law enforcement from intercepting and monitoring of communications on the network”, and that there are around 20,000 encrypted Blackberry mobile phones of the company in the hands of the customers. Phantom apparently made tens of millions of dollars from the scheme, according to the complaint.

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“Phantom Secure devices and service are specially designed to prevent law enforcement from intercepting and monitoring of communications on the network,” FBI Agent Nicholas Cheviron wrote in the complaint. “[E]very facet of the Phantom Secure’s corporate structure was set up specifically to facilitate criminal activity, and obstruct, obstruct, and evade law enforcement.”

Phantom CEO Ramos faces charges of extortion and conspiracy to distribute drugs, and his company is accused of shielding the assets within shell companies and cryptocurrencies such as bitcoin.

According to the company’s own marketing materials, Phantom’s technicians strip a Blackberry of the hardware-and software – including those that are responsible for calls, GPS, Internet, photos, and messenger services to install, and then “Pretty Good Privacy encryption software” Advanced Encryption Standard ” at the top of an e-mail program.” These programs are the route via encrypted servers in countries such as Panama, Hong Kong, which are supposed to not to cooperate with law enforcement.

A Phantom phone can also be used only when you contact a other phone that the company has manipulated.

File photo, Joaquín “El Chapo” Guzmán in custody (AP)

Not everyone can on a Phantom plan – which will cost between $2,000 and $3,000 for a period of six months service plan – if new customers have to be recommended by a current Phantom user and pass a background check. Although the company says that the markets “companies and executives,” Phantom only deals with customers anonymously and the nicknames used to give a hint of who their customers tend to be: narco, elchapo66, knee_capper, leadslinger.

The research makes it clear that the mexican Sinaloa-cartel – once under the leadership of the notorious drug lord Joaquín “El Chapo” Guzmán – makes use of these phones, along with a number of criminal groups in Australia.

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A post shared by Global Privacy is important. (@globalprivacymatters) on Nov 10, 2017 at 4:56am PST

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Guzmán the recording back in January 2016 could possibly be the reason for the Sinaloa cartel interest in encrypted phones. The Mexican army was able to track down El Chapo to an apartment in the beach city of Mazatlán, thanks in large part to a mobile phone of one of Guzmán’s henchmen, and that was found during a previous raid.

With an encrypted e-mail platform is not technically illegal and there are a number of legitimate reasons why someone would like to, but the statement makes it clear that the Phantom is the entire business model is based on the sail of their goods to the organised crime.

In the past, many criminals used so-called “burners” – or cheap, pre-paid mobile phones that were difficult to detect and turned off after a period of time – but rich criminal groups, such as many of the mexican drug cartels, finding it easier to dish out the money for encrypted phones.

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Phantom is also not the only company in the game, as a search on social media brings a number of the companies that encrypted phones, in addition to images of weapons, stacks of cash and even Mexican flag emojis.

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