Phantom Secure is one of the most infamous companies in the secure phone industry. Sources and court documents detail that its owner has been arrested for allegedly helping criminal organizations.
For years,
a slew of
shadowy companies have
sold so-called encrypted phones, custom BlackBerry or Android devices that
sometimes have the camera and microphone removed and only send secure messages
through private networks. Several of those firms allegedly
cater primarily for
criminal organizations.
Now, the
FBI has arrested the owner of one of the most established companies, Phantom
Secure, as part of a complex law enforcement operation, according to court
records and sources familiar with the matter.
“FBI are
flexing their muscle,” one source familiar with the secure phone industry, and
who gave Motherboard specific and accurate details about the operation before
it was public knowledge, said. Motherboard granted the sources in this story
anonymity to talk about sensitive developments in the secure phone trade. The
source said the Phantom operation was carried out in partnership with Canadian
and Australian authorities.
A complaint
filed in the Southern District of California on Thursday charges Vincent Ramos, the
founder and CEO of Canada-based Phantom, with racketeering conspiracy to
conduct enterprise affairs, as well as conspiracy to distribute narcotics, and
aiding and abetting. Authorities arrested Ramos on Thursday, according to the
court docket. Crucially, the complaint alleges that Ramos and Phantom were not
simply incidental to a crime, like Apple might be when a criminal uses an
iPhone, but that the company was specifically created to facilitate criminal
activity.
The heavily
redacted complaint, written by FBI Special Agent Nicholas Cheviron, alleges
that even members of the notorious Sinaloa drug cartel used Phantom’s devices,
and that the “upper echelon members” of transnational criminal groups have
bought Phantom phones. A second source also familiar with the secure phone
industry told Motherboard that the devices have been sold in Mexico, Cuba, and
Venezuela, as well as to the Hells Angels gang. Cheviron estimates that 20,000
Phantom devices are in use worldwide, with around half of those in Australia;
bringing in tens of millions of dollars of revenue to Phantom.
Some of
Phantom’s customer email addresses, used as part of Phantom’s messaging
service, make references to violent crime. “Leadslinger,” “the.cartel,”
“trigger-happy,” and “knee_capper9” are all examples provided in the complaint.
In addition
to removing the microphone and camera from BlackBerry devices, Phantom also
takes out GPS navigation, internet browsing, and normal messenger services, the
complaint reads. Phantom then installs Pretty Good Privacy (PGP) software to
send encrypted messages, and routes these messages through overseas servers,
the complaint alleges. The complaint points to Hong Kong and Panama as
countries “believed by PHANTOM SECURE to be uncooperative with law
enforcement.” Phantom can also remotely wipe devices in the event they are
seized by authorities.
In order to
pin Phantom to criminal activities, Canada’s Royal Canadian Mounted Police
(RCMP) purchased Phantom devices while posing as drug traffickers. The RCMP
then asked if it was safe to send messages such as “sending MDMA to Montreal,”
to which Phantom replied it was “totally fine.” The RCMP also pretended that
authorities had arrested an associate with incriminating evidence on the phone,
and needed Phantom to wipe the device. Multiple undercover agents, posing as
drug traffickers looking to expand their operations, also met Ramos in Las
Vegas in February 2017, the complaint continues.
“We made
it—we made it specifically for this [drug trafficking] too,” Ramos told
undercover agents, according to a transcript included in the complaint.
As part of
its investigation into Ramos and Phantom Secure, the FBI has at least one
cooperating witness—a convicted transnational drug trafficker from the Sinaloa
cartel—according to the complaint. This unnamed witness, along with someone
named Marc Emerson who was alleged to be involved in the drug trafficking
before dying due to an overdose in June 2017, were customers of Phantom Secure,
and used the company’s devices to conduct their transnational drug trafficking
activity, the complaint adds. This is where the aiding and abetting charge
comes in—the cooperating witness allegedly used a Phantom device while
organizing the transit of five kilograms of cocaine.
“We made
it—we made it specifically for this [drug trafficking] too,” Ramos told
undercover agents.
On
Wednesday, when Motherboard learned of the operation and contacted the Bureau
before the court documents became public, an FBI spokesperson declined to
comment, citing the Bureau’s policy of neither confirming or denying
investigations. The FBI did not respond to a follow-up request on Saturday.
Ramos’
lawyer did not respond to a request for comment.
Law
enforcement agencies have cracked down on other encrypted phone companies
allegedly catering to organised crime over the past few years. In 2016, Dutch
investigators arrested
the owner of Ennetcom, whose customers allegedly include hitmen, drug traffickers, and other
serious criminals. And then in 2017, Dutch authorities also busted
PGP Sure, which
also allegedly catered to organized crime.