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Date: 08-28-2019

Case Style:

United States of America v. Kevin Dean McCoy

Case Number: 2:17-cr-00317-JAT

Judge: James A. Teiborg

Court: United States District Court for the District of Arizona (Maricopa County)

Plaintiff's Attorney: Matthew Binford and Carolina Escalante

Defendant's Attorney: Michael John Smith


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Description:




Phoenix, AZ - Multiple Arizona Residents Sentenced to Prision for Using the Dark Web to Distribute Heroin, Methamphetamine, and Cocaine Throughout the United States

Kevin Dean McCoy, 28, of Tucson, Ariz., was sentenced by Senior U.S. District Judge James A. Teilborg to 15 years in prison. Silvester Ruelas, 50, of Peoria, Ariz., was previously sentenced to 20 years in prison. Two other co-defendants, Amber Worrell and Peggy Gomez, were sentenced to 10 years in prison and 5 years in prison, respectively. All four defendants pleaded guilty to conspiracy to distribute controlled substances and launder proceeds from drug distribution.

Between 2015 and 2017, the defendants used the vendor name “Iceman21” to advertise and sell heroin, methamphetamine, and cocaine on various dark web marketplaces, including AlphaBay, Hansa, and Dream Market. The investigation revealed that the defendants were using the United States Postal Service to ship drugs from the Phoenix metropolitan area to locations throughout the United States. During the investigation, the United States Postal Inspection Service seized parcels containing illegal drugs that were en route to Arkansas, California, Florida, Georgia, Kansas, Minnesota, Missouri, Montana, Nevada, New York, North Carolina, Oregon, Pennsylvania, and Texas. To conceal and launder proceeds they generated through drug distribution, the defendants used encrypted technology, sold cryptocurrency through peer-to-peer exchangers, and created bank accounts for non-existent businesses. During the investigation, law enforcement officials seized a Seattle Seahawks Super Bowl XL ring, numerous gold, silver, and platinum bars, and an extensive collection of firearms, including a Texas Weapons System AK-47, a Mossberg 12 gauge shotgun, and a .50 caliber Bohica sniper rifle.

“Our office is committed to working closely with our agency partners to aggressively investigate and prosecute drug traffickers,” said U.S. Attorney Michael Bailey. “Hiding behind computer keyboards and using our mail system to move their drugs will not shield them from lengthy prison sentences.”

“Drug traffickers using the dark web feel a sense of security with the anonymity to sell their poisons throughout the world,” said Doug Coleman, Special Agent in Charge of the Drug Enforcement Administration (DEA) in Arizona. “This investigation clearly demonstrates they aren’t safe, they aren’t anonymous, and they can’t evade justice. DEA and our partners will relentlessly pursue criminals who prey on our citizens, no matter where they are and no matter what means they use to distribute their illicit and deadly products.”

“Homeland Security Investigations (HSI) has continued to demonstrate a commitment to combating illicit activities spread by online dark web markets,” said Scott Brown, HSI Special Agent in Charge for the Phoenix office. “By joining forces with our law enforcement partners, we are utilizing all tools and authorities to investigate and dismantle narcotics trafficking and financial crimes that plague the internet. As this case demonstrates, there is no safe dark web marketplace beyond our investigative reach.”

“This drug trafficking organization used sophisticated means to sell and distribute dangerous drugs throughout the country. No matter the methods used by criminals, IRS-CI Special Agents have the skills needed to investigate high tech drug and money laundering schemes,” said Special Agent in Charge Ismael Nevarez, Jr., of the Phoenix Field Office of IRS - Criminal Investigations.

“This investigation once again showcases the excellent collaboration between the United States Postal Inspection Service and other law enforcement agencies. Through these partnerships, we continue working to keep our communities safe from the spread of illegal narcotics purchased through the dark web. We continue to challenge the anonymous nature of the dark web, proving time and again you are never truly anonymous,” stated Acting Inspector in Charge Jessica Wagner of the United States Postal Inspection Service.

The investigation was conducted by the Drug Enforcement Administration, Homeland Security Investigations, Internal Revenue Service - Criminal Investigations, and the United States Postal Inspection Service, with assistance from the Scottsdale, Mesa, and Peoria Police Departments, as part of an operation supported by the Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program is a federal multi-agency, multi-jurisdictional task force that provides supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking, weapons trafficking, and money laundering organizations, and those primarily responsible for the nation’s illegal drug supply.

Outcome: 21:846 - Conspiracy to Possess with Intent to Distribute Controlled Substances
(1) Defendant is committed to the custody of the Bureau of Prisons for a term of ONE HUNDRED EIGHTY (180) MONTHS, which consists of ONE HUNDRED EIGHTY (180) MONTHS on Count 1 and ONE HUNDRED EIGHTY (180) MONTHS on Count 5, said counts to run concurrently, with credit for time served. Upon release from imprisonment, the defendant shall be placed on supervised release for a term of SIXTY (60) MONTHS, which consists of SIXTY (60) MONTHS on Count 1 and THIRTY-SIX (36) MONTHS on Count 5, said counts to run concurrently. Special Assessment: $200.00. Fine: WAIVED.
18:1956(h) - Money Laundering Conspiracy
(5) Defendant is committed to the custody of the Bureau of Prisons for a term of ONE HUNDRED EIGHTY (180) MONTHS, which consists of ONE HUNDRED EIGHTY (180) MONTHS on Count 1 and ONE HUNDRED EIGHTY (180) MONTHS on Count 5, said counts to run concurrently, with credit for time served. Upon release from imprisonment, the defendant shall be placed on supervised release for a term of SIXTY (60) MONTHS, which consists of SIXTY (60) MONTHS on Count 1 and THIRTY-SIX (36) MONTHS on Count 5, said counts to run concurrently. Special Assessment: $200.00. Fine: WAIVED.


08/21/2019 243 MINUTE ENTRY for proceedings held before Senior Judge James A. Teilborg: Sentencing as to Kevin Dean McCoy (3) held on 8/21/2019. Defense counsel advises that Defendant no longer wishes to withdraw from the plea agreement. IT IS THEREFORE ORDERED that Defendant's motion to withdraw (Doc. 222 ) is denied as moot. IT IS FURTHER ORDERED adopting 148 Findings and Recommendation on Plea of Guilty. IT IS FURTHER ORDERED sustaining the Government's objection #1 to the Presentence Report and overruling Defendant's objections #1, 2, 3, and 4 to the Presentence Report, for reasons stated in the Addendum and on the record. Sentence imposed. Judgment to issue.

Appearances: AUSA Matthew Binford for the Government, CJA Attorney Michael Smith for defendant. Defendant is present and in custody. (Court Reporter Laurie Adams) Hearing held 2:31 PM to 3:29 PM. This is a TEXT ENTRY ONLY. There is no PDF document associated with this entry. (RMW) (Entered: 08/21/2019)
08/21/2019 244 PLEA AGREEMENT as to Kevin Dean McCoy. (RMW) (Entered: 08/21/2019)
08/21/2019 245 JUDGMENT AND COMMITMENT ISSUED as to Kevin Dean McCoy (3): Defendant is committed to the custody of the Bureau of Prisons for a term of ONE HUNDRED EIGHTY (180) MONTHS, which consists of ONE HUNDRED EIGHTY (180) MONTHS on Count 1 and ONE HUNDRED EIGHTY (180) MONTHS on Count 5, said counts to run concurrently, with credit for time served. Upon release from imprisonment, the defendant shall be placed on supervised release for a term of SIXTY (60) MONTHS, which consists of SIXTY (60) MONTHS on Count 1 and THIRTY-SIX (36) MONTHS on Count 5, said counts to run concurrently. Special Assessment: $200.00. Fine: WAIVED. ORDERED that Counts 2, 3, 4, and 6 are dismissed on motion of the United States. Signed by Senior Judge James A. Teilborg on 8/21/2019.(RMW) (Entered: 08/21/2019)

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