Drug Enforcement Administration

Phoenix

Douglas W. Coleman, Special Agent in Charge

April 02, 2018

Contact: Erica C. Curry

Phone Number: (602) 664-5600

DEA Phoenix Bitcoin Target Found Guilty Of Money Laundering

PHOENIX -  The DEA announces the conviction of Thomas Mario Costanzo, a.k.a. Morpheus Titania, of Mesa, Arizona, by a federal jury on March 28, 2018, on five counts of money laundering in Phoenix.  This long term investigation resulted in one of the first convictions of a money launderer in Arizona who utilized bitcoin in his criminal activities.

“The DEA is committed to identifying and targeting those criminals like Costanzo who utilize sophisticated methods such as bitcoin and the dark web to conceal their drug trafficking and money laundering enterprises,” said Doug Coleman, the DEA Special Agent in Charge of Arizona.  “The DEA and our law enforcement partners will never relent in its pursuit of justice against those who continue to destroy our communities with their illicit activities.” 

DEA agents initiated an investigation of Costanzo in 2014, after identifying an advertisement he posted on a peer-to-peer bitcoin exchange website that he was willing to engage in cash transactions up to $50,000.  Undercover federal agents approached Costanzo identifying themselves as drug dealers and were provided with bitcoin.  Costanzo told the undercover agents bitcoin was a great way to limit exposure to law enforcement.  Over a two-year period, Costanzo took $164,700 in cash from the undercover (whom he believed to be heroin and cocaine traffickers) and exchanged it for bitcoin as a method to launder drug proceeds. 

Each conviction for money laundering carries a maximum penalty of 20 years in prison, a $250,000 fine, or both. The bitcoin involved in the final transaction is also subject to forfeiture by the United States. Sentencing is set for June 11, 2018, before U.S. District Judge G. Murray Snow.

The investigation in this case was jointly conducted by the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation, the U.S. Immigration and Customs Enforcement Homeland Security Investigations, and the Scottsdale Police Department, with assistance from the Maricopa County Sheriff’s Office and the United States Postal Inspection Service.

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