SC ‘Dark Web’ drug kingpin, who used Chinese narcotics and bitcoins, gets 14 years

By February 22, 2019 Bitcoin Business
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A federal judge has sentenced a S.C. drug kingpin — who used the Internet’s Dark Web to make a fortune by ordering narcotics from China and then stashing his profits in bitcoins — to 14 years in prison.

U.S. District Court Judge Terry Wooten pronounced sentence on Eric Hughes, 37, of Bluffton shortly before 8 p.m. Thursday in Columbia after an eight-hour hearing where Hughes’ lawyer, James Rogers, argued for less time.

Hughes entered a guilty plea last fall to money laundering and drug conspiracy. He could have been sentenced to 20 years in prison.

At Thursday’s hearing, Drug Enforcement Administration agent Barry Wilson described Hughes’ scheme in detail to Judge Wooten.

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The scheme worked this way, according to Wilson, Assistant U.S. Attorney Jim May and evidence in the case:

▪ Using the Internet’s Dark Web, a collection of web sites frequented by criminals and others who want to keep their activities hidden, Hughes ordered the raw materials used to make counterfeit prescription drugs from China.

▪ When the narcotics arrived, he and several associates rented vacation houses at Fripp Island, Sullivans Island, Isle of Palms and Tybee Island, Ga., normally for a month.

▪ In those houses, Hughes and his associates would set up what law officials called “clandestine drug labs.” Using a machine called a “pill press,” they manufactured counterfeit prescription drugs that appeared to be Xanax and various synthetic opioids. Hughes got the recipes to make his counterfeit prescription drugs on the internet. The pill press machine could produce up to 500,000 pills a month.

▪ Then, Hughes — whose cyber nickname was “Genius Bar” — used the Dark Web’s black market sites to sell his illegal drugs. He sent batches of the illegal drugs — thousands of pills at a time — to purchasers through the U.S. mail and was paid in bitcoins.

▪ Hughes then laundered the bitcoins he received through various bank accounts.

The narcotic dust created by the pill press contaminated the vacation homes. DEA agents found the interior of a Tybee Island beach house so covered in drug residue that agents had to wear respirators and protective clothing. The clean-up of the beach house cost $213,000.

In an earlier hearing in the case, an agent testified investigators had found approximately 150 bitcoins worth $1 million that once belonged to Hughes. They have been seized and sold by the U.S. Marshall’s office.

Two of Hughes’ associates — Taylor Place, 25, and Willie Rice, 37, both also of Bluffton — have agreed to plead guilty to conspiracy charges in the case.

According to filings in the case, Hughes grew up in Beaufort and completed the 11th grade. He has an electricians’ license and attended the University of South Carolina for five years but never graduated.

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