Categories: Bitcoin Business

Bitcoin best mates who flaunted their wealth were running a ‘drug ring behind the scenes’

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Two entrepreneurs who drove Lamborghinis and rubbed shoulders with sports stars allegedly used a Bitcoin business as a front for an international drug syndicate.

Sam Karagiozis, 27, and good mate Steen McBeth, 28, are both facing life sentences as the alleged masterminds of a drug ring importing cocaine, MDMA and ice.

The 'self-made' millionaires co-founded Australian-based cryptocurrency Auscoin in 2017, hoping it would become the next big thing to rival the rapidly growing Bitcoin.

As the brand's notoriety grew there were invites to sit in Nick Kyrgios' player's box at the Australian Open and interviews with 60 Minutes.

But police allege behind the pair's high-profile online money venture there was a far more lucrative drug smuggling operation.

Karagiozis and McBeth are now both in custody a world away from the lavish lifestyle of flash fast cars, Disneyland trips and wealth they boasted about on social media.

Sam Karagiozis (left) and Steen McBeth (right) posed for a photo at Disneyland in Tokyo just a week before McBeth was arrested and charged with being part of a drug syndicate. It took 18 months before police arrested Karagiozis for allegedly being part of the same drug ring

Sam Karagiozis (left) and Steen McBeth (right) posed for a photo at Disneyland in Tokyo just a week before McBeth was arrested and charged with being part of a drug syndicate. It took 18 months before police arrested Karagiozis for allegedly being part of the same drug ring

Karagiozis (pictured) was arrested last month and police will allege in court that he 'directed the operations of the criminal syndicate' in the absence of his two co-accused

Karagiozis (pictured) was arrested last month and police will allege in court that he 'directed the operations of the criminal syndicate' in the absence of his two co-accused

Just seven days before his world came crashing down, McBeth was photographed at Tokyo Disneyland smiling next to his good mate Karagiozis and 'Donald Duck'.

The Japanese holiday had been the culmination of months of planning for the launch of their very own cryptocurrency business.

Auscoin was officially registered with ASIC on October 25, 2017.

McBeth also had another to celebrate his return to Australia, having purhcased a top of the range Lamborghini from his mate Karagiozis before their departure.

Prior to flying overseas McBeth dropped the car off at a customising shop to have it turned from green to black, at a cost of close to $6,000.

He picked up the Lamborghini on October 21, 2017 - but six days later it was gone.

The AFP first became aware of the alleged ring in February 2017 when Border Patrol officers found several suspicious mail packages at Melbourne Airport.

Hidden in the mail were 15.8kgs of MDMA, 2.6kgs of cocaine and 1.1kgs of ketamine.

Police allege the drugs were bought on the 'dark web' before being shipped across to Australia and distributed - with payments often made in Bitcoin.

McBeth (pictured) is originally from New Zealand and his parents Denise and Murray founded the successful post office chain Pete's Post

McBeth (pictured) is originally from New Zealand and his parents Denise and Murray founded the successful post office chain Pete's Post

Karagiozis claimed to be a self-made millionaire and a leader in cryptocurrency in Australia. He bought a Lamborghini (above) with the money he made, before selling it to McBeth in late-2017

Karagiozis claimed to be a self-made millionaire and a leader in cryptocurrency in Australia. He bought a Lamborghini (above) with the money he made, before selling it to McBeth in late-2017

Before going on holiday to Japan, McBeth dropped his Lamborghini into a workshop and paid $6,000 to have it turned black (above). Just six days after picking it up it was seized by police

Before going on holiday to Japan, McBeth dropped his Lamborghini into a workshop and paid $6,000 to have it turned black (above). Just six days after picking it up it was seized by police

McBeth (far left) and Jackson Li (far right) were both arrested on October 21, 2017. Karagiozis (centre) was arrested on March 7, 2019

McBeth (far left) and Jackson Li (far right) were both arrested on October 21, 2017. Karagiozis (centre) was arrested on March 7, 2019

HOW POLICE TRACKED ALLEGED DRUG RING:

2017

- February: AFP discover international mail containing drugs at Melbourne Airport. They allege they were bought through the dark web

- October: McBeth and Karagiozis take a holiday to Japan together

- October 21: Steen McBeth picks up a Lamborghini he had bought months earlier from Sam Karagiozis

- October 25: McBeth and Karagiozis register their cryptocurrency 'Auscoin'

- October 27: Police raid the homes of McBeth and Jackson Li after allegedly tracing the drugs back to them

2019

- March 7: Police raid the Melbourne home of Karagiozis, seizing drugs and cryptocurrency

- May 23: The trio are next due in court

It took police eight months to allegedly trace the packages to McBeth and another man Jackson Li, 27.

The pair were arrested during early morning raids in Melbourne on October 27, 2017, and charged with importing, trafficking and possessing drugs.

Police found 1kg of ice, 700g of cocaine, 10kg of MDMA and 16 litres of the organic form of GHB.

They also seized cash and McBeth's new Lamborghini.

McBeth is originally from New Zealand where his parents Denise and Murray founded the successful post office chain Pete's Post.

Li had worked as part of Karagiozis' chain of souvlaki restaurants, and like his mentor was a keen bodybuilder.

It would take a further 18 months before police could link Karagiozis to the drug ring.

With McBeth and Li behind bars, police allege Karagiozis got to work in 'directing the operations of the criminal syndicate'.

Court documents reveal that in the year leading up to his arrest, Karagiozis allegedly 'disposed of a number of real properties to reduce debts'.

With his co-founder McBeth in custody, Karagiozis went about promoting Auscoin as the price of a single Bitcoin boomed. He was invited to sit in the player's box with Nick Kyrgios and his brother Christos at the Australian Open (Pictured. It is not suggested that the Kyrgios brothers had any involvement in the alleged drug syndicate)

With his co-founder McBeth in custody, Karagiozis went about promoting Auscoin as the price of a single Bitcoin boomed. He was invited to sit in the player's box with Nick Kyrgios and his brother Christos at the Australian Open (Pictured. It is not suggested that the Kyrgios brothers had any involvement in the alleged drug syndicate)

Karagiozis made headlines for his goal of rolling out Bitcoin ATMs across Australia, making the cryptocurrency more easily accessible to would be users

Karagiozis made headlines for his goal of rolling out Bitcoin ATMs across Australia, making the cryptocurrency more easily accessible to would be users

Jackson Li (right), the third man arrested over the alleged drug syndicate, is understood to have worked at Karagiozis' souvlaki restaurant chain. He is currently facing eight charges

Jackson Li (right), the third man arrested over the alleged drug syndicate, is understood to have worked at Karagiozis' souvlaki restaurant chain. He is currently facing eight charges

The divestment came after the alleged drug syndicate allegedly spent $3,349,800 on a total of six investment properties between late-2016 and March 2019.

Karagiozis made national headlines as the price of Bitcoin boomed to AUD$26,000 in December 2017 and he rolled out a range of cryptocurrency ATMs.

During interviews, he described himself as 'self-made' and even had the words tattooed across his knuckles.

Shortly before Karagiozis was arrested on March 7 this year, police applied to restrain the properties under his control.

These included several bank accounts, a BMW motorbike, cash and cryptocurrency business.

Police used intercepted phone calls to uncover Karagiozis' ownership of a number of properties such as a home in south-west of Melbourne.

'We paid the fifty thousand... for settlement,' Karagiozis allegedly said in a call from March 6, 2019.

In February 2017, police discovered almost 19 kilograms hidden in international mail packages at Melbourne Airport. Eight months later they eventually allegedly traced the packages back to McBeth and Li. Upon raiding their properties they allegedly found cash and drugs (pictured)

In February 2017, police discovered almost 19 kilograms hidden in international mail packages at Melbourne Airport. Eight months later they eventually allegedly traced the packages back to McBeth and Li. Upon raiding their properties they allegedly found cash and drugs (pictured)

During the raids police seized a 1kg of ice, 700 grams of Cocaine, 10kg of MDMA and steroids, among other things

During the raids police seized a 1kg of ice, 700 grams of Cocaine, 10kg of MDMA and steroids, among other things

'It's probably already cleared cause its both Commonwealth, and I did a forty thousand dollar cash deposit... which is instant.'

Police will allege in court that these homes were bought with the proceeds of crime.

Karagiozis is charged with 14 offences relating to drug trafficking, importing and also dealing with the proceeds of crime.

McBeth is facing 16 charges while Li has so far been charged with eight offences.

The three co-accused are due to appear before the Melbourne County Court on May 23.

Sam Karagiozis, 27, and good mate […]

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