Sky Global is accused of selling encrypted devices to drug dealers
The US Department of Justice has announced an indictment against the president and partner of Sky Global, a Canadian-based company, for allegedly providing international drug traffickers with on-demand coded phones.
In only the second case of its kind, CEO Jean-Francois Eap and former distributor (Thomas Herdman) of Sky Global are facing charges of conspiracy to violate RICO.
Arrest warrants have been issued against them, usually the RICO Act against Organized Crime, and it was previously used against another encrypted phone company called Phantom Secure.
Reports said the Justice Ministry's announcement comes after a campaign in Europe that saw nearly one billion messages sent between Sky Global customers decrypted by European domestic law enforcement agencies.
The indictment alleges that Sky Global has installed advanced encryption software across devices designed to help drug dealers evade police surveillance.
Dedicated phones - which included iPhones, Pixels, PlayBerry and Nokia devices - allowed their users to communicate with each other in a closed network, with the company directing activity through encrypted servers located in Canada and France.
Sky Global's purported purpose is to facilitate international drug trafficking that includes the import and export of heroin, cocaine and methamphetamine.
The drugs were distributed in the United States, Canada, Australia, Asia and Europe.
While the encrypted communications system was also allegedly used to conceal money laundering activities that involved Bitcoin transactions via the Sky Global website.
In order to conceal the project, Sky Global employees apparently set up shell companies to hide the proceeds from sales of the encrypted software.
About 70,000 custom devices are in use worldwide, according to the Department of Justice.
Acting US Attorney General Randy Grossman said in a statement: The indictment alleges that Sky Global has made hundreds of millions of dollars by providing a service that has allowed criminal networks around the world to conceal their international drug trafficking activity from law enforcement.
“This investigation should send a serious message to companies that think they can help criminals with illegal activities,” he added.
The CEO of the company denied these allegations, and said: He believes that the targeting is taking place because the company is building tools to protect the basic right to privacy, and these allegations are baseless and completely false.
He added: We defend the protection of privacy and freedom of expression in an era when these rights are under increasing attack, and we do not condone illegal or unethical behavior by partners or clients, and classifying anyone who values privacy and freedom of expression as a criminal is an outrageous matter.