FBI arrests CEO of Phantom Secure for allegedly aiding organized crime

The FBI has arrested Vincent Ramos, the CEO of Phantom Secure, an established maker of custom smartphones. Ramos allegedly aided criminal organizations by providing devices that were modified to hide their illegal activities, Motherboard reported.

According to a complaint filed in Southern District of California, Ramos stands accused of conspiracy to conduct enterprise affairs, conspiracy to distribute narcotics, and aiding and abetting. Most importantly, the complaint alleges that Ramos and Phantom Secure’s products were not simply used by criminals, in the way a criminal might use a Samsung device or secure messaging service, but were specifically made to help criminal organizations carry out illegal acts.

According to the complaint, Phantom Secure modifies Blackberry phones by removing the web browser, GPS, and standard messaging services. The company then installs Pretty Good Privacy software in order to facilitate the sending of secure messages. The messages are then routed through overseas services. The complaint specifically mentions Hong Kong and Panama as two countries which are “believed by PHANTOM SECURE to be uncooperative with law enforcement.”

The complaint, which was written by FBI  Special Agent Nicholas Cheviron, says that Phantom Secure’s devices have been used by various criminal organizations, including the Sinaloa cartel. The “upper echelons members” of international criminal organizations have also made use of the hardware. Cheviron estimates that about 20,000 Phantom Secure devices are currently in use around the world. Another source familiar with the industry told Motherboard that Phantom’s hardware has been sold to numerous criminal organizations such as the Hell’s Angels, and were particular popular in Latin America.

During a sting operation, the Canadian Royal Mounted Police purchased a number of Phantom phones and were told by the company’s representatives that the devices were safe to use for drug trafficking. In fact, Ramos allegedly said that they made the phones specifically with drug traffickers in mind. They also claimed that a co-conspirator that had been arrested requested that Phantom remotely wipe his device.

In addition to the evidence gathered by the Mounties’ sting operation, authorities did have one cooperating witness in the form of a former Sinaloa drug trafficker. The unnamed witness stated that he used a Phantom device while working to transport five kilograms of cocaine.

As of the time of this writing, neither the FBI nor Ramos’s attorney have commented on the case.

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