Boise Man Sentenced for Role in Conspiracy to Use Cryptocurrency to Launder Drug Proceeds – bigcountrynewsconnection.com

BOISE Michael Robert Osborn, 39, of Boise, has been sentenced to 188 months in federal prison for conspiring to distribute controlled substances and conspiring to commit money laundering, as announced by U.S. Attorney Josh Hurwit.

According to court records, Osborn played a key role in a lengthy conspiracy involving drug distribution and money laundering. Despite being incarcerated in the Idaho Department of Correction during the criminal activity, Osborn served as a supervisor. He utilized a contraband cellular telephone to communicate with other conspirators and facilitate the criminal enterprise. Osborn used cryptocurrency to purchase alpha-pyrrolidinohexanophenone (a-PHP), commonly known as bath salts, on the internet. The drugs were then shipped from outside the United States to Idaho, where other conspirators sold them and converted the proceeds into Bitcoin and other cryptocurrencies to conceal their origin. Osborn would then use Bitcoin to acquire more a-PHP for distribution. This scheme persisted from October 2019 until March 2021. Law enforcement agents, during the investigation, seized a digital wallet containing 7.83777 Bitcoin valued at approximately $280,000 at the time of the seizure, pursuant to a court-authorized seizure warrant.

Chief U.S. District Judge David C. Nye sentenced Osborn to 188 months in federal prison, followed by three years of supervised release, and ordered the seized Bitcoin to be forfeited. Osborn pleaded guilty to the charges on April 26, 2023, marking the conclusion of the case.

Earlier in the proceedings, codefendant Troy Thomas Wheeler, 48, of Meridian, was sentenced on September 11, 2023, to 86 months in federal prison for his role in the drug conspiracy. Wheeler, also incarcerated during the criminal activity, assisted Osborn in recruitment and supervision. He was sentenced to three years of supervised release following his prison term.

Osborns mother, Laura Russell, 66, of Mountain Home, was sentenced on June 22, 2023, to 40 months in federal prison followed by two years of supervised release for her involvement in the money laundering conspiracy. Russell collected drug proceeds and converted them into Bitcoin to conceal their nature and source.

Additionally, Angela Marie Klinkhamer, 44, of Caldwell, was sentenced on March 16, 2023, to 70 months in federal prison followed by three years of supervised release for her role in both the drug and money laundering conspiracy. Klinkhamer distributed drugs, collected proceeds, and provided them to codefendant Russell for conversion into Bitcoin. She pleaded guilty on November 28, 2022, to conspiracy to distribute controlled substances and conspiracy to commit money laundering.

U.S. Attorney Hurwit emphasized the commitment to removing drug dealers and their profits from the streets, utilizing money laundering and forfeiture statutes to seize their proceeds. He stated, "Drug traffickers should know it makes no difference whether they hide their illicit proceeds in a suitcase or a cryptocurrency wallet. We will track their money, find where its hidden, and seize it."

Todd Martin, Special Agent in Charge, IRS Criminal Investigation Denver Field Office, highlighted the expertise of IRS CI special agents in dismantling drug trafficking organizations by unraveling cryptocurrency schemes. He affirmed the continued collaboration among IRS CI, law enforcement partners, and the U.S. Attorneys Office to target and eliminate such threats.

The successful prosecution was the result of cooperative efforts from Homeland Security Investigations, IRS Criminal Investigation, the U.S. Postal Inspection Service, and the Idaho Department of Correction Special Investigations Unit. The case was prosecuted by Assistant U.S. Attorneys Christopher Atwood and Erin Blackadar.

This prosecution was part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation, aimed at identifying, disrupting, and dismantling high-level drug traffickers, money launderers, gangs, and transnational criminal organizations. OCDETF utilizes a prosecutor-led, intelligence-driven, multi-agency approach, leveraging the strengths of federal, state, and local law enforcement agencies against criminal networks.

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Boise Man Sentenced for Role in Conspiracy to Use Cryptocurrency to Launder Drug Proceeds - bigcountrynewsconnection.com