Smartphone CEO Arrested After Drugs Bust
The CEO of a smartphone company has been arrested on suspicion of abetting international criminal networks including drug runners.
Phantom Secure Enterprises was set up specifically to offer criminals a highly secure, encrypted network via which to communicate, the FBI claimed in an arrest warrant for its boss, Vincent Ramos.
The CEO, and other unnamed employees and associates, were charged with racketeering and drug trafficking offenses after the Canadian resident’s arrest in California.
Phantom Secure devices are BlackBerry handsets with all hardware and software including voice, microphone, GPS, camera, internet and Messenger removed. PGP is then installed on email routed through servers in Hong Kong and Panama, countries which were chosen for their non-co-operation with the US, it is claimed.
These servers are then further cloaked in “multiple layers of virtual proxy networks,” according to the warrant.
Prospective clients must allegedly receive a personal reference from an existing customer, and the company does not request, track or record their real names.
Customers apparently pay $2000-3000 for a six-month subscription, with around 20,000 devices in operation around the world, half of which are located in Australia, the FBI claimed.
It’s there that Australian officers got hold of a device after arresting a drug smuggler, and then proceeded to arrange a shipment of cocaine Down Under which was intercepted.
This is despite functionality whereby individuals who establish the closed networks which operate with Phantom Secure can request compromised devices on those networks be remotely wiped.
Interestingly, the GPS functionality that is supposedly removed is allegedly kept on devices without the knowledge of users to allow gang leaders to locate and kill informants, the arrest warrant claimed.
It’s alleged that Ramos made tens of millions of dollars from the company.
The revelations are likely to spark another flurry of demands for encryption backdoors for law enforcers, despite the judgement of cryptography experts that this is impossible to achieve without undermining security for the majority.
Source: Information Security Magazine