Feds cite missing cryptocurrency to oppose release of man awaiting trial

News | August 28, 2022 By:

On Friday, August 19, 2022, the federal government filed an opposition to a motion filed by Jeffrey Stephens to reopen his detention hearing in the United States Court for the Western District of Washington. The case is styled as ‘United State of America v. Stephens’ with case number #CR21-129 JCC.

On August 11, 2021, a grand jury indicted Mr. Stephens for conspiracy to distribute controlled substances and laundering of monetary instruments. Mr. Stephens, who has been in custody since September 2021, is alleged to be a prolific high-level drug vendor, selling multiple controlled substances on the Dark Web utilizing various monikers.

The alleged conspiracy includes allegations the defendant laundered over $ 1,000,000 in drug proceeds through the Dark Web utilizing cryptocurrencies, sending significant sums of currency overseas to drug suppliers. In support of the government’s motion for detention, alleged wiretap conversations were proffered to show the defendant poses significant risks of danger and non-appearance, alleging the defendant discussed intentions to kill law enforcement officials and move to another country. The defendant has a minimal history of legitimate employment, and a number of firearms and high-capacity magazines, as well as body armor and numerous digital devices, were allegedly found during a search of the defendant’s residence.

Mr. Stephens filed a motion, requesting that the trial be continued to February 13, 2023. He cites the need to review extensive discovery, the complexity of the drug trafficking and money laundering investigation in his case, and the potential serious consequences of a conviction.

In a thirteen-page opposition to Mr. Stephens’ motion, the government stated that “ultimately, given the strength of evidence against him, substantial amounts of unaccounted for cash, potential access to cryptocurrency reserves, at least one international contact, and statements evincing an interest in living in a foreign country, Stephens poses a flight risk and should be detained on that ground.”

The opposition reads:

“Stephens likely has access to substantial resources that both provide additional motivation for him to flee and would help him do so. In 2021 alone, Stephens laundered more than $249,000 in cryptocurrency through the undercover. At the time of takedown, law enforcement did not locate substantial amounts of cash, or significant amounts of controlled substances. Moreover, if Stephens has cryptocurrency, and he has access to seed phrases, he could reconstitute his cryptocurrency stash anywhere he could connect to the internet.”

The opposition goes on:

“By his own admissions, Stephens has connections to at least one foreign source of drug supply. Such a connection could make it easier to flee. Moreover, though Stephens dismisses his statements evincing a desire to move to Estonia, the audio recordings of the undercover meetings strongly suggest that Stephens does not see a future for himself in Washington State.”

The opposition continues:

“Stephens has failed to meet the requirements for reopening his detention hearing, and the facts support his continued detention. Stephens’s motion should be denied.”

A copy of the original filing can be found here.