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COURT DOC: USA v. Tibo Lousee, Klaus-Martin Frost, and Jonathan Kalla

May 1, 2019

Following a nearly two-year international investigation involving U.S. law enforcement and authorities in Germany and the Netherlands, federal prosecutors have charged three German nationals with being the administrators of Wall Street Market (WSM), which was one of the worlds largest dark web marketplaces that allowed vendors to sell a wide variety of contraband, including an array of illegal narcotics, counterfeit goods and malicious computer hacking software.

A criminal complaint filed Wednesday in United States District Court in Los Angeles alleges that the three defendants, who currently are in custody in Germany, were the administrators of WSM, a sophisticated online marketplace available in six languages that allowed approximately 5,400 vendors to sell illegal goods to about 1.15 million customers around the world. Like other dark web marketplaces previously shut down by authorities Silk Road and AlphaBay, for example WSM functioned like a conventional e-commerce website, but it was a hidden service located beyond the reach of traditional internet browsers, accessible only through the use of networks designed to conceal user identities, such as the Tor network.

For nearly three years, WSM allegedly was operated on the dark web by the three men who now face charges in both the United States and Germany. An ‘exit scam’ was allegedly conducted last month when the WSM administrators took all of the virtual currency held in marketplace escrow and user accounts believed by investigators to be approximately $11 million and then diverted the money to their own accounts. Exit scams are common among large darknet marketplaces, which typically hold money in escrow while a vendor delivers illicit goods. (Source: U.S. Department of Justice)

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