US traffickers planned to move $54 million to ‘crypto mecca’ Malta

A New Jersey crime boss sentenced in 2018 after leading a narcotics trafficking network, dreamt up a $54 million cryptocurrency scheme with Malta as its base.

Christopher Castelluzzo, who is serving concurrent 20-year federal and state prison sentences for drug distribution convictions, planned to move the cryto proceeds to Malta with the help of Brian Krewson, who held his digital wallet.

Intercepted on monitored prison calls, Krewson raved about Malta being “beautiful”, its English-speaking population, and its favourable “tax haven” rules.

The United States Attorney’s Office is now attempting to recover $54 million in cryptocurrency from Castelluzzo, who was sentenced in 2018.

The cryptocurrency is traceable to the proceeds of Castelluzzo’s cocaine crime ring operating in and around New Jersey.

Castelluzzo attempted to move 30,000 in ‘ether’ cryptocurrency out of the United States from prison in 2021, leading to the U.S. government seizing it.

From 2010 to 2015, Castelluzzo, caught through an investigation called Operation Skin Deep, sold cocaine on darknet sites in exchange for bitcoin and then used the bitcoin to buy the ether and other cryptocurrencies. After being imprisoned, in 2020 law enforcement learned from lawfully monitored jail calls that Castelluzzo had been discussing – from jail – moving large amounts of cryptocurrency offshore to Malta.

During such calls, Castelluzzo and Krewson plotted to move the boss’s cash overseas before law enforcement could seize it.

Krewson is intercepted telling Castelluzzo: “That’s my goal. Living in Malta, helping provide a tax haven for you guys.”

Castelluzzo complained that moving his cash to Puerto Rico required him to be “stuck on that island for 187 days… which is kind of like prison in itself.”

Krewson raved about “beautiful” Malta being a cyrpto mecca.

“They speak English, and if you have any kind of residual income coming in, which hopefully I’ll have from real estate… They fast track everything.”

And Castelluzo then asked whether he could acquire citizenship, to which Krewson says ‘yes’ and both start laughing at the prospect.

In further phone-calls, the two discussed alternatives in Ireland or the Bahamas, but Malta always featured in the conversation.

Krewson complains about Malta’s 35% tax rate for business profits but says that if a foreign company is tax-registered in Malta, then it can avoid the higher tax rates. “It’s only responsible for, for income generated in Malta. It doesn’t pay tax, basically on anything else. To qualify as headquarters, it could be something as simple as, we fly to Malta four times a year for quarterly meetings. And basically all decisions must be made there. Or it could be something as simple as hiring an interim officer who is Maltese or hiring an accountant who is Maltese who would work locally.”

Many criminals use cryptocurrency on the darknet to operate away from the prying eyes of law enforcement.

According to the US Justice Department document, Krewson – a dead ringer for Breaking Bad character William White who acts the part in corporate events – was employed by Castelluzo and Atwell to help store and launder the $54 million worth of cryptocurrency for his two friends.

Castelluzzo was convicted of cocaine trafficking in 2018. Before he was prosecuted and sentenced to 21 years, respectively, Castelluzzo had run a profitable narcotic trafficking business, selling between $2.5 million and $3 million of cocaine per month.

Investigators said co-accused Luke Atwell attempted to hide millions of dollars-worth of crypto he had acquired from dark web drug sales, claiming some of those proceeds were used to buy 30,000 ether, worth just $9,000 at the time of its purchase but now worth above $54 million.

Krewson was promised a cut for taking control of the crypto, the Justice Department claimed.

Despite giving assurances to Atwell and Castelluzzo about the security of the wallets in which the crypto was stored, Krewson provided the wallet’s password when police raided his home in July last year, allowing cops to transfer all the funds to a DOJ wallet, the court filings showed.