In what is believed to be the first fentanyl distribution case using the dark web and crypto currency in the Southwest Organized Crime Drug Enforcement Task Force (OCDETF) Region, a federal judge in San Antonio today sentenced 30-year-old Alaa Mohammed Allawi to 30 years in federal prison for distributing approximately 245 kilograms of fentanyl, cocaine, methamphetamine, oxycodone and Xanax. The distribution of fentanyl-laced oxycodone pills, through the use of the dark web and crypto currency, resulted in the overdose death of a U.S. Marine stationed at Camp Lejeune, North Carolina, and serious bodily injury to two Grand Forks, North Dakota, residents.
That announcement was made today by U.S. Attorney John F. Bash, DEA Special Agent in Charge Will Glaspy, Houston Division; Inspector in Charge Adrian Gonzalez, U.S. Postal Inspection Service, Houston Division; IRS-Criminal Investigation Special Agent in Charge Richard D. Goss, Houston Field Office; Naval Criminal Investigative Service Special Agent in Charge Charles Humenansky, Carolinas Field Office; San Antonio Police Chief William McManus; and, University of Texas at San Antonio Police Chief Gerald Lewis, Jr.
In addition to the prison term, Senior U.S. District Judge David A. Ezra entered a $14.32 million money judgment against Allawi based on his online dark net sales profit. Judge Ezra also ordered that Allawi forfeit to the government his San Antonio residence, valued at approximately $270K; five firearms including an AR style assault rifle; approximately $28K in U.S. currency; more than $21K in crypto currency, an assortment of jewelry valued at over $31K, four (4) vehicles including a 2013 Maserati Gran Turismo, and any and all rights in a “DRNK coffee + tea” franchise (in California).
“The United States welcomed Allawi into our country from war-torn Iraq in 2012. But instead of taking advantage of the many opportunities this country affords, he decided to make money by peddling a deadly narcotic to Americans in the grips of addiction,” said U.S. Attorney Bash. “This case illustrates many of the emerging threats that law enforcement is confronting. Allawi and his co-conspirators manufactured and distributed oxycodone laced with deadly fentanyl – over 350,000 such pills – to people suffering from opioid addiction, targeting a college campus here in San Antonio. At least one victim – a United States Marine – died from a fentanyl overdose, and at least two others suffered non-fatal overdoses. The co-conspirators attempted to conceal their activities by operating through the dark web and using seven different crypto-currencies. I am proud of our office and the law enforcement partners who uncovered and destroyed this conspiracy. Thirty years in federal prison is a just sentence for this despicable conduct.”
On June 21, 2019, Allawi pleaded guilty to one count of conspiracy to possess with intent to distribute fentanyl resulting in death and serious bodily injury, one count of possessing a firearm in furtherance of a drug trafficking crime and one count of conspiracy to commit money laundering.
According to records, Allawi arrived in the U.S. from Iraq in 2012 on a SQ1 visa granted to him based on his service as an interpreter for the Department of Defense while in Iraq.
This investigation began in 2015, when the San Antonio Police Department and the University of Texas at San Antonio (UTSA) Police Department began looking into a surge in various prescription pills found on the campus and in the student housing of UTSA. Allawi was subsequently identified as the manufacturer and supplier of the pills. By pleading guilty, Allawi admitted that beginning in 2015, he purchased fentanyl and industrial size pill presses from the dark net website called AlphaBay. Allawi also used AlphaBay to sell his pills which were laced with fentanyl or methamphetamine. Allawi accepted seven different crypto currencies, such as Bitcoin and Ethereum, as payment for the pills. AlphaBay has been subsequently shut down by law enforcement.
There are a total of eight (8) defendants in this federal indictment. Three, including Allawi, have been sentenced. Five have entered guilty pleas and are awaiting sentencing. A 9th defendant, Kunal Kalra, age 25 of Los Angeles, is charged by an Information pending in the Central District of California with conspiracy to launder monetary instruments. Allawi laundered his digital currency through Kalra. Kalra and Allawi both set up sham businesses as fronts to transfer the digital currency into U.S. currency, and vice versa. In so doing, Allawi used his illegal proceeds to purchase interest in a business, vehicles, residences, and jewelry.
On May 17, 2017, authorities executed a search warrant at Allawi’s stash house in Fort Bend County and seized ½ kilogram of fentanyl powder, ½ kilogram of crystal methamphetamine, ½ kilogram of powder cocaine, 10 kilograms of Hydrocodone pills laced with fentanyl, four kilograms of Adderall pills laced with methamphetamine, five kilograms of Xanax tablets, multiple industrial-size pill presses and four firearms. The total number of pills distributed on the dark web by Allawi during his scheme is estimated to be around 850,000, including:
Oxycodone laced with fentanyl 359,553 pills Weight 35.9 kilograms
Adderall laced with methamphetamine 342,551 pills Weight 173.6 kilograms
Xanax 45,395 pills Weight 32.36 kilograms
“Today’s sentencing of Allawi is an indication of the sophistication and callousness with which Allawi conducted his illegal drug activities. From his use of the dark web, to his clandestine manufacturing of counterfeit pills laced with fentanyl, to his drug sales targeting college students, Allawi operated with little concern for the people in our communities,” said DEA Special Agent in Charge Glaspy.
Regarding the overdose death, NCIS Special Agent in Charge Humenansky noted that fentanyl-laced pills sold by Allawi were purchased using the dark web by Marine Sergeant Anthony P. Tognietti, in coordination with Marine Corporal Marcos Jamie Villegas; both of whom were stationed at Camp Lejeune, North Carolina. During a party in 2017, Villegas gave a fentanyl-laced pill to 20-year-old Corporal Mark M. Mambulao, who died shortly after consuming it. Villegas was kicked out of the Marine Corps on Tuesday and was arraigned yesterday in federal court in the Raleigh Division of the Eastern District North Carolina, for distributing a quantity of pills containing oxycodone and fentanyl, and aiding and abetting. Sgt. Tognietti was arraigned on the same charges in April of this year.
“This case underscores the value of law enforcement agencies working together. The U.S. Postal Inspection Service (USPIS), and the Drug Enforcement Administration (DEA) were actively investigating Allawi when NCIS made them aware of the death of Corporal Mambulao. The subsequent joint investigation by DEA, USPIS and NCIS linked the pills purchased by Villegas to Allawi, which ultimately resulted in the charge of conspiracy to possess with intent to distribute 400 grams or more of fentanyl resulting in death or serious bodily injury, and today’s stiff 30-year sentence for Allawi,” stated NCIS Special Agent in Charge Humenansky.
“Opioids such as fentanyl are a public health crisis that have taken countless lives and destroyed many more,” said U.S. Postal Inspector in Charge Gonzalez. “Postal Inspectors have always made it their mission to protect the public and the U.S. Postal Service from drug traffickers who try to use the mail to distribute their poison. The sentence handed down today should serve as a reminder to other perpetrators engaged in this type of criminal activity that we will continue to work closely with all of our law enforcement partners to ensure they are brought to justice.”
“Today’s sentencing of Alaa Allawi for his role in the distribution of illegal drugs laced with deadly fentanyl and money laundering of the illegal proceeds from his operation is a victory for the American public and a defeat to drug traffickers everywhere,” said IRS Criminal Investigation Special Agent in Charge Goss. “The Special Agents of IRS Criminal Investigation continue in their mission to disrupt the flow of ill-gotten gains that is the life-blood for these criminals.”
Agents and officers with the DEA, U.S. Postal Inspection Service, IRS Criminal Investigation, Naval Criminal Investigation Service (NCIS), San Antonio Police Department and the University of Texas at San Antonio Police Department conducted this OCDETF investigation. Assistant U.S. Attorney Sarah Wannarka is prosecuting this case on behalf of the government. Mr. Bash extends his appreciation to the U.S. Attorney’s Offices in the Eastern District of North Carolina, District of North Dakota and the Central District of California for their cooperation with this prosecution.
The principal mission of the OCDETF program is to identify, disrupt and dismantle the most serious drug trafficking, weapons trafficking and money laundering operations, and those primarily responsible for the nation’s illegal drug supply.
Federal charges are not considered as evidence of guilt. The defendants are innocent until proven guilty in a court of law.
