A 34-year-old man has admitted in federal court to manufacturing hundreds of thousands of knockoff Xanax pills in the basement of his parents’ Sparks home, and selling them for millions of dollars on a dark corner of the internet.
He called himself “Xanaxman.”
Ryan Farace, of Sparks and Reisterstown, pleaded guilty Tuesday to federal drug charges and money laundering. His co-defendant, Robert Swain, 34, of Freeland, pleaded guilty to money laundering.
With his plea, Farace admitted to operating an elaborate manufacturing lab in his parents’ basement, with a pill press the size of a vending machine, pill molds stamped with “Xanax,” pill dye and mixing equipment he bought on eBay.
Between November 2013 and June 2017, he ordered packages of Alprazolam — the generic form of Xanax, a sedative to treat anxiety and panic disorders — pressed the powder into pills, stamped them with the “Xanax” brand name, and shipped them as far as Memphis, Tenn.
Farace’s plea agreement did not explain how he obtained the Alprazolam.
He admitted to taking orders for, or shipping, about 420,000 pills between December 2013 and November 2014 alone. Farace solicited orders for his homemade Xanax on hidden websites known as the dark web.
Wearing a prison jumpsuit, he appeared Tuesday in U.S. District Court in Baltimore to plead guilty. He said little, answering the judge with “yes” or “no.”
He faces 25 years in federal prison and is scheduled for sentencing Nov. 30.
Swain, his co-defendant, faces 20 years for money laundering. He is scheduled for sentencing Jan. 25.
With his plea, Swain admitted to helping Farace by opening post office boxes. He also admitted to driving with Farace to New Jersey to exchange the digital currency Bitcoin for $200,000 in cash.
Federal authorities seized more than $22 million in assets from Farace and Swain, including $17 million in Bitcoin, $2.5 million in computer equipment, and more than $1.5 million in cash.
Police have been engaged in a global cat-and-mouse game with users of online drug markets for years. The sites are typically entered using a special web browser that hides users’ identities, and using bitcoin allows buyers and sellers to step outside the U.S. banking system, where transactions are easily tracked. Encrypted messaging allows for secret drug deals.
But the system does have vulnerabilities. Packages must be mailed, bitcoins must be converted to cash to be spent in the real world, and law enforcement has sometimes been able to break through technological protections on the dark web sites.
An investigation into a Harford County drug dealer in 2012 became part of the operation that took down Silk Road, the first big online drug market. Federal authorities worked with European police last year to take the sites Hansa and AlphaBay offline.
The Hansa site was raided by Dutch authorities, who recovered a trove of information about buyers and sellers — including transactions by a “Xanaxman.”
Farace admitted to laundering his profits through Hope’s Horizon LLC, a drug rehab facility in Perry Hall. He said he provided bundles of cash to the owner, who deposited the money into bank accounts, then paid the money back to Farace as a purported salary.