back to article CEO of smartmobe outfit Phantom Secure cuffed after cocaine sting, boast of murder-by-GPS

An arrest by US authorities last week has brought to light alleged associations between encrypted phone supplier Phantom Secure and international drug trafficking. The arrest followed an Australian Federal Police bust of a cocaine shipment from the United States to Australia. Rather than merely being a passive supplier of …

  1. Voland's right hand Silver badge

    So it possible after all

    So it is possible to make money building secure handsets. Interesting...

  2. Dave 126 Silver badge

    Re: So it possible after all

    It's a subscription social network that has made money without an ambitious IPO or any advertising!

  3. BebopWeBop Silver badge

    Re: So it possible after all

    word of mouth - still an effective marketing strategy :-)

  4. Flocke Kroes Silver badge

    I thought the FBI were not supposed to endorse commercial products

    Did Nicholas Cheviron really mean to say that all legitimate users of Phantom Secure remain anonymous to all law enforcement partners of the FBI?

  5. teknopaul Bronze badge

    Re: I thought the FBI were not supposed to endorse commercial products

    Probably mean that thay have pwnd it ages ago, listened to all the calls without discrimination and are now running around the world busting everyone.

    Dumb drug dealers, the only security for drug dealers is security by obscurity. When they know that you are securing something you've lost already. If gps was used to track informants the bad guys obviously had a backdoor built in. Be surprised if NSA _didn't_ find it.

  6. Anonymous Coward
    Anonymous Coward

    I can see Governments using this as an argument to ban Encryption outright

    1) If you nothing to hide you have nothing to fear.

    2) If you use Encryption you must have something to hide.

    3) If you use Encryption you must be a PaedoDrugDealerTerrorist

    4) If you use Encryption be very afraid.

    All neatly expressed by the logic below:

    Monty Python Witch Sketch

  7. Anonymous Coward
    Anonymous Coward

    Re: I can see Governments using this as an argument to ban Encryption outright

    That's why it's important to make the distinction,

    This is criminal enterprise creating their own system of encryption, while the government want to catch these people it won't be done by removing encryption because they are brewing their own. The encryption the government wants to break is the one that every normal person uses.

    I would even go so far as saying that this is a perfect example of why they shouldn't break encryption, it's clearly a waste of time when those that it is intended to catch won't use it.

  8. Bob Ajob

    Re: I can see Governments using this as an argument to ban Encryption outright

    Indeed. With this issue when a small subset of dodgy users of a specific obscure encryption algorithm or hardware device are the enemy, its fair to call it an encryption witch hunt. In reality there are far more legitimate users of encryption so we should ALL be protected from backdoors. The overwhelming majority of users are good guys. Even considering the dark onion markets and shadier parts of the internet those are still vastly outnumbered by perfectly legal and essential secure communications, modern business depends on keeping electronic transactions secure and trusted. When back doors or even unintentional vulnerabilities are introduced, they can and eventually will be discovered and exploited by the enemy, maybe the trick is to design an algorithm that booby traps any big brothers back door keys so that they can only be used once and in a very loud manner that forces keys to the front door to be changed, unsure if that is even technically possible but it's the closest analogy I can think of for the authorities brute forcing entry to physical property regardless of a warrant certificate. As long as the use of any secondary back door key is forced to be public (loud) and permanently breaks the primary key then at least the trust is still held with the digital locksmiths (root CAs?) and nobody else. I still don't like introducing any weaknesses into encryption at all but if back doors are forced in then I'd rather they were publicly approved not snuck in without broad review by experts and code released as open source.

  9. Chris G Silver badge

    Quite simple realky

    Ban criminals and make their activities illegal.

    Governments should do something about this.

  10. 's water music Silver badge
    Holmes

    Re: Quite simple realky

    Ban criminals and make their activities illegal.

    Governments should do something about this.

    But that will only stop the good guys from being criminals. Then all your criminals will be bad guys.

    Wait, what?

  11. Dodgy Geezer Silver badge

    Re: Quite simple realky

    Careful, now!

  12. adam payne Silver badge

    However, in reported discussions with Ramos, it seems GPS capability is left intact, with very sinister intent. After Ramos said the primary vulnerability is an informant, an undercover agent said GPS helped "locate and kill the informant". Ramos response: "Yeah, it does".

    Well that's one way to incriminate yourself.

  13. Anonymous Coward
    Anonymous Coward

    Yeah, but its not personal

    just business..

  14. Anonymous Coward
    Anonymous Coward

    > an undercover agent said GPS helped "locate and kill the informant". Ramos response: "Yeah, it does".

    > Well that's one way to incriminate yourself.

    Indeed. The GPS may help in locating someone, yes, but killing him?

    Report him for false advertising, I say.

  15. VikiAi
    Go

    Maybe these phones can actually emit lethal radiation?

  16. Michael H.F. Wilkinson Silver badge

    It's logical, Jim

    ... no law enforcement partner “has identified even a single legitimate Phantom Secure user”.

    Which might not be surprising given the anonymity the device gives. After all, if you use such a device because you are a harmless, but paranoid nutter, and never break the law, how would law enforcement find you, or even need to find you, for that matter? It does sound like the kind of device criminals would use gladly, but the logical conclusion that only criminals use it suggested by the statement is flawed, unless they have identified the vast majority of Phantom Secure users.

  17. Peter2 Silver badge

    Re: It's logical, Jim

    Most people won't even switch from Google to another search engine like Qwant (for free!) to protect their privacy.

    I struggle to accept that many people just interested in protecting their privacy would be willing to splash out $2-3k for a 6 month contract/$4-6k PA. That's a bit steep. Also, the requirement that customers be referred from an existing user instead of doing the usual sales pitch on a website would appear to indicate that something dodgy is going on.

  18. Pascal Monett Silver badge

    Indeed. We're not talking about VHS home-taping here, we're talking about a phone you can only get if you're in touch with a proven criminal for whom a 6-month subscription costing at leasy $3K is worth it.

    These are not your innocent TOR users mixed in with criminal elements, anyone can use TOR. To use this phone, you have to start by knowing, and being known by, a criminal.

    So let's not start banging the drum of Individual Freedom just right now, okay ?

  19. Dave 126 Silver badge

    So, its almost like an exclusive social network, with subscription cost of the phone being a way of showing you're not a time waster. Can't help but think there's a way of monetising this concept without involving cocaine (in so far as anything involving the rich doesn't involve cocaine).

    Importers prefer to deal with as few people as possible. They'd rather all the little fish east other until there's just a few big fish.

  20. Cuddles Silver badge

    Re: It's logical, Jim

    "After all, if you use such a device because you are a harmless, but paranoid nutter, and never break the law, how would law enforcement find you, or even need to find you, for that matter?"

    Indeed. They're basically saying "We've never found anyone that we weren't looking for and wouldn't be able to find anyway".

    That said, your average paranoid nutter isn't likely to be paying a five figure per year subscription for a phone, especially given the compatibility issues that things like PGP cause for communicating with normal people who overwhelmingly don't use them. It's really only useful for small, rich groups who have good reasons to talk among themselves without anyone else being able to see. That basically means corporations dealing with trade secrets, governments, and criminals. The Australian government isn't using these things, most companies prefer to just blithely splurge their data all over the internet, so that doesn't leave many other options. Maybe there are some extremely rich and insular groups of paranoid nutters who imported 10,000 of these phones to Australia (after all, how would we know about them?), but lets be honest, it's drug dealers.

  21. DCFusor Silver badge

    Re: It's logical, Jim

    That basically means corporations dealing with trade secrets, governments, and _other_ criminals.

    Fixed it for you, friend.

  22. Anonymous Coward
    Anonymous Coward

    Re: It's logical, Jim

    > Also, the requirement that customers be referred from an existing user instead of doing the usual sales pitch on a website would appear to indicate that something dodgy is going on.

    Plus, what's the bet the manufacturer has a copy of all the data in every phone that they sell?

  23. Adam 1 Silver badge

    Re: It's logical, Jim

    > That basically means corporations dealing with trade secrets, governments, and criminals

    Sorry, I'm not following. Why did you say the same thing three times?

  24. Adam 1 Silver badge

    > These are not your innocent TOR users mixed in with criminal elements, anyone can use TOR

    Aren't they? Some of us have the romantic thought about having the right to the presumption of innocence and letting any facts to the contrary be established in a court of law.

    Just because you or I don't think we have any secret worth several K per year, does not mean that others do not have legitimate need for this sort of security. I can well imagine a business in an industry where millions or even billions worth of IP could be the target of theft by companies with not such a long arms length relationship with their ruling party.

  25. Mephistro Silver badge
    Devil

    Nice!

    Now the FBI can start applying the same logic to the NRA's "big sponsors". Any statement by weapons makers or sellers regarding e.g. stopping power, range or shooting cadence can be used as evidence of criminal intent!

    (Take this comment with a grain of salt. 8^)

  26. Lee D Silver badge

    So... the encryption serves its purpose but was used by the wrong people.

    And not being able to identify a single legitimate user? That might just be because the anonymity is actually pretty good, not that everyone using it is a criminal.

    Though they are rightly chasing crimes and criminals, the fact that the devices are secure is surely neither here not there. The FBI couldn't get into an iPhone, so is that the same?

    I'm more worried that in the age of secure communications, law enforcement are baffled about how to stop illegal drug shipments, distribution and "following the money" and can only suggest "let's not let anyone have secure devices" as a solution.

    How about this? Assume the problem will only get worse. Assume every company will release secure phones. Assume every criminal will get a secure phone out of your control no matter what measures you try to enforce. The same way that criminals could just build an encrypted walkie-talkie and shut you out of that conversation too. Now, extrapolating that to the global population, how are you going to stop people growing, shipping and selling illegal drugs?

    Because that's the answer you need. Not "well, obviously, nobody can be secure". I'd suggest things like more undercover operations (so you end up with one of their phones "legitimately"), better controls on imports and customs (seems to me that an awful lot slips through), better monitoring of borders (again, a lot slips through), and monitoring finances (isn't cash basically going to die soon?). But, of course, that involves law enforcement personnel being paid and doing their jobs. It's so much easier to just say "Apple, sort it out", or similar.

    By no means am I a fan of even casual, "soft" drug use in any way, shape or form. (It's illegal, so don't do it, or instead campaign for it to be legal) But I damn well would rather they got off their backsides and either legalised certain things (thereby taking them off the market and police hands, and generating tax) which would then leave you focused and funded to combat the more dangerous stuff by ways and means core to the traditional method of policing. Before smartphones you didn't have this information either, and yet somehow you managed to catch the criminals too.

  27. lglethal Silver badge
    WTF?

    Ok, I've reread this article twice, I cant find anywhere in it comments saying that the police are trying to get encryption banned because of this incident. Do you have a different version of the article to me, perhaps?

    The article talks about the police busting a drug dealer and getting access to the phone and using that to find other dealers. It also talks about various busts where they have found stacks of these phones, and it talks about using undercover operatives to talk to the head of this company and him admitting that the phones where for nefarious purposes.

    So I think you've got on your hobby horse here without cause... Maybe try reading the article again, before going for another ride...

  28. Lt.Kije

    Banning encryption.

    Your facts are exactly correct, but..

    ... do you want to put your money on a wager that this will be used as an excuse to ban?

    I'll take the bet any day, and I'd also bet that many in our commentard community would also.

  29. PurpleMoneky
    Go

    Lets have a proper conversation.

    Simple solution to all illegal drug dealing, make ALL drugs legal over a certain age and sole from normal pharmacies.

    It wont massively increase usage (because anyone who wants it can get it now), but would make things safer overall.

    It will get away from conversations like this:

    Doc: What have they taken?

    Friend of patient: Some white pills we got from Dave.

    Doc: Great, i'll call the morgue.

    To conversations like this

    Doc: What have they taken?

    Friend of patient: Three "Gov Mark 2 MDMA".

    Doc: Great, Nurse - 1cc of Gov Anti-MDMA.

  30. Anonymous Coward
    Thumb Up

    Old-school FTW

    Nice to see the FBI still knows how to bust criminals the old-fashioned way, with undercover agents gathering hard evidence.

    Incidentally, this perfectly illustrates why law enforcement doesn't need mass surveillance dragnets and encryption bans or backdoors. Criminals can and will evade all that. Nevertheless, they're vulnerable. If they don't get caught by informants, they may be tortured/murdered on suspicion of being one, or simply stabbed in the back. What a brutish, paranoid, miserable existence.

  31. Anonymous Coward
    Anonymous Coward

    "Spot the criminal" -game here

    Basically the Police tells us here that if you have a phone like this, you are a professional drug dealer and then they invent lot of claims to support that, but no actual proof.

    Also they haven't found "a single one" non-criminal users. Hardly an argument when they haven't even tried to do that.

    Irrelevant anyway as they would claim having not found any even if they found one, as it doesn't fit into argument and Police never presents facts which don't fit into their argument. Police exists for getting people convicted and if someone really is innocent, too bad, they present only the facts they like.

    In that context 'guilty by association' is a very slippery slope. Or we can say we already have a police state where someone is guilty when a police announces so: Nothing else is needed.

  32. Barry Rueger Silver badge

    Re: "Spot the criminal" -game here

    Basically the Police tells us here that if you have a phone like this, you are a professional drug dealer and then they invent lot of claims to support that, but no actual proof.

    This. It always amazes me when otherwise intelligent readers accept whatever police say as being honest or accurate. I'm assuming that large parts of the article merely repeat what was in the cops' Press Release. Most of what's there can't be relied on until it's been corroborated by someone outside of law enforcement.

    Beyond that this should terrify people: the US cops are now saying that anyone, anywhere in the world, that provides some kind of "secure" communication tool is open to prosecution unless they can "prove" that most of their customers are "non-criminal."

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