Arizona Republic

PHOENIX — A British right-wing party adviser has admitted posing as an international money launderer on the "dark web," aiming to rip off criminals in Phoenix, court records show.

George Swinfen Cottrell, 22, has been held in Phoenix on money laundering, mail and wire fraud and blackmail charges since summer. He pleaded guilty Monday to a scheme that involved extorting money from drug traffickers.

"I falsely claimed that I would launder the criminal proceeds through my bank accounts for a fee," Cottrell said in his plea agreement. "Rather than launder any of the money, though ... I intended to retain the money."

Only one problem: The drug dealers he targeted were undercover federal agents.

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Cottrell was arrested in July after attending the Republican National Convention in Cleveland with Nigel Farage, the former head of the United Kingdom's Independent Party.

The politically connected Cottrell ran Farage’s office and handled media requests for the populist party, which has taken a hard-line stance on reducing immigration and supports Great Britain's exit from the European Union.

Cottrell was the front man for a 2014 scheme that started when someone identified only as the Banker advertised money-laundering services on a black-market website through a dark-web network called the Onion Router, court records say.

The Onion helps to mask the identity of Internet users and creates portals to websites that offer a range of illegal activities.

Undercover agents posing as drug dealers contacted the Banker about laundering $50,000 to $150,000 in drug money a month. According to a July indictment, the Banker directed agents to an associate named Bill.

Bill, who was later identified as Cottrell, exchanged instant messages from London to agents in Phoenix through an encrypted platform called Cryptocat, court records say.

Would launder large amounts of cash

Cottrell said in his plea agreement that he "explained various ways criminal proceeds could be laundered," including ways to transfer large amounts of cash out of the United States to avoid reporting requirements and disguising proceeds from criminal activity as legitimate business income for tax purposes.

Cottrell told agents he could launder the money with complete anonymity using offshore accounts and in 2014 agreed to meet agents in Las Vegas, according to the indictment.

In June 2014, Cottrell told undercover agents to send $20,000 to an associate in Colorado who would move the money into his bank accounts before transferring it back to them, according to the indictment.

About a week later, Cottrell threatened to report the money laundering and drug trafficking to authorities unless the agents agreed to pay him 130 bitcoin, at the time worth $80,000.

Bitcoin is an alternative currency or cryptocurrency exchanged electronically. Coin markets on Tuesday reported the value of a single bitcoin was $790.41. Bitcoin is accepted at some Las Vegas casinos as currency.

The case was investigated by the Internal Revenue Service criminal-investigation unit in Phoenix. IRS agents arrested Cottrell at Chicago O'Hare International Airport in July as he exited a plane from Cleveland on his return to London, court records show.

A judge found Cottrell was a flight risk and he was denied bail.

The British newspaper The Telegraph reported in August that Cottrell is worth an estimated $310 million. He is the nephew of British Lord Alexander Fermor-Hesketh, a former Conservative Party treasurer who joined the Independent Party in 2011.

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Cottrell initially was charged with 21 felonies. In exchange for his guilty plea, federal prosecutors have agreed to drop all but one count of wire fraud.

Cottrell faces a maximum 20 years in prison and a $250,000 fine. He is scheduled to be sentenced in March in U.S. District Court in Arizona.

Follow Robert Anglen on Twitter: @robertanglen