While other kids played together outside, it wasn’t unusual to find 11-year-old Vincent Ramos inside, mesmerized by infomercials.

The televised sales pitches reinforced one of the most basic tenets of entrepreneurism: identify a need in the market and go fill it.

Whether by happenstance or design, Ramos eventually did just that, making millions of dollars selling encrypted Blackberry smartphones to criminals around the world so they could conduct their illicit business in secret.

The Sinaloa cartel was reportedly a client, as were Hells Angels in Australia and a global drug-trafficking organization run by Owen Hanson, a former University of Southern California football player.


“Some of the most sophisticated criminals in the world using some of the most sophisticated technology in the world,” is how Assistant U.S. Attorney Andrew Young described Ramos’ clientele.

“The scope of this case is staggering,” Young said.

On Tuesday, U.S. District Judge William Hayes sentenced Ramos to nine years in prison.

The conviction marks the first of its kind in the U.S. dealing with encrypted technology offered to criminal networks, although federal prosecutors in San Diego note it “likely will not be the last.”


Other encryption service providers were no doubt following the proceedings closely, Young argued, and would be looking at the severity of the sentence to make their own risk assessment. When Ramos’ company, Phantom Secure, was dismantled by the investigation, its competitors in the “dark communication” world immediately absorbed its clientele, Young added in a sentencing memorandum.

Ramos, a 41-year-old Canadian citizen who lives in the Vancouver area, said he never intended to cater to drug lords. His dream was to provide encryption services for business executives, he wrote in a letter to the judge.

After high school, inspired by the infomercials, he studied with Amway in the Philippines to learn the art of multi-level marketing, then returned to Canada and worked for a cellphone business.

He formed Phantom Secure in 2008 and soon learned the phones were being used to facilitate drug transactions, he said.


“I would be lying if I said that I wasn’t aware of what was going on,” Ramos wrote in the letter. “The reality was that I turned a blind eye and didn’t want to face reality. I was making money and providing for my wife and children.”

He added: “I should have stopped making excuses and justifications like ‘everybody has a fundamental right to privacy.’”

But prosecutors presented evidence that indicated Ramos did more than just turn a blind eye. Rather, the devices he designed and sold were “specifically intended” to thwart monitoring by law enforcement.

The Blackberry phones he sold were gutted, with typical operations such as the camera, microphone, Internet browsing and voice calls disabled. The devices had a single purpose: to send and receive PGP-encrypted text communications on a closed, super-secure network, routed through servers based in Panama and Hong Kong for extra measure.


If a device fell into the wrong hands, such as after an arrest, Phantom Secure would remotely wipe the device clean.

While the services — costing about $2,000 for a six-month subscription — were openly advertised to business executives, in reality potential clients often needed an existing client to vouch for them, prosecutors said.

Once the client was approved, prosecutors said, real names and identifying information were no longer required and anonymous, self-selected handles were used: leadslinger, The.cartel, The.killa, Elchapo66 and Knee_capper9, to name a few.

Ramos estimates the company sold about 7,000 of the devices.


Authorities around the world had long heard of the encrypted devices but had difficulty cracking open the case. In Australia, the devices were used by Hells Angels to coordinate several high profile murders, authorities there said.

Hanson, who leveraged his not-so-notable football career at USC into a sports gambling and drug trafficking empire, used six devices on the Phantom Secure network to coordinate a shipment of more than a ton of cocaine from Mexico to Southern California, then to Canada and Australia, prosecutors said.

The beginning of the end of Phantom Secure came when Hanson, unaware he was under investigation by the San Diego FBI, vouched for an associate to get a device of his own, according to court records. The associate turned out to be an undercover agent.

Defense attorneys Victor Sherman and Michael Pancer said Ramos rationalized that what he was doing was not illegal because his business operated like a multi-level marketing model; there were at least two layers of contractors between him and the end users.


But prosecutors presented evidence that indicated Ramos was also directly involved in sales. In an encrypted message after a business trip to present to potential clients in Mexico City, Ramos allegedly wrote to an employee: “we are (expletive) rich man ... get the (expletive) Range Rover brand new. Cuz I just closed a lot of business. This week man, Sinaloa Cartel that’s what up...”

Ramos was arrested on a San Diego warrant in March 2018 in Bellingham, Wash.

The takedown involved some 250 agents around the world, searches of 25 homes and offices linked to Phantom Secure associates, and the seizure of servers, phones, computers, drugs and weapons. In Australia, authorities executed 19 search warrants and seized more than 1,000 encrypted phones.

Ramos later pleaded guilty to one count of a racketeering conspiracy. He forfeited about $8 million in assets, including homes, 23 bank accounts, holdings in Dubai, gold and cryptocurrency, his lawyers said.


Ramos will be allowed to petition the Canadian government to return home after serving five years of his sentence in the U.S., according to an agreement with prosecutors. The petitioning process typically takes one to two years, his defense attorneys said, although it is unclear if Canada would approve the prisoner transfer.

Four co-defendants remain international fugitives.

