govinfo:USCOURTS-pawd-2_19-cr-00115-2

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA )
)
v. ) Criminal No. 19-115
) Judge Nora Barry Fischer
MICHAEL PHAN, )
)
Defendant. )

MEMORANDUM OPINION

I. INTRODUCTION
In this case, Israeli citizen Michael Phan is charged with one count of conspiracy to commit
money laundering, in violation of 18 U.S.C. § 1956(h). (Docket No. 6). Presently before the Court
are Phan’s Motion to Dismiss t he Indictment for Lack of Jurisdiction and Failure to State an
Offense and the Government’s opposition thereto. (Docket Nos. 130; 139). Phan argues that this
case should be dismissed because his alleged conduct is beyond the extraterritorial reach of the
money laundering conspiracy statute as it involved money laundering outside of the United States.
(Docket Nos. 131; 143; 157). He believes that the Indictment does not sufficiently allege that he
and his co-conspirators engaged in any domestic conduct to support the substantive offenses of
promotional or concealment money laundering . ( Id.). The Government counters that Phan’s
Motion is a merits -based inquiry as opposed to a jurisdictional one, the money laund ering
conspiracy charge is sufficiently pled as it plainly states that the crime took place in the Western
District of Pennsylvania and elsewhere and that it will present evidence at trial to prove that his
conduct is within the reach of the statutory pros cription for money laundering conspiracies.
(Docket Nos. 139; 150).
The Motion has been exhaustively briefed as the Court has received and reviewed Phan’s
Brief in Support, the Government’s Response, Phan’s Reply, the Government’s Sur -Reply, and

Phan’s Response to the Sur -Reply. (Docket Nos. 130; 131; 139; 143; 150; 157). After careful
consideration of the parties’ positions, and for the following reasons, Phan’s Motion [130] is
DENIED.
II. BACKGROUND
A. Allegations in the Indictment
As the Court recounted in its Memorandum Opinion upholding the detention order, t he
Indictment broadly alleges that from 2013 through April 24, 2019, in the Western District of
Pennsylvania and elsewhere, Phan conspired with Tal Prihar, darknet marketplace administrators,
and ot hers known and unknown to the grand jury to commit the offenses of promotional and
concealment money laundering. (See Docket No. 6). The grand jury avers that Phan and Prihar
operated DeepDotWeb, (“DDW”), a website which provided links to darknet marketplaces where
dangerous narcotics, firearms, stolen identity and account information, fake passports, malware
and other illegal materials were bought and sold by individuals on the dark web and for which the
company received approximately $15 million in kick backs from darknet marketplace
administrators. (Id.). Within DDW, Prihar served as administrator and he registered the domain
name, made infrastructure payments and maintained control over the site while Phan ran the
technical operations, designing and maintaining the day -to-day operation of DDW. ( Id. at ¶ 7).
The grand jury found that although Prihar was residing in Brazil and Phan was living in Israel,
they communicated daily so that they could grow the site and push traffic to it in order to facilitate
the criminal enterprise and generate significant referral fees. (Id. at ¶ 7).
The Indictment specifically names 10 darknet marketplaces where DDW posted referral
links, the types of illegal materials bought and sold in those marketplaces and their respective dates
of operation within the time period of the conspiracy , i.e.: AlphaBay Market ; Agora Market ;

Abraxas Market; Dream Market; Valhalla Market; Hansa Market; TradeRoute Market; Dr. D’s;
Wall Street Market ; and Tochka Market. ( Id. at ¶¶ 9 -20). The grand jury found that DDW
maintained accounts and communicated with the administrators in each of these marketplaces. (Id.
at ¶ 8). As to the users, the Indictment also asserts that Defendants referred hundreds of thousands
of users to darknet marketplaces and that “DDW referral links were widely used by users in the
Western District of Pennsylvania and elsewhere to access and then create ac counts on many
darknet marketplaces.” ( Id. at ¶ 6). The Indictment details that the DDW referr al links were
embedded with information that enabled the marketplaces to pay kickbacks to DDW for each
illegal purchase that was made and that the users that DD W referred to the darknet marketplaces
completed transactions worth hundreds of millions of dollars. (Id. at ¶¶ 5-6, 20). With respect to
transactions in the Western District of Pennsylvania that generated kickback payments to DDW ,
the Indictment specifies that:
• four dozen individuals in this area used DDW referral links to
create accounts on AlphaBay market and purchased thousands
of dollars of illegal narcotics and other contraband that was
shipped here;

• 65 individuals in this area used DDW referral links to create
accounts on Hansa Market and purchased illegal narcotics and
other contraband that was shipped here or to proxy servers;

• FBI employees located in this District created accounts with
Tochka and Wall Street Markets and mad e purchases of illegal
narcotics, ransomware, and compromised credit cards.

(Docket No. 6 at ¶¶ 23-28).
According to the Indictment, t he kickback payments for the referrals were initially made
by the darknet administrators in cryptocurrency to a bitcoin wallet controlled by DDW,
approximately 8,155 bitcoin was transferred to this wallet in a series of more than 40,000 deposits;
the funds were then withdrawn from the DDW wallet in over 2,700 separate transactions; and, the

value of the bitcoin at that time was approximately $15,489,415.00. (Id. at ¶¶ 21-22). After being
withdrawn from the DDW wallet, Defendants allegedly moved the funds in a series of transactions
through various accounts held in their own names and the names of numerous shell companies
they had established at virtual exchanges and traditional banks for the purposes of concealing their
illicit activities and to protect their criminal enterprise and the illegal proceeds it generated . (Id.
at ¶¶ 29-31). The Indictment’s forfeiture allegations seek the contents of virtual currency accounts
at OKCoin, Kraken and Bitpay ; a Paypal.com account; and bank accounts at Baltikums Bank in
Latvia, TBC Bank in Georgia, and First Inter national Bank of Israel in Israel ; and, to impose a
forfeiture money judgment against Defendants in the above amount, i.e., $15,489,415.00 in U.S.
currency. (Id. at ¶ 34).
B. Relevant Procedural History
The Court previously set forth the procedural history of this matter and the related case
against Prihar in its Memorandum Opinion dated March 4, 2026 denying Defendant’s motion to
revoke the detention order. (Docket No. 148; 149). That decision was affirmed by the U.S. Court
of Appeals for the Third Circuit in an Order dated April 17, 2026. (Docket No. 160). As such,
the Court focuses on the procedural history relevant to the instant motion.
Phan submitted his Motion to Dismiss and Memorandum in Support on December 30,
2025. (Docket Nos. 130; 131). Although he did not attach any exhibits to his Motion, he relies,
in part, on the affidavit of Special Agent Eric Yingling referenced in the bond proceedings. (See
Docket No. 131 at 17 (citing Yingling Affidavit, Mag Nos. 19-1109-24 ¶ 28)). The parties jointly
requested an extension of time for the Government to file its Response, which was thereafter
received on February 3, 2026. (Docket No. 139). The Government likewise relies upon an
affidavit in support of a separate warrant seizing the domain name of DDW and proffers additional

information concerning the Defendants’ alleged use of United States -based BTC-e to convert
currency from bitcoin to fiat currency. (Docket No. 139 at 2, n.2, 4, n.4). Phan filed his Reply on
February 18, 2026 attaching emails and other correspondence from prosecutors involved in this
matter. (Docket No. 143). After receiving an extension of time from the Court, th e Government
submitted its Sur-Reply on March 9, 2026. (Docket No. 150). Subsequently, the Court granted
Phan leave to file a further Response exceeding the typical page limitations and he did so on April
6, 2026. (Docket Nos. 151-152; 157). As the briefing has now concluded, and the Court does not
believe that oral argument is necessary given the issues presented, Phan’s Motion is ripe for
disposition.
III. LEGAL STANDARDS
Motions to dismiss are governed by Rule 12 of the Federal Rules of Criminal Procedure .
Fed. R. Crim. P. 12. Specifically, Rule 12(b)( 2)(B) provides that “a motion that the court lacks
jurisdiction may be made at any time while the case is pending.” Fed. R. Civ. P. 12(b)(2). Rule
12(b)(3)(B)(v) states that a pretrial motion may be filed asserting “a defect in the indictment or
information, including, […] failure to state an offense. ” F ed. R. C rim. P. 12(b)(3)(B) (v). The
requirements of the contents of an indictment are set forth in Rule 7 of the Federal Rules of
Criminal Procedure. Fed. R. Crim. P. 7. Pursuant to Rule 7(c)(1), an indictment must “be a plain,
concise, and definite written statement of the essential facts constituting the offense charged” and
“must give the official or customary citation of the statute, rule, regulation , or other provision of
law that the defendant is alleged to have violated.” Fed. R. Crim. P. 7(c)(1). The purpose of the
promulgation of Rule 7 was to abolish detailed pleading requirements and the technicalities
previously required in criminal pleading. See United States v. Resendiz-Ponce, 549 U.S. 102, 110
(2007)); see also U nited States v. Bergrin , 650 F.3d 257, 264 (3d Cir. 2011) . “While detailed

allegations might well have been required under common -law pleading rules, they surely are not
contemplated by Rule 7(c)(1).” Resendiz-Ponce, 549 U.S. at 110.
“‘[A]n indictment is facially sufficient if it (1) contains the elements of the offense intended
to be charged, (2) sufficiently apprises the defendant of what he must be prepared to meet, and (3)
allows the defendant to show with accuracy to what extent h e may plead a former acquittal or
conviction in the event of a subsequent prosecution.’” United States v. Fattah, 858 F.3d 801, 814
(3d Cir. 2017), as amended (June 12, 2017) (quoting United States v. Stevenson , 832 F.3d 412,
423 (3d Cir. 2016)) (further q uotations omitted). However, the Court of Appeals has “eschewed
any approach that insists upon magic words that perfectly mirror the statutory language of the
charged offense: ‘[f]ailure to allege the statutory elements will not be fatal provided that alternative
language is used or that the essential elements are charged in the indictment by necessary
implication.’” Stevenson, 832 F.3d at 424 (quoting Gov’t of V.I. v. Moolenaar, 133 F.3d 246, 249
(3d Cir. 1998)). “Because criminal indictments are to be re ad as a whole and interpreted in a
common sense manner, the mere fact that a term can have different meanings depending on context
[…] does not render it unusable in an indictment.” United States v. Mattia, 157 F.4th 305, 312 (3d
Cir. 2025) (internal quotation and citation omitted).
IV. DISCUSSION
As noted, Phan contends that his alleged conduct in this money laundering conspiracy is
beyond the extraterritorial reach of 18 U.S.C. § 1956(f) and that the Indictment should be dismissed
under either Rule 12(b)(2)(B) for lack of jurisdiction or Rule 12(b)(3)(B)(v) for failure to state an
offense. (Docket Nos. 131, 143; 157). The Government responds that the Indictment should not
be dismissed and that it will present more than sufficient evidence at trial to show th at Phan’s
conduct is within the extraterritorial reach of the money laundering statutes. (Docket Nos. 139;

150). Having considered the parties’ positions, the Court agrees with the Government and will
deny Phan’s Motion to Dismiss . The Court briefly ou tlines its reasons, starting with the
jurisdictional arguments.
A. Motion to Dismiss for Lack of Jurisdiction
In this Court’s estimation, there is subject matter jurisdiction over the grand jury’s charge
that Phan alleged ly committed the offense of money laundering conspiracy in violation of 18
U.S.C. § 1956(h) and the prevailing caselaw makes clear that his extraterritoriality challenge to
the Indictment does not undermine the Court’s ability to hear the case. The Court reaches this
decision for several reasons.
Initially, t he subject matter jurisdiction of district courts over federal criminal cases is
governed by 18 U.S.C. § 3231 which broadly provides that “[t] he district courts of the United
States shall have original jurisdiction, exclusive of the courts of the States, o f all offenses against
the laws of the United States.” 18 U.S.C. § 3231. As the Supreme Court has explained, “[v] ia its
sweeping language, § 3231 opens federal district courts to the full range of federal prosecutions
for violations of federal criminal law.” Turkiye Halk Bankasi A.S. v. United States, 598 U.S. 264,
268-69 (2023); cf. In re Grand Jury Subpoena, 912 F.3d 623, 628 (D.C. Cir. 2019) (“It is hard to
imagine a clearer textual grant of subject -matter jurisdiction. ‘All’ means ‘all’; the provision
contains no carve-out for criminal process served on foreign defendants.”). Further, an indictment
charging a foreign defendant with a violation of federal criminal law is enough to establish subject
matter jurisdiction in this Court. Turkiye Halk Bankasi A.S., 598 U.S. at 268-69 (“By its terms, §
3231 plainly encompasses [the foreign defendant’s] alleged criminal offenses, which were ‘against
the laws of the United States.’”); see also United States v. Fonseca, 49 F.4th 1, 11 (1st Cir. 2022)
(“Fonseca cla ims that the district court lacked subject matter jurisdiction over the conspiracy

charge because he never entered the United States during the conspiracy and did not intend for his
actions to have an impact in the United States. This argument has no merit .”). In light of these
principles, this Court has subject matter jurisdiction over the charge against Phan because he is
charged with violating federal law, i.e., money laundering conspiracy in violation of 18 U.S.C. §
1956(h). Cf. United States v. Ojedokun, 16 F.4th 1091, 1105 (4th Cir. 2021) (quoting RJR Nabisco,
Inc. v. European Cmty., 579 U.S. 325, 136 S. Ct. 2090, 2101 (2016)) (“we conclude that § 1956(f)
sets out a ‘clear, affirmative indication’ that it affords extraterritorial jurisdiction over § 1956(h)
money laundering conspiracy charges”); see also United States v. Iossifov, 45 F.4th 899, 914 (6th
Cir. 2022) (“The text of 18 U.S.C. § 1956 demonstrates Congress’ clear and specific intent to
provide for the extraterritorial app lication of the statute in cases like this one, where there is
significant evidence that a defendant collaborated in a money laundering scheme that took place,
at least in part, in the United States”).
Next, following Supreme Court authority, Courts have recognized that challenges to the
extraterritorial reach of a statute concern the merits of a case and not the Court’s subject matter
jurisdiction. See e.g., Morrison v. Nat’l Austl. Bank Ltd., 561 U.S. 247, 254 (2010); United States
v. Botsvynyuk , 552 F . App’x 178, 182 (3d Cir. 2014) (quoting Morrison, 561 U.S. at 254)
(“Omelyan’s arguments pertaining to the fact that the acts of extortion that occurred within five
years of the indictment occurred outside the United States does not go the question of whether the
District Court had subject matter jurisdiction, but instead ‘is a merits question.’”); United States v.
Rafoi, 60 F.4th 982, 992–93 (5th Cir. 2023) (“whether a statute reaches extraterritorial acts is not
a challenge to the district court’s subject-matter jurisdiction.”). The Supreme Court has also held
that “defects in an indictment do not deprive a court of its power to adjudicate a case.” United
States v. Cotton, 535 U.S. 625, 630 (2002) . The U.S. Court of Appeals for the Third Circuit has

therefore reasoned that the dismissal of an indictment is subject to harmless error review such that
proper instructions of the essential elements of a crime to a petit jury at trial suffice to cure any
defect by the grand jury allegedly not finding the le sser standard of probable cause. See United
States v. Sayon , No. CR 20 -325, 2023 WL 3645684, at *5 (W.D. Pa. May 25, 2023) (citing
Stevenson, 832 F.3d at 428) ; see also United States v. Gillette , 738 F.3d 63, 75 (3d Cir. 2013)
(“Neither insufficiency of t he evidence nor failure to state an offense means that the charged
conduct was outside the authority of the District Court to adjudicate.”).
All told, s ince the Court has subject matter jurisdiction over this case and Phan’s
extraterritorial arguments necessarily concern the merits of the charge and are non-jurisdictional,
his Motion seeking to dismiss the charge for lack of jurisdiction under Rule 12(b)(2)(B) is denied.
See R afoi, 60 F.4th at 992-93; see also B otsvynyuk, 552 F. App’x at 182. The Court further
evaluates his extraterritoriality position in the context of his motion to dismiss for failure to state
an offense below.
B. Motion to Dismiss for Failure to State an Offense
It is also this Court’s opinion that Phan’s Motion must be denied to the extent that he claims
that the money laundering conspiracy charge should be dismissed because the Indictment does not
allege a viable domestic object offense . (See Docket Nos. 131; 1 43; 157). Although Phan’s
arguments are multi-faceted, his Motion must be denied for two independent reasons, i.e., he does
not adhere to the standards governing Rule 12(b)(3)(B)(v) motions as he relies upon matters
outside the Indictment and assumes facts not in the Indictment in support of his position, and the
Indictment is otherwise more than sufficient to meet the pleading requirements to state that he
committed the offense of money laundering conspiracy in the Western District of Pennsylvania at
this stage of the proceedings.

As to the former point, it is well established that “a pretrial motion to dismiss an indictment
is not a permissible vehicle for addressing the sufficiency of the government’s evidence,” and there
is no corollary to the civil s ummary judgment practice in federal criminal law. United States v.
DeLaurentis, 230 F.3d 659, 660 (3d Cir. 2000). Again, the Court is limited to reviewing the four
corners of the Indictment on a motion to dismiss for failure to state an offense while the sufficiency
of the evidence is tested at the conclusion of Government’s case at trial on a motion for judgment
of acquittal. See Id. (“[t]he government is entitled to marshal and present its evidence at trial, and
have its sufficiency tested by a motion for acquittal pursuant to Federal Rule of Criminal Procedure
29.”).
Here, Phan assumes numerous facts and relies upon affidavits and evidence which are not
contained in the Indictment in his effort to seek its dismissal. (See e.g., Docket No. 131 at 3, n.1
(no evidence supporting allegations that Phan handled day-to-day operations at detention hearing
and Rule 16 discovery); 131 at 7 (DDW wallet identified in the Indictment is a “foreign
cryptocurrency wallet”); 131 at 23 (citing af fidavit of Special Agent Yingling and claiming that
DDW users’ purchases were made in cryptocurrency using hot wallets and escrow services that he
believes took place abroad); 143 at 15 (DDW “was a legitimate business that published news and
generated ad revenue”); 143 at 2, 20-21 (asserting that bitcoin is intangible property that does not
exist in accounts or wallets and is only situated in the domicile of the owner); 143-1:143-3
(attached email and correspondence from prosecutors). The Government follows suit in its briefs
in opposition, referencing, among other things, affidavits, plea agreements in other cases,
admissions by the defense in the bond proceedings and extensive proffers of evidence supporting
its case against Phan , including activities und ertaken by conspirators within the United States .
(See Docket No. 139 at 2, n.2 (noting activities of conspirators to U.S. companies including that

DDW website was hosted by GoDaddy ; paid for using a PayPal account ; and the traffic to the
domain was managed through Cloudfare); id. at 5 (Phan traveled to and spent time in the United
States during the time of the conspiracy); id. at 4, 13, 16 (DDW used virtual currency exchange
BTC-e which maintained servers in the U.S. in order to convert bitcoin to fiat currency); id. at 10,
n.5 (noting that DDW website was in English and targeted American visitors to the site); and
Docket No. 150 at 2, 8, 11-12 (noting DDW use of BTC-e in virtual currency transactions)). Since
the Court is unable to resolve these evidentiary disputes between the parties on a motion to dismiss
for failure to state an offense, Phan’s Motion must be denied to the extent that he relies on evidence
and proffers outside of the Indictment. See D eLaurentis, 230 F.3d at 660. Hence, the Court
focuses on Phan’s contentions as to the facial sufficiency of the Indictment.
Without including such extraneous matters purporting to demonstrate that all of the money
laundering activities took place abroad , Phan makes t hree essential claims: first, that the Court
should reject the allegations that the conspiracy took place in the Western District of Pennsylvania
as “boilerplate”; second, that the conspiracy charge should be dismissed because the Government
has purportedly failed to sufficiently allege that he engaged in a viable domestic money laundering
offense; and third, since the Indictment states that he is a non-citizen residing in Israel at the time
of the conspiracy and identifies banks outside of the United States to which the ill-gotten gains of
the conspiracy were ultimately deposited, the allegations are insufficient to meet the requirements
of § 1956(f). (See generally Docket Nos. 131; 143; 157). However, these contentions lack merit
for several reasons.
First, the Court cannot ignore the Indictment’s numerous allegations that the conspiracy
and overt acts in furtherance of same took place in the Western District of Pennsylvania and must
accept those allegations as true for purposes of the motion to dismiss under Rule 12(b)(3)(B)(v) .

See Docket No. 6 at ¶ 2 (“Beginning in and around October 2013, and continuing through the date
of this Indictment, in the W estern District of Pennsylvania and elsewhere, the defendants TAJ
PRIHAR and MICHAEL PHAN, did knowingly, intentionally, and unlawfully conspire together
with each other, with darknet marketplace administrators, and with other persons know n and
unknown to the grand jury to commit certain offenses against the United States […]”); see also id.
at ¶¶ 6, 20, 23-28. As the U.S. Court of Appeals for the Third Circuit found in United States v.
Menendez, 831 F.3d 155, 175-76 (3d Cir. 2016), the Court must accept the allegations concerning
the location of the crime as true, regardless of any uncertainty as to how the Government would
prove them at trial. Id. (citing Bergrin, 650 F.3d at 270 n.8). Stated differently, in this Circuit, an
Indictment is sufficient if it alleges the timeframe and geographical area of the conspiracy and
informs the defendant of the crime alleged such that it is sufficient to permit him to plead double
jeopardy in a subsequent prosecution. See e.g., United States v. Johnstone, 856 F.2d 539, 541-42
(3d Cir. 1988) (“the indictment specified both the time frame and the geographical area of the
conspiracy”); United States v. Bujese , 371 F.2d 120, 124 (3d Cir. 1967) (citation omitted) (“An
indictment alleging commission of an offense within the jurisdiction of the trial court, meets the
required certainty of place of commission.”). Those requirements are more than satisfied here as
the Indictment plainly states that the unlawful money laundering conspiracy took place in the
Western District of Pennsylvania and elsewhere and the Indictment will not be dismissed on this
basis. See Docket No. 6 at ¶¶ 2, 6, 20, 23-28.
Second, the Court cannot dismiss the Indictment because it allegedly fails to state that Phan
and others committed a viable domestic money laundering offense. To reiterate, Phan is charged
with a single count of money laundering conspiracy in violation of 18 U.S.C. § 1956(h) but he is
not charged with a substantive money laundering offense. (Docket No. 6). The essential elements

of money laundering conspiracy include that: two or more people entered into a conspiracy to
launder money; the defendant knew the purpose of the conspiracy; and the defendant deliberately
joined the conspiracy. (Docket No. 7 at 2 (citing United States v. Navarro, 145 F.3d 580, 593 (3d
Cir. 1993); 18 U.S.C. § 1956(h); Whitfield v. United States , 543 U.S. 209 (2005)). As the
Government points out, the Supreme Court has held that “[b]ecause the text of § 1956(h) does not
expressly make the commission of an overt act an element of the conspiracy offense, the
Government need not prove an overt act to obtain a conviction.” Whitfield, 543 U.S. at 214. The
Supreme Court furthe r recognized that § 1956(i) is not an exclusive venue provision and that a
money laundering conspiracy case may be tried in: the district where the unlawful conspiratorial
agreement was reached; “the district in which venue would lie if the completed substantive money
laundering offense had been accomplished”; or, “any district in which an overt act in furtherance
of the conspiracy was committed,” even though “an overt act is not a required element of the
conspiracy offense. ” Id. at 218 (emphases omitted) ; see Ojedokun , 16 F.4th at 1107 (citing
Whitfield, 543 U.S. at 217 -218) (“venue in a § 1956(h) case may be had in any district where an
act in furtherance of the conspiracy took place” and noting that overt acts taking place in the United
States were sufficient to show that the statute applied to defendant’s conduct in Nigeria); see also
Iossifov, 45 F.4th at 911-12 (upholding venue in case involving foreign defendant where evidence
showed that acts in furtherance of the money laundering conspiracy took pla ce in the Eastern
District of Kentucky).
In addition, it is well settled in the Third Circuit that “[c] onspiracy indictments need not
allege all of the elements of the offense which the defendants are accused of conspiring to commit.”
United States v. Wander, 601 F.2d 1251, 1259 (3d Cir. 1979); see also United States v. Manfredi,
628 F.Supp.2d 608, 624-25 (W.D. Pa. Jan. 21, 2009). The Court of Appeals has further instructed:

[t]o be legally sufficient, a conspiracy count in an indictment need
only set forth “the agreement and specific intent to commit an
unlawful act, and when required by statute, an overt act.” A
conspiracy indictment need not allege every element of the
underlying offense, but need only put defendants on notice that they
are being charged with a conspiracy to commit the underlying
substantive offense.

United States v. Werme , 939 F.2d 108, 112 (3d Cir. 1991) (quoting Wander, 601 F.2d at 1259).
This is because, “[i]n a conspiracy count, the conspiracy is the gist of the offense ... [and the
indictment] need not plead the substantive offense letter -perfect because the purpose of the
conspiracy may have been accomplished even though such activity fell short of comp leting a
substantive offense.” Id. (quoting United States v. Knox Coal Co. , 347 F.2d 33, 38 (1965)). In
other words, a defendant cannot obtain dismissal of a conspiracy indictment by pointing to its
allegations of overt acts and claiming that such allegat ions do not sufficiently state all of the
elements of a completed substantive offense. See Wander, 601 F.2d at 1259-60 (“Count I of the
indictment specifically avers an agreement between the defendant and a specific intent to commit
an unlawful act. It f urther avers a number of overt acts in furtherance of the objectives of the
conspiracy. It need not allege the essential elements of the underlying offense which is the object
of the conspiracy, a requirement of an indictment charging a substantive offense .”). Therefore,
Phan’s position that the Indictment should be dismissed because it purportedly does not allege that
he committed a domestic money laundering offense is overruled.
In any event, h aving reviewed the allegations in the Indictment under the legal standards
noted above, the Court holds that the Indictment provides adequate detail to support all of the
essential elements of the money laundering conspiracy charge, sufficiently apprises defendant of
what he must be prepared to meet to defend the charge at trial and, allows him to raise the defense
of double jeopardy in a subsequent prosecution. See Fattah, 858 F.3d at 814. Again, the

Indictment alleges that from 2013 through April 24, 2019, in the Western District of Pennsylvania
and elsewhere, Phan; Prihar; darknet marketplace administrators ; and other persons known and
unknown to the grand jury knowingly conspired to commit the offenses of promotional and
concealment money laundering. (Docket No. 6 at ¶ 2). The Indictment details that DDW referral
links were used in the Western District of Pennsylvania and elsewhere to access and create
accounts on the darknet marketplaces ; such users made hundreds of millions of dollars of
purchases of contraband from darknet vendors; the referral links enabled the darknet marketplace
administrators to pay Phan and Prihar kickbacks or referral fees for each transaction by these users
and the darknet administrators did, in fact, pay Phan and Prihar millions in kickbacks or referral
fees. (Id. at ¶¶ 6, 20, 23-28). The Indictment also states that Phan and Prihar promoted and grew
the DDW site to drive additional traffic to it and increase their revenue ; received the kickback
payments in a bitcoin wallet they controlled ; and moved their ill -gotten gains in thou sands of
transactions through virtual currency exchanges and bank accounts held in their own names and/or
the names of various shell companies that they owned in an effort to conceal the true nature of the
funds as proceeds of the illicit activities. (Id. at ¶¶ 7-20, 29-31).
While the Indictment does not specifically detail the location s of each of the co-
conspirators or the thousands of transactions that took place, a common sense and holistic review
of the allegations make clear that the conspiracy involved a scheme for DDW to generate revenue
from sales of contraband on darknet marketplaces by users in the Western District and elsewhere;
(necessarily including other users in the U.S.); the payment of kickbacks to Defendants for
referring these users to the darknet marketplaces ; and the Defendants then laundering the funds
out of the U.S. to accounts they controlled including the accounts at Baltikums Bank in Latvia,
First International Bank of Israel in Israel and TBC Bank in Georgia. Cf. Mattia, 157 F.4th at 312

(“The Superseding Indictment described the essential facts of Mattia ’s alleged scheme, and
therefore complies with Rule 7(c), even though it did not detail the specific timing and
circumstances of Dr. Agresti ’s participation in it. ”). In addition to funds held in those bank
accounts abroad, the Indictment also asserts that a PayPal.com account and virtual currency
accounts at OKCoin, Kraken and BitPay were involved in the offense and the Government seeks
forfeiture of same. (Docket No. 6 at ¶ 34). The Indictment does not specify the location of th e
PayPal.com account, the virtual currency accounts or others that may have been used in the
scheme, but the Court’s common sense reading of the totality of the accusations in the Indictment
simply does not foreclose a finding that financial institutions and/or virtual currency exchanges
based in the United States were used in furtherance of the conspiracy. (See id. at ¶¶ 1-36). To the
contrary, the Indictment necessarily implies that the U.S. financial system was used as it explains
that illegal proceeds originated from transactions in the Western District of Pennsylvania and
elsewhere which were then moved by Defendants in a series of transactions to various accounts,
including those that are now subject to forfeiture. See Stevenson, 832 F.3d at 424.
Taken together, the allegations in the Indictment are enough to put Phan on notice of the
charge, permit him to start to build his defense and provide more than sufficient factual orientation
for him to plead double jeopardy in the event of a subsequent prosecution. See Fattah, 858 F.3d
at 814.
Third, and finally, the Court also denies Phan’s Motion insofar as he maintains that the
Indictment fails to state an offense under Rule 12(b)(3)(B)(v) because the allegations therein are
beyond the extraterritorial reach of the money laundering conspiracy statute. (See Docket Nos.
131; 143; 157). The parties agree that the limitations set forth in § 1956(f) apply to money

laundering conspiracy charges. (See Docket Nos. 131 at 7-8; 139 at 6-7). Section 1956(f) provides
that:
(f) There is extraterritorial jurisdiction over the conduct prohibited
by this section if--

(1) the conduct is by a United States citizen or, in the case of
a non-United States citizen, the conduct occurs in part in the
United States; and

(2) the transaction or series of related transactions involves
funds or monetary instruments of a value exceeding $10,000.

18 U.S.C. § 1956(f). As the Court has already found above, and after once again taking the
averments of the Indictment as true, Phan is a citizen of Israel but according to the grand jury, he
knowingly joined a money laundering conspiracy which took place, in part, in the Western District
of Pennsylvania and involved the laundering of millions of dollars in kickbacks that Defendants
received from darknet marketplace administrators for the DDW referrals. (See Docket No. 6 at ¶¶
1-32). Thus, the statutory requirements of § 1956(f) that the offense take place, in part, in the
United States and involve more than $10,000 in laundering transactions are sufficiently pled in the
instant Indictment . See e.g.,18 U.S.C. § 1956(f) ; Ojedokun, 16 F.4 th at 1107 . Given such
allegations, there is no basis for dismissal for failure to state an offense. See Fattah, 858 F.3d at
814.
V. CONCLUSION
Based on the foregoing, Phan’s Motion [130] is DENIED as he has failed to demonstrate
that the Indictment should be dismissed for lack of jurisdiction or failure to state an offense . An
appropriate Order follows.
s/Nora Barry Fischer
Nora Barry Fischer
Senior U.S. District Judge

Dated: May 20, 2026

cm/ecf: All counsel of record

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