Bitcoin, guns, ammo, drugs, a long rap sheet…and anarchy. Not a good mix, as one recent criminal case out of Arizona has proven.
A multi-agency federal task force raided local bitcoin trader, and anarchist blogger, Morpheus Titania’s apartment last week.
Court documents, available online in electronic court filings and first reported by CoinDesk, demonstrate that US Magistrate Michelle Burns ordered Costanzo to remain in custody until his trial after a hearing. Costanzo is considered a “serious flight risk” thanks to a long history of criminal conduct and “a record of prior failure to appear in court as ordered.”
Morpheus, whose legal name is Thomas Mario Costanzo, was being held until his case was to be heard, but will remain in custody for longer.
According to court records, he’s been charged with possession of three boxes of Winchester ammunition for an altogether 60 cartridges “in different calibers.” He denied ownership of the ammunition, but admitted they were in indeed his apartment, according to records, which did not say who owned them.
Thanks to a 2015 conviction in Maricopa County for a felony marijuana possession charge, Costanzo is not legally permitted to possess firearms or ammunition, and was therefore in violation of Arizona state law. Homeland Security Investigations steered a raid on April 20 of Costanzo’s Mesa apartment. However, it it did not have to do with his marijuana offenses nor illegal possession of guns and ammunition.
The warrant issued by U.S. Magistrate Judge David Duncan sought evidence, instead, that Costanzo may have operated as an “unlicensed money transmitting business,” – a license which requires one to go through an application process with government. Prosecutors also contend that Costanzo sold drugs and hid the profits from his operations.
Agents could seize illegal drugs, Bitcoin records and financial documents, computers, cellphones and other items. Costanzo’s cell phone company received a search warrant to produce tracking information on his prior whereabouts.
Freedom’s Phoenix, a conspiracy website run by Libertarian activist Ernest Hancock, published warrant records on Tuesday obtained by his radio show Freedom’s Phoenix, for whom Costanzo works as sales and marketing manager. Hancock said on air the two have been friends since 2003.
Photos from the raid in Mesa feature SWAT team members and other officers, as well as an armored vehicle, surrounding the Costanzo’s building. The apartment landlord said Costanzo has lived there alone for approximately one year. Costanzo often refers to himself online as one of the most prolific bitcoin traders in the area. Localbitcoins record show he has made more than 100 trades in four years, and has about a dozen reviews on the website.
On the bitcoin trading website, Costanzo’s profile reads, “Hey I’m Morpheus let’s get together and do Bitcoin :)”.
His feedback score is 100%, and the first activity on the account was nearly four years ago. He is trusted by 30+ people on the website. He has apparently been active in both Florida and Arizona.
“Awesome to work with!” one of his customers wrote in a review.
Another wrote: “MorpheusTitania is a great trader! He went above and beyond on my last trade. There was a mix-up and he waited for over an hour before we could meet. You can trade with confidence with MorpheusTitania.” Costanzo thought highly of himself, as well.
“Because of his rock-solid reputation, he is one of the biggest sellers in the Phoenix area,” Costanzo wrote about himself in 2014 on one of his web sites, Titanians.org. “Morpheus is now semi-retired as a bitcoin trader / entrepreneur.”
Costanzo has been arrested numerous time and served eight months in prison in the mid-1980s after fleeing from police.
He received probation after a 2015 guilty plea for misdemeanor convictions in two marijuana cases, as well as a felony in the third, according to court records.
If Arizona had similar laws to the eight states and Washington D.C. where marijuana is legalized for adults 21 and older, Costanzo would never have been charged and convicted of possession three times, nor been stripped of his gun rights. According to local Homeland Security spokeswoman Yasmeen Pitts O’Keefe tells New Times, the investigation is “open and active”.
This is the second time in the past month Arizona has made Bitcoin and blockchain headlines. The Senate of the state of Arizona recently passed the bill, HB 2417, which was introduced by state representative Jeff Weninger on 6 February, 2017. The bill passed with a vote of 28-1 where it was then passed along to Arizona’s governor Doug Ducey.
“Smart contracts may exist in commerce,” reads the bill. “A contract relating to a transaction may not be denied legal effect, validity or enforceability solely because that contract contains a smart contract term.”
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