Phantom Secure CEO Busted for Selling Super-Secure Phones to Drug Cartels

If you’ve purchased a smartphone in the last several years, it’s most likely encrypted by default to protect your data. Canada-based Phantom Secure went a step further with its customized, ultra-secure Blackberry and Samsung smartphones. Now, the company’s CEO Vincent Ramos is behind bars, accused of facilitating criminal activity by tailoring those devices to suit the likes of drug cartels and gangs.

According to the FBI complaint, Phantom Secure wasn’t just making secure smartphones. The company’s management allegedly knew its phones were purchased primarily by criminals, and it actually designed features with that in mind. The FBI cites the notoriously violent Sinaloa drug cartel as one of Phantom’s best customers. Ramos is charged with racketeering, conspiracy to distribute narcotics, and aiding and abetting.

Phantom Secure goes to extremes to cater to the most paranoid smartphone users, with most of its sales coming from Mexico, Australia, Cuba, and Venezuela. It doesn’t build smartphones from the ground up, but rather modifies existing hardware to suit its needs. There’s a BlackBerry version of the Phantom Secure platform based on the Bold 9720, and an Android version based on the Samsung Galaxy S7 Edge. The latter comes with a keyboard attachment, but the BlackBerry has a built-in keyboard.

Phones purchased from Phantom Secure have no GPS, no camera, and no microphone — the company physically removes the hardware components. The software is also heavily modified to block access to the open internet and regular messaging services. The only communication platform on Phantom Secure devices is a highly secure PGP-based system going through international servers. The company does not list prices online, so they’re likely rather astronomical.

Key to the FBI’s case is the allegation that Phantom Secure is not simply making devices that criminals happen to buy. There are plenty of iPhones and Android devices in the pockets of criminals, after all. Multiple undercover agents claim to have recorded Vincent Ramos proudly proclaiming that his company’s phones were designed specifically to cater to drug smugglers. The government also points to at least one cooperating witness who used Phantom Secure devices as part of the Sinaloa cartel. Agents even purchased devices from Phantom while pretending to be drug traffickers, and asked questions about coordinating drug buys via the phones. Phantom Secure didn’t bat an eye.

Not everyone will be happy to see the FBI take down Phantom Secure. The FBI has shown its distaste for the increasing use of encrypted communication, and this could be seen as a slippery slope.