Stating 'We love anonymity' on the Dark Scandals' homepage, Michael Mohammad used crypto to build the site into one of the largest known marketplaces for illegal sexual imagery.
In the eight years he ran an online market selling images of violent child sexual abuse, Michael Mohammad made the equivalent of more than 100,000 euros. At his trial in May, while some of his victims listened, he told the judge: “It was purely business.”
As a 26-year-old student, Mohammad turned to bitcoin in 2013 after PayPal blocked his newly launched website from its payment network. According to the judge, the payment provider objected to the website’s pornographic content. PayPal did not respond to requests for comment. However, users could still transfer funds to the site without detection if exchanges did not require them to provide any personal details. Many of the accounts Mohammad’s customers opened at eight different exchanges held either no personal details or fake ones, an assistant US attorney testified in a court submission.
Naming him as “Michael M.,” the court sentenced Mohammad in June to 10 years in jail for producing and distributing child abuse images, and for sexually assaulting and raping underage girls. The US Justice Department identified Mohammad fully in 2020 when it unsealed an indictment against him. In an email to Reuters, his lawyer said Mohammad was wrongly convicted and would appeal, declining further comment.
The sums involved in buying and selling images of sexual abuse remain small compared to other criminal activities, such as the drugs trade. But the figures are increasing. While in the past offenders typically traded child abuse imagery among themselves in small communities, the darknet has become a breeding ground for sites like Dark Scandals that charge in crypto. And the damage is far-reaching.
The IWF says the annual number of webpages it has confirmed contain such images rose over four-fold from 2016 to over 250,000 last year. During that same period, the IWF found the number of commercial sites selling abuse imagery for virtual currency exploded to 1,014 from just 41. These sites often included links for users to pay via crypto exchanges, the IWF told Reuters, declining to name companies.
Binance’s global head of intelligence and investigations, Tigran Gambaryan, is a former US Internal Revenue Service agent who was involved in the Dark Scandals case. He said Binance and other exchanges provided records to the investigation team. “If not for crypto and the cooperation Binance provided, the individual behind the website would not have been identified,” Gambaryan said. LocalBitcoins and ShapeShift did not respond to requests to comment.
Back in the Netherlands, he said he accumulated debts while studying to become a social worker, though the judge noted he rarely attended class. In mid-2012, he saw a “gap in the market” and set up Dark Scandals. He hoped it would improve his “bad financial situation,” he testified. On the site’s forum, users praised his collection, referring to the girls and women it featured as “sluts” and “whores.” “Great stuff!” wrote one user in a 2012 thread about videos showing women being tortured.
Binance’s CEO Changpeng Zhao told staff in a 2020 video call that “people should have privacy part of financial freedom.” The same year, Coinbase’s CEO Brian Armstrong said he expected so-called “privacy coins,” which are designed to be untraceable, to gain mainstream adoption as “it doesn’t make sense in most cases to broadcast every payment you make.” Erik Voorhees, founder of the ShapeShift exchange, wrote in a blog post last year, “Surveillance of all people cannot be our standard.
Lijnse, the Dutch prosecutor, told the court that Mohammad’s shift to crypto marked the “professionalization of his crimes” as he sought to build his client base off the radar. By mid-2014, the site was already drawing over 13,000 unique visitors a week, she said. As well as the downloads, officers discovered a video of Lutkin’s foster daughter covertly taken by a camera placed in a smoke detector in her bedroom, according to sentencing records. The footage showed the 14-year-old undressing and changing out of her school uniform.
The investigators tracked payments made to Dark Scandals to more than 300 accounts at eight unnamed exchanges, the US prosecutor, Faruqui, said in a later request to recover funds these accounts held. Many customers used the accounts, opened with either no documents or “patently false” details between 2013 and 2020, solely to pay Mohammad, he wrote.
On a hard drive, Mohammad stored 50 videos that recorded his chat and video calls with several dozen Dutch girls on Snapchat, WhatsApp and Instagram, his judgement said. Police found photos and videos of the same victims either posing naked or performing sex acts on themselves. Other videos, taken by a spy camera, showed him committing rape at his home.
Once they sent the picture, Mohammad, often using the online alias SavageBoys, began making escalating requests, including that they penetrate themselves with objects in front of a webcam, Lijnse said. If the girls refused, he threatened to share images with their schools and families, or even kill them.
She had known for months that something was wrong with her child. “I couldn’t put my finger on it,” she told Reuters, identified here only by her second initial, “S,” to protect her family’s privacy. Mohammad told the court he set up Dark Scandals because he didn’t believe selling videos of sexual abuse was illegal. He considered it a “grey area” and an “opportunity to make money.” He denied the rape allegations, claiming video and audio evidence did not identify him.
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