Criminal Cases

IRS, Other Agencies Put 65-Year-Old Woman In Prison For Distributing "Bath Salts"

IRS, Other Agencies Put 65-Year-Old Woman In Prison For Distributing "Bath Salts"

An investigation by the IRS Criminal Investigation Division (IRS-CI) and other government agencies, including Homeland Security Investigations, has put a 65-year-old woman in federal prison for drug crimes. 

Laura Denise Russell, a resident of Mountain Home, Idaho, was sentenced to 40 months behind bars for conspiring to commit money laundering as a result of her role in a "bath salts" distribution ring. According to an official release from the IRS, Russell engaged in the money laundering scam from October 2019 through March 2021.

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Credit: Seksan Mongkhonkhamsao/Getty Images

Russell worked with two incarcerated coconspirators -- her son Michael Osborn, of Boise, and Troy Thomas Wheeler of Meridian. While in the custody of the Idaho Department of Corrections, Osborn and Wheeler used contraband cellphones to oversee the distribution of controlled substances, including alpha-pyrrolidinohexanophenone, known on the streets as "bath salts". 

The IRS reports that Russell retrieved drugs that were sent through the mail and physically distributed them to buyers. She also collected drug proceeds, some of which she deposited into her credit union account and some of which she converted into cryptocurrency. Russell, Osborn, and Wheeler were cognizant of the illegal nature of their actions and took strides to hide the source of their funds. Court documents indicate that law enforcement seized a digital wallet containing 7.83777 Bitcoin, valued at approximately $280,000.

Russell originally pleaded guilty to the charges against her on April 4, 2023. 

Per the IRS, her coconspirators' sentences are as follows:

  • Angela Marie Klinkhamer pleaded guilty to conspiring to distribute controlled substances and conspiring to commit money laundering on November 28, 2022. She was sentenced to 70 months in prison on March 16, 2023.
  • Michael Robert Osborn pleaded guilty to conspiring to distribute controlled substances and conspiring to commit money laundering on April 26, 2023, and he is scheduled for sentencing on September 12, 2023.
  • Troy Thomas Wheeler of Meridian, pleaded guilty to conspiring to distribute controlled substances, and he is scheduled for sentencing on September 11, 2023.
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Credit: Charles O'Rear/Getty Images

Andy Tsui, Special Agent in Charge of IRS Criminal Investigation Denver Field Office said, "IRS Special Agents are experts in unraveling complex financial transactions and money laundering schemes involving cryptocurrencies. Today's sentencing should serve as a reminder that CI and our law enforcement partners are relentless in our mission to dismantle drug trafficking organizations and bring these criminals to justice."

The IRS is cracking down on money laundering scams, specifically those that involve online cryptocurrency exchanges. In Arizona, for example, the Darknet Marketplace and Digital Currency Crimes Task Force (DNMDCC Task Force) was recently made official by U.S. Attorney Gary M. Restaino, IRS-CI SAC Albert Childress, HSI SAC Scott Brown, DEA SAC Cheri Oz, and United States Postal Inspection Service Acting Inspector in Charge Greg Torbenson.

Since 2017, the agencies involved in the task force have been focused on catching darknet drug traffickers and illegal cryptocurrency exchanges. The dark web serves as the perfect platform for criminals to launder illicit funds.

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Credit: Justin Paget/Getty Images

In one recent case, for instance, an Ohio man was sentenced to 51 months in federal prison for a Bitcoin theft scheme involving an online money laundering operation. In this situation, the defendant utilized a “mixer” or “tumbler" -- a service that mixes illegal cryptocurrency funds with "good" currency, with the intention of masking the original source.

Although the Ohio case was not officially overseen by the task force, it is an example of the types of crimes they will be investigating.

At this time, it is not known if this task force will eventually extend into other states. 

What do you think about Russell's case?

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Feature Image Photographer: Mikhail Pivikov/EyeEm/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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