More than three years after federal authorities in San Diego revealed that they created an encrypted phone company that allowed them to remotely spy on international criminals using the devices, a San Diego federal judge on Friday handed down the first sentence in a local case at the center of the sprawling global investigation.
“This case has such broad implications,” U.S. District Judge Janis Sammartino said Friday at the sentencing for one of the 17 defendants indicted in San Diego for allegedly administering and distributing the phone service across the international criminal underworld. “I’ve never had a case like this before.”
Sammartino sentenced Osemah Elhassen, a 51-year-old Lebanese-Australian dual citizen, to five years and three months in prison, saying the crimes he committed were “incredibly serious,” but noting that Elhassen was not a leader or organizer of the racketeering conspiracy to which he pleaded guilty.
That conspiracy centered around the company ANOM, sometimes stylized ANØM, which catered to criminals with hardened encrypted devices — essentially cellphones stripped of their usual capabilities and connectivity, and instead equipped with an encrypted messaging system allowing users to communicate only with other devices on the same closed-loop network.
ANOM phones began in 2018 to circulate among international drug traffickers, money launderers and other criminals looking for a secure way to coordinate their dealings. What those criminals did not know was that the FBI and federal prosecutors in San Diego — with help from international partners — had created ANOM and built in a backdoor to be able to read every one of the 27 million messages the users sent and received.
The idea behind ANOM stemmed from several other San Diego-based federal investigations involving hardened encrypted device companies, including one called Phantom Secure and another called Sky Global. A former distributor for Phantom Secure helped FBI agents in San Diego launch the shadow company, and as investigators in San Diego and elsewhere around the world either took down or breached real, competing encryption services, ANOM’s devices spread across the globe and grew in prominence.
In June 2021, after investigators spent years reading every message from at least 9,500 ANOM devices and then building out criminal cases against those users, law enforcement officers in Australia, New Zealand and Europe conducted hundreds of coordinated raids aimed at breaking up the biker gangs, cartel cells, mafia groups and other transnational organized criminals who had unwittingly plotted their illicit business dealings in plain sight of law enforcement. More than 800 people were arrested worldwide as part of the sting, dubbed Operation Trojan Shield in the U.S. and Operation Ironside in Australia.
The investigators purposely did not target U.S. citizens or messages sent to or from users in the U.S., likely due to civil rights concerns surrounding blanket government spying. Instead, the operation was focused on foreign users operating abroad who did not enjoy the same constitutional protections.
However, federal prosecutors in San Diego secured an indictment against 17 foreign nationals who allegedly took on prominent roles in ensuring the success of ANOM, charging them with a Racketeer Influenced and Corrupt Organizations, or RICO, conspiracy.
Thus far, eight of the 17 defendants have been extradited to the United States, and four of those defendants have pleaded guilty. Elhassen was the first to be sentenced.
Joseph Hakan Ayik, a Turkish-Australian suspected drug trafficker who is the lead defendant in the case, was arrested last November in Istanbul. Turkey’s interior minister wrote on social media that at the time of the arrest, Ayik was the leader of an Australian outlaw motorcycle gang suspected of numerous international crimes, including homicide, drug trafficking, kidnapping and arson. Ayik is also wanted by Australian authorities, and it’s unclear if he’ll ever be brought to the U.S.
The indictment alleges that Ayik, Australian national Domenico Catanzariti and Swedish national Maximilian Rivkin were the “administrators” of the ANOM enterprise, while the other 14 defendants were involved in distributing the phones to criminal groups.
Catanzariti was reportedly arrested in Australia where he is facing drug-trafficking charges. Rivkin remains a fugitive and is the subject of a $5 million reward by the U.S. Department of State. He’s wanted by the U.S. on the RICO charges in the San Diego case and wanted by the Swedish government for aggravated narcotics trafficking.
Earlier this year, several of the defendants who have been brought to the U.S. filed motions to dismiss their cases on various constitutional grounds. The motions shared common arguments, namely that ANOM was an illegal government spying operation and that the U.S. has no jurisdiction to prosecute crimes that defendants allegedly committed in other countries.
“It is antithetical to our constitution for the United States government to police the activities of non-citizens whose actions occur abroad,” wrote an attorney for defendant Seyyed Hossein Hosseini, a citizen of the Netherlands. “Yet, in this case, the government has done just that.”
Finnish citizen Alexander Dmitrienko argued that ANOM “was a government invention.” Citing precedent from the 9th U.S. Circuit Court of Appeals, his attorney argued that dismissal is appropriate “when the government engineers and directs a criminal enterprise from start to finish.”
The government “has repeatedly bragged about doing just that” in the ANOM case, Dmitrienko argued.
Aurangzeb Ayub, a dual national of the United Kingdom and the Netherlands, argued that his alleged crimes had no connection to the U.S., much less the Southern District of California.
Prosecutors responded that some of the crimes under the RICO umbrella did occur in the U.S. and the San Diego area, and that was enough to indict the defendants locally. Sammartino sided with the government and denied all three dismissal motions during a September hearing.
In court documents, prosecutors also argued that even though the defendants indicted here were only charged with the RICO violations, most were also involved in drug dealing and other criminality.
That includes Elhassen, who was arrested in Colombia during the coordinated raids of June 2021. Defense attorney Matthew Lombard said Friday that Elhassen moved to the South American nation to be near his children after his Colombian wife returned to her home country and divorced Elhassen. Lombard said his client had no prior criminal record and had previously worked as a flight attendant and car salesman, among other jobs, but his limited ability to speak Spanish left him unable to secure work in Colombia.
That, Lombard said, is how Elhassen fell into selling ANOM phones.
Lombard argued that Elhassen was not a leader of the conspiracy and instead took his directions from an FBI agent or agents posing as a leader of ANOM. Prosecutors argued Friday that Elhassen was one of the main distributors of ANOM devices in Colombia and had even given a device to a contact with the Medellin cartel.
Assistant U.S. Attorney Peter Horn requested an 81-month prison term, telling Sammartino the sentence should send a message of deterrence to others involved with selling encrypted devices meant for criminals. The judge said the 63-month sentence was sufficient to punish Elhassen because he was a low-level member of the enterprise and not a leader or supervisor.
