Tag: black market

Worldcoin May Have a Biometric Data Black Market Problem

Worldcoin, the digital identity and financial services crypto project that verifies people by scanning their irises, has found itself amid controversy after reports alleging that fraudsters are buying iris scans from the black market to register on the platform.

The project, which is headed by OpenAI CEO Sam Altman, is currently preparing to launch and has been registering users across the world with the help of its physical imaging device called the Orb. The project aims to give everyone on the planet some of its Worldcoin crypto token after registration while their accounts are anonymized.

The lure of free crypto that may be exchanged for real money in the future seems to have been too strong for some people. According to Chinese blockchain-focused outlet Blockbeat, fraudsters have been offering iris scans from Know Your Customer (KYC) merchants in Cambodia for less than $30. Other iris scan may come from African countries such as Kenya.

Blockbeat did not clarify whether the back market iris scans were genuine or whether they were successfully used for registration for Worldcoin.

In response to Gizmodo, Worldcoin said that the platform did not have an issue with iris scans on the black market but it did detect several hundred cases of fraud involving its digital passport World ID, the verification protocol used to determine real identities. The World IDs are being sent to a third-party World app on the black market. The company claims it has taken steps to increase security and create a new recovery process for users’ World ID.

Keep reading

New York’s Heavy Hand Keeps Illegal Marijuana and Tobacco Dealers in Business

While I have fond memories of life in New York, many of them involve defying some stupid rule or regulation. It’s a pleasure to now live in Arizona where government, while still idiotic, generally has a lighter touch. Unfortunately for friends and family I left behind, Empire State officialdom still hasn’t learned its lessons, as evidenced by the heavy regulatory hand stifling sort-of-legalized marijuana, and proposals to similarly reinforce the black market with an outright ban on cigarette sales.

“Governor Kathy Hochul today signed new legislation to increase civil and tax penalties for the unlicensed and illicit sale of cannabis in New York as part of the FY 2024 Budget,” the New York governor’s office announced this week. “The legislation, first proposed by the Governor in March, provides additional enforcement power to the Office of Cannabis Management and the Department of Taxation and Finance to enforce the new regulatory requirements and close stores engaged in the illegal sale of cannabis.”

Keep reading

The growing Chinese investment in illegal American weed

A few days before Christmas, a joint law enforcement task force found nearly 9,000 pounds of cannabis worth almost $15 million during a raid in a suburban neighborhood in Antioch, Calif.

The California Department of Cannabis Control believes that the four houses searched in the bedroom community 45 minutes outside San Francisco were linked to China.

Mexican cartels have a long history of importing, growing and redistributing illicit cannabis in the United States. But Chinese investors, owners and workers have emerged in recent years as a new source of funding and labor for illegal marijuana production.

What is known — from interviews with state law enforcement officials, experts on the international drug trade, economists and lawmakers — is that the number of farms funded by sources traceable back to Chinese investors or owners has skyrocketed. Chinese owners and workers have become a larger presence at illegal grows in Oklahoma, California and Oregon, they say.

In Oklahoma, close to 3,000 of the state’s nearly 7,000 licensed marijuana farms have been flagged for suspicious activity by law enforcement over the last year. Those operations are now being investigated for obtaining their licenses fraudulently and/or for selling into the illicit market, according to Mark Woodward, spokesperson for the Oklahoma Bureau of Narcotics.

Keep reading

The Underground Abortion Pill Network Is Booming

At least 20,000 packets of abortion pills were shipped to people in the United States in the six months after the Supreme Court overturned Roe v. Wade, two sources with knowledge of the situation told VICE News. 

The suppliers of these estimated 20,000 packets are neither abortion clinics nor abortion telehealth organizations, but instead operate outside of the U.S. legal health care system. The demand for their pills, as well as their success at shipping them out undetected, are evidence of the thriving underground abortion network that has sprung up since Roe’s demise devastated access to abortion clinics. 

Meant to be used by people who want to induce their own abortions, these pills—and the people who supply them—are in a legal grey area. Self-managing an abortion is only banned in a few states, but experts have long warned that if a prosecutor is determined to press charges for it, they’ll find a way.

“People have always self-managed abortions and will always self-manage abortion. We’ll have to continue to fight back against all of the bans and restrictions that are being implemented on people,” said Christie Pitney, a licensed nurse practitioner, a midwife with Forward Midfwery, and co-founder of Abortion Freedom Fund, a fund for telehealth abortions. Referring to self-managed abortion, she added, “it’s just going to grow more and more.”

Pitney works with both Aid Access, an organization that mails abortion pills to states where abortion is legal, through providers like Pitney, and to states where it is not, through a doctor who is based overseas. When she started working at Aid Access, where she legally provides abortion pills to people in two states, Pitney estimated that she used to help roughly 60 people get access to abortion pills each month. Now, she said she helps “hundreds” per month.

“Those are specifically for myself, not even the whole organization,” said Pitney, who confirmed to VICE News that at least an estimated  20,000 abortion pills were shipped between the June 2022 Roe decision and December 2022. 

Aid Access is not one of the suppliers included in the 20,000 estimate, suggesting that the true number of abortion pills that have been mailed out through covert channels since the end of Roe is even higher. A recent study of Aid Access also found that the organization received almost three times as many requests for help after Roe was overturned, compared to before a draft of the Supreme Court decision overturning Roe leaked in May 2022. The biggest increases in requests came from people in states that have banned abortion.

Since Roe’s demise, at least 13 states have enacted near-total abortion bans. Data from the Society of Family Planning found last year that, in the two months following Roe’s demise, there were 10,000 fewer in-clinic abortions in the U.S. 

Keep reading

Black Market in Broad Daylight

Operating in the shadows is easy in the United States secondary food market, as few question what happens to food that exceeds its expiration date in leading supermarket chains across the nation. Well, truth be told, expired food gets reprocessed, repackaged, relabeled, and resold to institutions, discount retailers and restaurants.

With scant regulations in place for repurposed food, and institutional purchasing specifications silent, food liquidators underbid their competitors and win contracts nearly every time. In the secondary food market, you get what you pay for, and never has the saying “garbage in, garbage out” been more appropriate.

No matter how much hot sauce or gravy is added as camouflage, spoiled food products are unfit for human consumption and cause foodborne illness. Here, what you don’t know can kill you.

In its most recent public report posted on its website, the Centers for Disease Control (CDC) estimate that, each year, roughly 1 in 6 Americans (or 48 million people) get sick, 128,000 are hospitalized, and 3,000 die of foodborne diseases. However, “recent” is a misnomer here as the CDC’s report is shamelessly outdated by more than ten years. It was issued in January 2011.

Considering that food poisoning is an embarrassing indicator that reveals in its gory horror the systemic corruption of what turns out to be an unregulated food market, it is highly probable that there was undercounting back in 2011—especially in institutional settings. And it is more than likely that things are even worse in 2022.

When oversight agency reports are no longer published, it is clearly because industry statistics and agency performance metrics do not look good. Cover-ups at the federal level are routinely done by appointing incompetent or industry-compromised agency heads, and by defunding key reporting departments, and reducing analytic staff positions and field inspectors.

Despite oversight agency neglect, both schools and prisons have been independently studied for foodborne illness outbreaks. While these reports/articles are also outdated, their shallow analysis remains current. The accepted prevailing narrative blames foodborne illness outbreaks on food handlers that failed to follow U.S. Department of Agriculture (USDA) protocols for cleanliness and neglected to maintain the proper temperatures for food storage and service.

While not to detract from standards set by the USDA, there are no reports that expose the lethal dangers of the secondary food market. Moreover, unlike the primary food market, these repackaging facilities are not inspected, despite their erroneous claims of USDA or FDA certifications.

A media spokesperson for the U.S. Food and Drug Administration (FDA) explained that “the FDA doesn’t oversee meat and poultry, only dairy products.” And that “expiration dates are not regulated, only food safety.”

This is a double-edged sword. On the one hand, food that is spoiled, contaminated, or toxic but within its expiration date is unquestionably unfit for human consumption. On the other hand, expiration dates are necessary as packaging, coloring and processing conceal food quality from consumers, as well as purchasing agents and food handlers.

When a food product’s expiration date is concealed by repackaging and relabeling, all food safety bets are off. The reselling of expired food is a black market in broad daylight.

Keep reading

Illegal Cannabis Growers Still Thrive in California, Stealing Legal Business

The legalization of recreational cannabis in the state of California has reportedly neither led to a downturn in illegal business nor has it relieved stress on law enforcement.

As it turns out, illegal cannabis growers have only thrived since California legalized the recreational use of the drug in 2016, stealing business from legal sellers at half the price due to the lack of regulation or taxation.

“The illegal industry is competing with the legal industry and essentially putting them out of business,” Sgt. James Roy of the Riverside County Sheriff’s Department told Fox News.

Roy, who heads the department’s cannabis eradication team, had recently raided an illegal farm in Riverside County that had four massive white tents, colloquially known as “hoop houses,” containing $1.5 million in illegal cannabis.

“This place is no different than thousands of others we hit this year confiscating about a half-million plants in Riverside County alone,” Roy told the outlet.

“It’s definitely profitable for the illegal market,” Roy later said. “They’re selling greenhouse marijuana by the pound of anywhere from $500 to $2,000 here on the West Coast. But if they take that same exact product and ship that back east, it’s going for two and three times that amount.”

Keep reading

Washington Has Been Much More Successful Than California in Displacing the Black Market for Pot

A new report indicates that Washington, which legalized recreational marijuana in 2012, has been much more successful at displacing the black market than California, where voters approved legalization in 2016. In a 2021 survey by the International Cannabis Policy Study (ICPS), 77 percent of Washington cannabis consumers reported buying “any type of marijuana” from a “store, co-operative, or dispensary” in the previous year, while 17 percent said they had obtained pot from a “dealer.”

The share of Washington consumers who report buying marijuana from a “store, co-operative, or dispensary” is higher than the average for states that have legalized recreational use, which was 57 percent in 2021, according to a nationwide ICPS survey. Washington’s Liquor and Cannabis Board (LCB) paid for the ICPS report on cannabis consumption in that state, and the ICPS has not published California-specific survey data. But calculations based on estimated total consumption and legal sales suggest that the black market accounts for somewhere between two-thirds and three-quarters of marijuana purchased in California.

California’s striking failure to shift consumers from illegal to legal dealers is largely due to a combination of high taxes, onerous regulations, and local retailing bans. While Washington has a relatively high retail marijuana tax (37 percent, plus standard sales taxes), in other respects the state has made it easier for licensed suppliers to compete with illegal sources.

A 2022 study from Reason Foundation (which publishes Reason) notes that local restrictions in California have created “massive cannabis deserts” where “consumers have no access to a legal retailer within a reasonable distance of their home.” Washington has more than three times as many legal dispensaries per capita as California.

Keep reading

Biden’s Cigarette Crackdown a Boon for Drug Dealers, Experts Warn

A new Biden administration effort to regulate cigarettes will bankroll street gangs and bankrupt U.S. tobacco farmers, experts say.

The Food and Drug Administration is preparing this month to require lower nicotine content in all cigarettes—a move critics argue will wreck the $75 billion U.S. tobacco industry amid a global economic crisis and boost a black market as crime spikes nationwide. The news comes weeks after the agency announced its plans to ban menthol cigarettes, which will cost federal and local governments an estimated $6.6 billion in the first year alone.

Richard Marianos, a 27-year veteran of the Bureau of Alcohol, Tobacco, Firearms, and Explosives, said these regulations will shift the demand for cigarettes toward unregulated tobacco grown internationally, which is then purchased and sold by drug dealers.

“The problem again with this administration is they do not take into consideration a totality of subject matter experts,” Marianos told the Washington Free Beacon. “I’ve never seen this much foolishness in my life.”

Marianos, who worked on gang violence at the ATF, said the black market for cigarettes is dominated by street gangs and would grow at least a hundredfold after the FDA implements its nicotine decision. He claims one of his former informants discovered some dealers make $5,000 selling cigarettes in a single afternoon. The FDA’s “uneducated and silly” cigarette plan, he said, would require law enforcement to focus on tobacco sales rather than drugs and violent crime.

The FDA’s cigarette regulations are a part of the Biden administration’s larger “harm reduction” strategy that enables illicit drug use while criminalizing tobacco. The Free Beacon reported in February that the Department of Health and Human Services was set to fund the distribution of crack pipes through a $30 million harm reduction program, which according to the New York Times sparked an “uproar” that “derailed” the agency’s entire drug policy.

Keep reading

California Escalates Its War on the Marijuana Black Market

Having utterly failed to end the marijuana black market in California, lawmakers have decided to backslide into the drug war by increasing fines on those who operate outside of the state’s very costly and tightly regulated legal cannabis system.

California will begin 2022 not just by increasing taxes on legal marijuana cultivation but also by introducing new fines against anybody “aiding and abetting” any unlicensed dealers in the state.

Lawmakers passed A.B. 1138 in September, and it was signed into law by Gov. Gavin Newsom in October to take effect at the start of 2022. California law establishing recreational marijuana already permits civil penalties against unlicensed marijuana dealers. A.B.1138 threatens civil fines of up to $30,000 per violation against anybody providing assistance to an unlicensed dealer. And each day of doing so counts as a new violation.

California’s implementation of recreational cannabis regulations, authorized by the passage of Proposition 64 in 2016, has been a massive mess. The ballot initiative allowed for municipalities to decide whether to allow cultivation and dispensaries, and two-thirds of them still refuse to do so despite the public vote. The state levies high cultivation and excise taxes that are escalated further by local sales taxes in any municipality that does allow for dispensaries to open up shop.

The result has been price and availability issues so severe that experts estimate that between two-thirds and three-quarters of all marijuana purchases take place through unlicensed dealers, which means that the state isn’t getting its share of the revenue. The problem is so severe that the editorial board at the Los Angeles Times recently acknowledged that high taxes for goods fuel black markets.

But instead of eliminating or reducing these taxes, the state is instead taking a more punitive approach. And it’s not just lawmakers looking to make sure the state is getting its cut of the money. The bill was introduced by Assemblywoman Blanca E. Rubio (D–Baldwin Park), but the Assembly analysis of her proposal explains that it was co-sponsored by the United Cannabis Business Association and The United Food and Commercial Western (UFCW) States Council, the union that represents some licensed cannabis industry workers. Several licensed cannabis industries and trade groups have also signed on in support.

Keep reading

Californians Learn That Raising Taxes on Marijuana Fuels Black Markets for Drugs

At the beginning of 2022, tax rates for marijuana cultivated in California are set to increase, even though black market sales completely dominate the retail market in the Golden State.

Experts estimate that about three-quarters of all marijuana sales in California happen not through legal dispensaries, but through unlicensed vendors. California voters legalized the cultivation and sale of marijuana for recreational use in 2016, but extremely high taxes and oppressive regulations have caused the rollout to be a disaster.

The tax increase set to hit on New Year’s Day is a prime example. California taxes the cultivation of marijuana by weight. In the tax regulations that state lawmakers passed for cannabis in 2017, the cultivation tax rate was tied to inflation. When inflation rises, the cultivation tax will also automatically rise.

Inflation rose in 2021, and not by a small amount. The U.S. Bureau of Labor Statistics calculates that consumer prices rose nationally 6.8 percent between November 2020 and November 2021. Because of California’s law, cultivation taxes will rise 4.5 percent. For growers of fresh cannabis plants, the cultivation tax will jump from $1.35 an ounce to $1.41 an ounce. On top of the cultivation tax, the state charges a 15 percent excise tax, and the cities that allow dispensaries have their own local sales tax rates. A person attempting to legally buy marijuana in California can expect the price to balloon between 35–50 percent through tax add-ons, depending on the city.

This, obviously, will make it all the more difficult for legal vendors to compete with the black market. That the increase is happening anyway is absurd and should be seen as a warning against automatically tying any tax rate to inflation.

Keep reading