Vincent Ramos, the now 46-year-old former CEO of encrypted phone firm Phantom Secure, was freed from U.S. federal prison on Wednesday. His release comes after spending around five years in prison for running a company that sold encrypted phones to serious organized criminals around the world, including the Sinaloa drug cartel.
Ramos’ case was significant both in that it was the first time the U.S. treated an encrypted phone company as a criminal entity in its own right, and that it was one of the first dominoes in a long track that culminated in the FBI secretly running its own backdoored encrypted phone called Anom.
On Wednesday Victor Sherman, one of Ramos’ attorneys, told 404 Media in an email that once released Ramos is a “free man pending deportation to Canada.” The Bureau of Prisons (BOP) website says that Ramos was no longer in BOP custody as of Wednesday.
Recently in a prison phone call, Ramos told 404 Media he was looking forward to seeing his family after being released.
Ramos incorporated Phantom Secure in 2008. The company took BlackBerry mobile handsets, removed the camera, microphone, and GPS functionality, and then installed encrypted email software onto them.
“I truly believe in our right to privacy and like many internet users I have always had a concern with the security of my email storage and communications,” Ramos wrote on an early version of Phantom Secure’s website.
Broadly, Ramos started the company with legitimate intentions, providing the phones to rappers and VIPs, according to Phantom Secure distributors and Ramos family members I previously spoke to. But soon the phones became popular with drug traffickers, especially after a notorious smuggler called Hakan Ayik used the devices. As Phantom Secure phones became a phone-of-choice for criminals, Ramos deliberately leaned into that customer base. Then as competition from other phone companies popular with criminals increased, such as Sky, Ramos catered to that underground market even further.
After encountering Phantom Secure phones during the investigation of Owen Hanson, a college athlete turned large-scale drug trafficker, prosecutors in San Diego decided to investigate Phantom Secure itself. In 2017, undercover agents posing as drug traffickers recorded Ramos saying he made Phantom Secure “specifically for this,” referring to drug smuggling. A year later, U.S. authorities cornered Ramos in a Las Vegas hotel suite and asked him to put a backdoor into the company’s encrypted phones, which would allow them to read user messages. Ramos declined to do so.
He then made a dramatic escape from the hotel suite where authorities were holding him, and tried to make it across the Canadian border before being caught in a diner.
“I am sorry and accept responsibility for my actions that have led me to where I am today. I apologize to the Court, the government, and anybody that may have been negatively impacted by my conduct,” Ramos later said in his sentencing hearing. “I apologize to my family and thank them for their support. To my wife, I thank you for everything that you do. I love and appreciate you.” Ramos was incarcerated in 2019.
After the closure of Phantom Secure, a source approached the San Diego authorities with a tantalizing proposition: would they like to take control of a different encrypted phone company, called Anom, and use it for their own investigations? In other words, would the FBI like to secretly run an encrypted phone company for organized crime, while surreptitiously intercepting all of the sent messages? That led to Operation Trojan Shield, the largest law enforcement sting operation ever, and ushered in a new world of policing where law enforcement agencies hack, compromise, or even run entire encrypted chat platforms.
