A federal police officer is currently undergoing legal proceedings in the Melbourne Magistrates Court, facing allegations of seizing cryptocurrency confiscated from an online drug trafficking syndicate.
The hearing, presided over by Judge Malcolm Thomas, is still ongoing, with the defendant's lawyer saying the case was “circumstantial” and they will contest the charges.
Drug smuggling raid uncovers cryptocurrencies
William Wheatley, the currently suspended federal police officer, was initially charged in December 2022. According to court documents, Wheatley is accused of stealing 81,616 bitcoins from a cryptocurrency wallet found during an investigation into drug and steroid smuggling through the postal system in January. 2019.
During the raid, law enforcement discovered large quantities of steroid-like substances and an encrypted email service allegedly used in drug transactions, with payments made in Bitcoin. Subsequently, a Trezor-branded hardware crypto wallet was found and turned over to Icarus investigators.
Nearly three weeks later, the Icarus Task Force, responsible for the raid, received a judge's approval to restore access to the digital wallet. Cyber Crime Squad investigator Sergeant Dion Ashtebis, who was called to assist after the raid, gained access to the wallet on February 14 and found that 81,616 bitcoins had been transferred from the wallet shortly after 5pm on January 29 – four days after the device was seized. . .
The stolen amount, worth approximately $450,000 at the time, was transferred to two additional digital wallets before losing traceability. Today, the same amount of Bitcoin is worth more than $6.3 million.
Investigation reveals the officer's involvement
Investigators initially suspected that an associate of the drug dealers had organized the movement of the money. However, the case was reopened in 2021 when new tracking tools implicated a police officer.
Detective Achtypis discovered that one of the relevant IP addresses was linked to the then AFP headquarters in Melbourne, leading him to speculate that a police officer may have been involved in the transfer of cryptocurrencies.
Craig Gillespie, a cryptocurrency investigator based in Wales, was appointed by the Australian Law Enforcement Integrity Commission to track and trace the money. Gillespie confirmed that between January 29 and April 11, 2019, 28 transactions were made from the wallet on different cryptocurrency platforms. Some of these transactions are alleged to be due to withdrawals made into Mr Wheatley's bank account between 2019 and September 2022.
During the proceedings, Australian Federal Police Officer Jesse White testified that he was the only Federal Police officer present during the search at Hoppers Crossing on 25 January. He admitted that when the cryptocurrency wallet was discovered, he was unaware of its nature and contacted Mr Wheatley, described as a “specialist” in the AFP's cybercrime division, for assistance.
