Federal authorities say a Baltimore County man made tens of millions of dollars peddling knockoff Xanax pills through the secret corner of the internet known as the dark web.

In an indictment unsealed on Friday, authorities allege that Ryan Farace operated the business for nearly five years, taking payment in the digital currency Bitcoin and shipping the tranquilizer out through the Postal Service.

Farace, 34, is charged with an array of drug-dealing and money-laundering violations. Authorities are also seeking to recover what they say were the proceeds of the alleged operation: $5.7 million and bitcoin valued at $24 million at Friday’s exchange rates.

Farace is in custody. His attorney said he was reviewing the case.

“It’s still kind of early on,” said Warren Brown, the lawyer. “We’re evaluating all of the evidence.”

A second man, Robert Swain, was charged with money-laundering conspiracy in the case, but his alleged role is not described in court filings. His attorney could not be reached for comment.

Police have been engaged in a global cat-and-mouse game with users of online drug markets for years. The sites are typically accessed using a special web browser that hides users’ identities, and using bitcoin allows buyers and sellers to step outside the regular banking system, where transactions are easily watched. Encrypted messages allow deals to be made in secret.

But the system does have vulnerabilities. Packages must be mailed out, bitcoins must be converted to regular money to be spent in the real world, and law enforcement has sometimes been able to break through the technological protections the sites use.

An investigation into a Harford County drug dealer in 2012 became part of the operation that took down Silk Road, the first big online drug market. Federal authorities worked with European police last year to take the sites Hansa and AlphaBay offline.

Attorney General Jeff Sessions called the operation against AlphaBay one of the biggest criminal cases of 2017.

“Make no mistake, the forces of law and justice face a new challenge from the criminals and transnational criminal organizations who think they can commit their crimes with impunity using the dark net,” he said. “The dark net is not a place to hide.”

The allegations against Farace date back to November 2013. In the indictment, which was filed in February but not made public until Friday, authorities say he went online and bought pill presses and counterfeit Xanax molds that he used to make pills with alprazolam powder.

Farace is accused of soliciting orders on dark web marketplaces and communicating with his buyers using encrypted messaging tools.

Authorities say Farace sometimes paid for the postage for the packages he’s accused of mailing out using prepaid debit cards in other people’s names.

Authorities say Farace was in possession of 5,413 pills in May 2016, 1,180 in November 2016 and 341 in January 2017.

The charges leave much about the case unclear, and there are large gaps in the court docket for the case. Farace’s online identity and the marketplace he is accused of using are not revealed, and the filings do not explain how authorities uncovered his activities.

For someone accused of running a lucrative online drug business, Farace does not appear to have lived an especially grand lifestyle. He lived at a house in Sparks until 2016, when he took out a mortgage on a $375,000 home in Reisterstown.

He allegedly drove a 2010 Lincoln Navigator, which according to a Facebook page in his name he bought used in 2014.

Later that year a post on the account talks about setting up a “top secret web site.”

“Can’t reveal any details still looking into legalities but its got huge potential, and all these things got me really excited,” the post reads.

“We doin big things here are FARACE INC.”

The government is now seeking to seize the two homes, the Navigator and a 2012 GMC pickup truck.

Farace received probation before judgment after an arrest for drug possession in Ocean City in 2004.

iduncan@baltsun.com

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