Malta company supplied encrypted phones to Italian mafia

A Malta-based company has been selling encrypted phones and secure messaging applications to the Italian ‘Ndrangheta and other underground organisations since 2016, a collaborative investigation by IrpiMedia, Motherboard and LaViaLibera has revealed.

No.1 Business Communication Ltd., registered to an address in Msida to Jack Burstein, an American-Polish banker turned cryptophone salesman, became a favourite supplier among drug smugglers and other criminals following the police infiltration of mafia communication systems supplied by other companies.

The collaborative investigation published on Thursday revealed how a UK branch of No.1BC was initially set up in 2010 by convicted British drug smuggler Roy Livings. Livings also set up other branches across Europe, including a German branch closely linked with No.1BC Malta set up in 2016.

Burstein, an American banker, took over as CEO of No.1BC Malta in 2019. Burstein is also the founder of Strategica, a US bank linked to the directors of other branches of No.1BC. The owner of the German branch of No.1BC sat on Burstein’s board of directors at Strategica.

The German and Maltese branches of No.1BC are the only remaining active parts of No.1BC. The Maltese branch is registered to an address in West Street, Msida. When investigators showed up at the listed address, it could not be located.

The encrypted communications networks No.1 BC offers are a coveted asset for any underground or criminal organisation, with the Italian ‘Ndrangheta being no different. In one ‘Ndrangheta of Locrida drug smuggling case involving 2.2 tonnes of cocaine, No.1BC Cryptophones were called an “urgent need” for the success of the operation.

These cryptophones are specially modified smartphones built specifically for secure communications. Companies selling these phones have proprietary messaging apps which offer end-to-end encryption and often offer additional services such as the remote deletion of data, a feature used by criminals when the phones are confiscated by authorities.

Closed communications systems are preferred by criminal organisations such as the ‘Ndrangheta for their “security through obscurity” dogma, despite open-source encrypted devices offering improved security since their encryption systems are available to public scrutiny.

Competitor systems to No.1 BC such as EncroChat and Sky were successfully hacked by European authorities while the FBI ran its own networks Anom and PhantomSecure as honey pots, or entrapment schemes, for criminals.

The Italian ‘Ndrangheta stands accused of various international illicit operations which include South American cocaine smuggling, weapons smuggling out of Pakistan and laundering illegal proceeds within Europe, according to Europol.