Crime - Sacto 911

Secret plea deal reached in Internet weapons, poison case

James Malcolm, third from left, in courtroom artist’s representation of June court hearing. Malcolm is seated with Assistant U.S. Attorney Justin Lee, at left; Assistant Federal Defender Benjamin Galloway; and U.S. Magistrate Judge Edmund F. Brennan.
James Malcolm, third from left, in courtroom artist’s representation of June court hearing. Malcolm is seated with Assistant U.S. Attorney Justin Lee, at left; Assistant Federal Defender Benjamin Galloway; and U.S. Magistrate Judge Edmund F. Brennan. Vicki Behringer

Federal prosecutors have reached a secret plea deal with a Carmichael man at the center of a bizarre case involving sales of poisons and weapons over the Internet.

James Christopher Malcolm was arrested in May 2014 on explosives and weapons charges in a wide-ranging case that focused on the dark net, the shadowy side of the Internet where online sales of weapons, narcotics and counterfeit products are bartered in the secret realm using encryption and payments in Bitcoin and other untraceable currencies.

Malcolm, 31, was arrested by federal agents after a two-month undercover operation that was cut short when authorities became concerned that he had discovered he was being watched, and that his products might endanger residents of his neighborhood, court records state.

He was charged with illegally dealing in firearms, possession of a machine gun and transferring explosive materials.

Malcolm, who has been held in the Sacramento County jail without bail since his arrest, originally pleaded not guilty and sought a jury trial.

But at a hearing in federal court in Sacramento on Thursday, Malcolm pleaded guilty to possession of a biological agent, unlawful dealing in firearms and illegal possession of a machine gun.

“As the docket shows, Mr. Malcolm was briefly involved in the sale of weapons and a crude form of biotoxin,” his federal public defender, Ben Galloway, said Friday. “This was Mr. Malcolm’s first brush with the law, and it was a desperate attempt to keep a roof over his family’s heads.

“Mr. Malcolm never intended harm to anyone, and no one was harmed by his actions. Still, he regrets his mistake and he is working to make amends.”

Malcolm faces sentencing Jan. 14, but the plea agreement he entered into with prosecutors was filed under seal.

This likely indicates Malcolm has entered into a cooperation agreement with the government and is assisting investigators and prosecutors in similar cases, including one against a prominent Bay Area political consultant who is accused of possessing chemical weapons and toxins.

That defendant, Ryan Kelly Chamberlain II, was the subject of a nationwide manhunt by the FBI in May 2014 before he was found in San Francisco and arrested.

He was charged last week in a new, six-count grand jury indictment that accuses him of possessing an unregistered destructive device, a firearm that had its serial number removed, biological toxins for use as a weapon, and a chemical weapon. The indictment alleges Chamberlain possessed abrin and a “delivery system,” as well as the deadly poison ricin “for use as a weapon” and cyanide in a form the indictment refers to as a “chemical weapon.”

Chamberlain, 44, was arraigned in federal court in San Francisco on Monday and pleaded not guilty.

Federal officials have been tight-lipped about both cases, but court documents have described a nationwide network built around a now-defunct website known as Black Market Reloaded.

Authorities believe that site was similar to the highly secretive Silk Road website, which was a network for narcotics sales until it was shut down. Its founder, Ross Ulbricht, was sentenced last May to life in prison.

Court documents filed in the Chamberlain case indicate that Malcolm, identified as “Witness 2,” shipped samples of the lethal toxin abrin to Chamberlain’s Polk Street apartment in December 2013.

The shipment, sent from a Vacaville UPS store, contained enough poison for “hundreds of lethal doses,” court documents state.

Malcolm also is believed to have shipped cyanide and abrin, which is extracted from the seeds of the rosary pea plant, on the same day from Vacaville to a New York resident identified only as “Witness 1.”

That individual set federal agents in motion when he walked into a New York police precinct with a vial of cyanide and told officers he had purchased it online for a suicide attempt.

Court documents show that Malcolm faces up to 25 years in prison and fines of up to $750,000 because of his guilty plea.

But the actual sentence he receives may be substantially influenced by details still held in his secret plea agreement, and not available to the public.

Sam Stanton: 916-321-1091, @StantonSam

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