Two Former Federal Agents Involved In Silk Road Probe Were Bitcoin Thieves And One Was An Extortionist, Justice Department Says

recommendedreading1UPDATED 8:33 P.M. EDT U.S.A. There must be some long faces at the U.S. Drug Enforcement Administration and the U.S. Secret Service today. That’s because two federal agents once assigned to a Task Force investigating the illicit Silk Road marketplace have been charged with federal crimes.

Carl M. Force, 46, of Baltimore, was a DEA special agent who earned a salary of about $150,000 a year, according to a criminal complaint. He was charged with wire fraud, theft of government property, money laundering and conflict of interest.

Shaun W. Bridges, 32, of Laurel, Md., was a special agent for the Secret Service. He was charged with wire fraud and money laundering. His salary was not revealed. He was a member of the Secret Service’s Electronic Crimes Task Force.

The law-enforcement community recoils at this type of thing, because it engenders mistrust and erodes public confidence in the police. Agents who read the narrative in the criminal complaint filed by a special agent for the IRS Criminal Investigations unit are simply going to wince.

One specific allegation against Force is that he sought to extort $250,000 from a subject under investigation by posing as a different person known as “Death From Above.”

Silk Road was the criminal marketplace allegedly operated by Ross Ulbricht, also known as “Dread Pirate Roberts.” Ulbricht was the target of Force’s extortion plot, according to the complaint.

The alleged extortionate scam?  Posing as a killer and telling Ulbricht — already under investigation by Force in his official capacity — that he’d be permitted to live and would not be ratted out if he agreed to turn over a quarter of a million dollars.

Force also posed as “French Maid,” allegedly mining cash from Ulbricht by telling him he could keep him informed about the government’s Silk Road probe.

While these things were going on, Force allegedly was communicating with Ulbricht as “bop,” his official undercover name.

Force, a 15-year DEA veteran, allegedly infiltrated Silk Road in his official capacity as an undercover agent. Here is part of what the Justice Department said today (italics/carriage returns added):

According to the complaint, Force was a DEA agent assigned to investigate the Silk Road marketplace.  During the investigation, Force engaged in certain authorized undercover  operations by, among other things, communicating online with “Dread Pirate Roberts” (Ulbricht), the target of his investigation.

The complaint alleges, however, that Force then, without authority, developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain.  In doing so, the complaint alleges, Force used fake online personas, and engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.  Specifically, Force allegedly solicited and received digital currency as part of the investigation, but failed to report his receipt of the funds, and instead transferred the currency to his personal account. 

In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation.  The complaint also alleges that Force invested in and worked for a digital currency exchange company while still working for the DEA, and that he directed the company to freeze a customer’s account with no legal basis to do so, then transferred the customer’s funds to his personal account.  Further, Force allegedly sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account. 

The “digital currency exchange company” at which Force was moonlighting as a “de facto compliance officer” while on the DEA payroll was CoinMKT. He also was a CoinMKT investor — apparently with funds he’d stolen — and even permitted his name and likeness to be used in CoinMKT materials.

Rancid criminality also was alleged against Bridges, a six-year Secret Service veteran. From the Justice Department (italics added):

Bridges allegedly diverted to his personal account over $800,000 in digital currency that he gained control of during the Silk Road investigation.  The complaint alleges that Bridges placed the assets into an account at Mt. Gox, the now-defunct digital currency exchange in Japan.  He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts. 

 

 

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2 Responses to “Two Former Federal Agents Involved In Silk Road Probe Were Bitcoin Thieves And One Was An Extortionist, Justice Department Says”

  1. Also reported here:
    http://www.theregister.co.uk/2015/03/30/feds_silk_road_bitcoins/

    Force is said to have used his role at the DEA to become chief compliance officer of the CoinMKT exchange – and then used that position to freeze and take control of a wallet containing $297,000 in BTC, which he then emptied into his own wallet. Force is also said to have forged a DoJ subpoena to convince payment company Venmo to unfreeze his personal wallet, and solicited another agent to help cover up the incident.

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  2. Tony H: Also reported here:
    http://www.theregister.co.uk/2015/03/30/feds_silk_road_bitcoins/

    Thanks for this, Tony.

    Patrick

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