Two feds charged for stealing Bitcoin during Silk Road investigation
Two former US federal agents have been charged with wire fraud, money laundering and related offenses for stealing digital currency during their investigation of Silk Road.
Carl M. Force, 46, of Baltimore, was a Special Agent with the Drug Enforcement Administration (DEA), and Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the US Secret Service (USSS). Both were assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road, an underground black market that allowed users to conduct illegal transactions over the Internet.
Force served as an undercover agent and was tasked with establishing communications with a target of the investigation, Ross Ulbricht, aka “Dread Pirate Roberts.” Force is charged with wire fraud, theft of government property, money laundering and conflict of interest. Bridges is charged with wire fraud and money laundering.
According to the complaint, 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.
However, he also, 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, 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 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 sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account.
Bridges 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 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.
Bridges self-surrendered and appeared before Magistrate Judge Maria-Elena James of the Northern District of California on Monday. Force was arrested on Friday, March 27, 2015, in Baltimore and today appeared before Magistrate Judge Timothy J. Sullivan of the District of Maryland.