Yesterday, March 30, 2015, the U.S. Attorney General’s Office revealed its intent to prosecute one Drug Enforcement Administration (DEA) agent and one Secret Service agent for stealing Bitcoins during their part of the Silk Road investigation. For more information on the Silk Road prosecution see below under “Suggested Links.” Bitcoins are a digital currency which provides users anonymity and convenience for domestic and international transactions.
Carl Force of Baltimore, Maryland and formerly of the DEA along with Shaun Bridges of Laurel, Maryland formerly with the Secret Service were officially charged yesterday with the theft. Specifically, Bridges is being accused of transferring $820,000 worth of Bitcoins to his personal account and Force was unable to explain how $300,000 landed in his Bitcoin account at CoinMKT. Bridges arrived in federal court in San Francisco yesterday and was released with a $500,000 bail – not paid in Bitcoins. Force has been charged with wire fraud, theft of government property, money laundering and conflict of interest. Bridges has been charged with wire fraud and money laundering.
Silk Road was a website where anonymity was key and Bitcoins were used to pay for transactions. The federal government doesn’t like things done without its knowing about it so it created a Silk Road Task Force in Baltimore, Maryland. The investigation led to the eventual and recent conviction of Ross Ulbricht as the creator and operator of Silk Road. Bridges and Force were both part of the Baltimore task force.
During the investigation, Force was working undercover and unbeknownst to his superiors, he created additional online personas and caused Bitcoins to be transferred around without reporting it to others in the task force. Also unknown to the DEA, Force invested in the CoinMKT exchange while still working with the DEA and caused one of CoinMKT’s customer’s accounts to be frozen, then transferred that customer’s money into his personal account.
Bridges, while investigating Silk Road, transferred in excess of $800,000 worth of Bitcoins to a Bitcoin exchange based in Japan called Mt. Gox. He then wired those funds to his personal investment account in the United States just before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts which subsequently caused Mt. Gox to fold.