The federal government has become the owner of a significant amount of Bitcoin after seizing millions of dollars in the digital currency from criminals associated with the online black market Silk Road. However, two former federal agents who were involved in the investigation are now facing charges of wire fraud, money laundering, and other offenses for allegedly stealing Bitcoin for themselves.
The two agents, one from the Drug Enforcement Administration and the other from the U.S. Secret Service, were part of the team investigating Silk Road, an underground illicit black market that was shut down in 2013. The charges against the agents paint a picture of corruption within the federal government, as they allegedly tried to enrich themselves while working to bring down one of the Internet’s top cybercriminals.
The charges against the agents could complicate the government’s case against Ross Ulbricht, also known as “Dread Pirate Roberts”, the founder of Silk Road who was found guilty last year of aiding drug trafficking through the site. The federal government seized more than $33 million worth of Bitcoin as part of the case against Ulbricht and others.
The two agents facing charges, Carl Force and Shaun Bridges, allegedly set up fake online personas in an attempt to extort money from Ulbricht. Force, who was the lead agent in the case, managed to get $100,000 in Bitcoin from Ulbricht, which he deposited into his personal accounts. He then allegedly used a series of transactions to launder the stolen money, including transferring $235,000 to an account in Panama.
Bridges, the computer forensics expert on the case, is accused of stealing $820,000 by using wire transfers to move Bitcoin that had been stolen from Silk Road and deposited in a Japanese bitcoin exchange. He then signed the government’s warrant to seize millions of dollars in Bitcoin from the exchange. When he learned the FBI was investigating suspicious activity in the Silk Road case, Bridges allegedly transferred $250,000 from his personal account to one he shared with another person.
The charges against the agents highlight the potential for corruption within law enforcement agencies and raise questions about the integrity of the investigation into Silk Road. The case against Ulbricht and the other criminals associated with the black market may be affected by the actions of these two former agents.