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Wednesday, April 01, 2015

DOJ: These federal officials stole bitcoins from Silk Road while investigating Silk Road


 
The first rule of investigating underground black markets should probably be not to become a digital black marketeer yourself.
But that's exactly what the Justice Department says two federal officials did while probing Silk Road, the digital marketplace for illicit goods. According to a complaint unsealed Monday, a Drug Enforcement Administration official and an investigator for the Secret Service are both being accused of stealing bitcoins from Silk Road that they should have turned over to the government.
The Secret Service agent, Shaun Bridges, was a computer forensics expert assigned to the investigation of Silk Road's founder, who goes by the codename Dread Pirate Roberts. Bridges allegedly stole $800,000 worth of virtual currency, according to the complaint, and kept his stash in the exchange known as Mt. Gox. The Tokyo-based exchange infamously imploded last year after it admitted it had lost track of millions of dollars' worth of bitcoins.
The DEA official, Carl Force, was "the lead undercover agent in communication" with Roberts — a role that gave him the power to extort. Using a series of private, fictitious accounts, Force allegedly told Roberts he would bury evidence related to the case if Roberts paid him $250,000. In another instance, Roberts allegedly paid Force $100,000 in bitcoins after Force, using one of his anonymous accounts, offered up information related to the federal investigation.
"Force and Bridges abused their positions as federal agents and engaged in a scheme to defraud a variety of third-parties, the public, and the government, all for their own financial enrichment," the complaint reads.
Steve Levin, a lawyer representing Bridges, said Bridges "maintains his innocence and will answer the charges at the appropriate time."
It's hard to miss the irony in the Silk Road investigators themselves becoming the target of an investigation. But the complaint also underscores how difficult it can be for the government to stay abreast of digital criminal activity at a time when technology has gotten so complex.


Read the full complaint in the link below.
https://www.scribd.com/doc/260390488/Criminal-Complaint-Force



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