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Friday, April 03, 2015

Silk Road agents charged with stealing seized Bitcoin










Ross Ulbricht is alleged to have made millions from running the Silk Road

Two former US special agents have been charged with stealing large amounts of digital currency while investigating the notorious Silk Road marketplace.
The US Department of Justice (DoJ) alleges that Shaun Bridges stole more than $800,000 (£540,000) in Bitcoin.
His colleague, Carl Force, has also been charged with money laundering and wire fraud.
Best known for selling illegal drugs, Silk Road was closed in 2013 following raids by the FBI and other agencies.
The man accused of running the site, Ross Ulbricht, was convicted in February, and prosecutors argued that he had earned about $18m in Bitcoin from the operation.

'Fake online personas'

Mr Force, who worked for the Drug Enforcement Administration (DEA), served as an undercover agent during the investigation into the Silk Road.
One of his tasks involved communicating with Ulbricht, known online as "Dread Pirate Roberts."
The DoJ alleges that "without authority", Mr Force "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.
"In one such transaction, Force allegedly sold information about the government's investigation to the target of the investigation."
The 46-year-old is charged with wire fraud, theft of government property, money laundering and conflict of interest.
Shaun Bridges, who worked for the US Secret Service, is charged with wire fraud and money laundering.
The DoJ alleges that he transferred more than $800,000 in Bitcoin into an account at MtGox, a Japanese digital currency exchange that filed for bankruptcy in February.
"He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1m seizure warrant for Mt. Gox's accounts," the DoJ says.
Both men appeared in a San Francisco court on Monday.

Corrupt Secret Service agent Shaun W. Bridges to plead guilty to Silk Road Bitcoin theft

Former law enforcement officer Shaun W. Bridges will plead guilty to wire fraud and money laundering after stealing hundreds of thousands of dollars in Bitcoin from Silk Road by resetting passwords and transferring funds to his own account during the investigation which signaled the end for the online anonymous marketplace
fraud
For computer crime expert and ex-Secret Service agent Shaun W. Bridges, the long arm of the law is about to extend itself from the opposite direction to what he had become accustomed during his career, concluding a case brought against two officers in April this year.
Formerly a member of the Secret Service task force which investigated anonymous online marketplace Silk Road’s illicit activities which included the facilitation of narcotics sale and money laundering, resulting in the seizure of the website by the US government, and the conviction and incarceration of founder Ross Ulbricht, Mr. Bridges is accused of stealing hundreds of thousands of dollars in Bitcoin, and routing the money to his own accounts according to federal court documents.
According to a criminal complaint filed in the U.S. District Court in San Francisco, California, Mr. Bridges’ involvement in the conviction of Mr. Ulbricht for narcotics trafficking, money laundering and computer hacking extends much further.
NBC News reported that by using information he got from his interrogation of a Silk Road customer service representative who had administrator access, investigators had concluded that Mr. Bridges accessed Silk Road’s systems in January 2013, reset several passwords and transferred about 20,000 bitcoin from the accounts, according to the complaint. He then converted the bitcoin into cash through a Japan-based bitcoin exchange and from there sent the money to the shell company’s investment accounts.
According to court documents that were filed last week, Mr. Bridges agreed to plead guilty to wire fraud and money laundering, and is due to be sentenced on August 31. In order to clarify the gravity of this plea, it is important to note that a conviction for wire fraud in the United States is a very serious matter indeed and can result in several decades in jail.
Last month, Mr. Ulbricht was sentenced to life imprisonment for his crimes whilst operating Silk Road.
In addition to Mr. Bridges, a second investigator, Carl Force, the Drug Enforcement Administration’s lead undercover agent in the Silk Road case, faces a hearing in August for allegedly stealing Bitcoin from Silk Road and for allegedly blackmailing Mr. Ulbricht while at the same time selling him information about the investigation.

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Secret Service Agent Skimmed £500k Of Bitcoins

One of the investigators who helped shut down black market site Silk Road transferred illicit Bitcoins to his personal account.
09:59, UK, Thursday 18 June 2015

Bitcoin
Hundreds of thousands of dollars worth of Bitcoins were stolen
A US Secret Service special agent accused of stealing $800,000 (£500,000) worth of Bitcoin during the Silk Road investigation is to plead guilty.
Prosecutors say Shaun Bridges got hold of account passwords for the black market site when he arrested one of its employees, who later turned government witness.
He then moved the virtual currency from the Silk Road accounts to his own, it is claimed.
They were then converted to US dollars and transferred twice, before eventually landing in his bank account.
Ross William Ulbricht taken from his Google + page
Founder Ross Ulbricht was jailed for life
He was only caught because Bitcoin and payment companies became suspicious about the amount of virtual currency he was converting.
The plea deal will see him admit to money laundering and obstruction of justice next month, according to US court papers.
His lawyer said he "regretted his actions from the very beginning".
Silk Road
The site sold everything from drugs to contract killings
Silk Road founder Ross Ulbricht was sentenced to life in prison in May for running the $214m criminal enterprise.
The prosecution claimed during the trial that when Ulbricht discovered an employee had become a government witness, he arranged for him to be killed.
But the supposed hitman that he contacted was in fact a government agent, the court heard.
Ulbricht's family has said his legal team was not allowed to introduce evidence of the corrupt officer during his trial, and that it could be one of their grounds for appeal.

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