Ex-federal agents at center of Silk Road case charged with stealing bitcoins

Two former federal agents on Silk Road case charged with stealing bitcoins

Two former federal agents investigating the black market website Silk Road, where drugs were sold for bitcoins, have been accused of stealing some of the digital currency during the probe.

Carl M. Force and Shaun W. Bridges, both of whom were integral to the operation that ended with the conviction of the alleged founder of Silk Road, were charged with theft of government property, wire fraud and money laundering, according to a 95-page criminal complaint unsealed Monday in U.S. District Court in San Francisco.

Earlier this year, Ross William Ulbricht was convicted on drug trafficking, money laundering and other charges in allowing millions of drug deals to take place through the Silk Road website, illegally reaping $18 million in bitcoins.

Force, a former investigator with the Drug Enforcement Administration, was the lead undercover agent who communicated with Dread Pirate Roberts, the online alias allegedly used by Ulbricht, according to the complaint.

It alleged that Force demanded Ulbricht pay him $250,000 in bitcoins to withhold certain information from the government and, on another occasion, created an online alias under which he asked Ulbricht for $100,000 in bitcoins in exchange for information on the federal probe into Silk Road.

Force also allegedly laundered funds given to him as part of the investigation, siphoning them into personal accounts rather than turning them over to the government, according to the complaint.

Bridges, a former Secret Service agent, is accused of stealing hundreds of thousands in bitcoins from Silk Road. In January 2013, the website “suffered a sizable theft of bitcoins.” which were moved into a digital currency exchange in Japan, according to the complaint.

Around the same time, Bridges formed a limited liability company and, according to the complaint, funded that business account “exclusively with wire deposits” from the same Japanese exchange, the complaint said.

Ulbricht's attorney, Joshua Dratel in New York, has repeatedly said Ulbricht was not “Dread Pirate Roberts,” an alias that is a reference to a character from the film, “The Princess Bride.”

The government spent at least two years infiltrating Silk Road. Homeland Security Agent Jared Der-Yeghiayan testified that he began to take over staff accounts on the website as federal agents arrested employees who agreed to cooperate. The government presented numerous instant messages at Ulbricht’s trial between Der-Yeghiayan and Ulbricht.

The government also presented emails that suggested Ulbricht was willing to pay to have at least five people killed whom he deemed threats to Silk Road. He was not charged with any crime related to those messages, but he is expected to stand trial in a murder-for-hire plot in Baltimore stemming from the same investigation.

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The Associated Press was used in compiling this report.

Copyright © 2016, Los Angeles Times

UPDATE

12:33 p.m.: This post has updated a wire story with a staff-written story.

This post was originally published at 10:10 a.m.

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