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Crime / Cryptocurrency / Federal government

2 federal agents allegedly stole Bitcoin while investigating Silk Road

The former DEA agents, who were indicted Monday, were assigned to investigate the underground black market as part of a Baltimore task force.

Bitcoin. (Photo via Wikimedia Commons)

Two Baltimore-based federal agents were supposed to be investigating Silk Road, but they got sucked into the online black market instead, according to new allegations from federal investigators.
Carl M. Force and Shaun W. Bridges, who are no longer with the government, were charged Monday in a Bitcoin money laundering scheme that was perpetrated during their time working with the U.S. Drug Enforcement Administration’s (DEA) Silk Road Task Force. The feds were attempting to root out the site after it was exposed as a haven for drugs.
Force, 46, of Baltimore, was assigned to go undercover to investigate Silk Road founder Ross Ulbricht, aka “Dread Pirate Roberts.” But instead of focusing only on Ulbricht, Force allegedly created additional personas and “engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.” In one case, the feds allege that Force sold government information about the investigation to Ulbricht.
Ulbricht was later arrested after different undercover agents carried out a sting operation that ended in the science fiction section of a San Francisco library. Ulbricht was convicted last month on a host of charges, including drug trafficking.
Monday’s indictment states that Force’s illegal activity didn’t only involve the founder. While he was investigating Silk Road for the feds, Force was also running his Bitcoin exchange company. At one point, he ordered a customer’s account to be frozen, then transferred the money to his own account, according to court documents.
Bridges, 32, of Laurel, allegedly became entangled with a Bitcoin exchange that he helped put out of business. allegedly diverted $800,000 in Bitcoin to a personal account. He then put the assets in Mt. Gox, a now-defunct digital exchange currency out of Japan. Days before he personally sought a $2.1 million seizure warrant for accounts at the company, Bridges transferred his own Bitcoin out of Mt. Gox, the feds allege.
Force was arrested Friday in Baltimore, while Bridges surrendered on Monday morning. They were scheduled for arraignment hearings Monday.

Companies: U.S. Government

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