Silk Road

Feds Finally Find Real Crime in Silk Road Case: Its Agents Stealing Bitcoin

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Arising from the federal government's multi-pronged investigation into the operation of the darkwebsite Silk Road, used to buy and sell any item, legal or not, today the Justice Department released a criminal complaints against a Drug Enforcement Administration agent and a Secret Service agent for robbing bitcoin while conducting the investigation.

The actual criminal complaint against Carl Force (DEA) and Shaun Bridges (Secret Service).

In it, Force is accused of extorting bitcoin from "Dread Pirate Roberts," the pseudonymous operator of Silk Road, under various fake identities, and keeping bitcoin delivered to him in his capacity as undercover agent rather than turning them over to the government.

He is also accused of working as a compliance officer for a bitcoin exchange called CoinMKT (while still working as a DEA agent) and in that capacity stealing $297,000 worth of bitcoin from a client of CoinMKT. He is also accused of falsely using a supervisor's signature stamp to direct a payments company that had frozen Force's own account for suspicious activity to undo that freeze, while ordering that company to not independently inquire  to the DEA on the matter and trying to bury the paper trail.

Bridges is accused of funding a company he launched called Quantum International Investments with bitcoin from Mt. Gox, in a suspicious set of transactions that the Justice Department seems to believe originated with bitcoin stolen from Silk Road during the course of Bridges' investigation.

New York Times and Washington Post accounts.

My December Reason feature on the federal government's war against Silk Road. In the aftermath of the successful prosecution of Ross Ulbricht for launching the site, I wrote about how that conviction was a blow against justice and safety.

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  1. He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

  2. I’ll give this to the government. They’re very talented at finding new and creative ways to disgust me.

    1. Here’s one more.: An Iranian journalist writing about the nuclear negotiations between the United States and Iran has defected. In an interview Amir Hossein Motaghi, has some harsh words for his native Iran. He also has a damning indictment of America’s role in the nuclear negotiations.
      The U.S. negotiating team are mainly there to speak on Iran’s behalf with other members of the 5+1 countries and convince them of a deal,” Motaghi told a TV station after just defecting from the Iranian delegation while abroad for the nuclear talks. The P 5 + 1 is made up of United States, United Kingdom, Russia, China, France, plus Germany.

  3. You know bitcoin has really come into its own as a valuable commodity when the feds help themselves to it during an investigation.

  4. It’s just been a hit parade with the DEA and Secret Service this year.

    They obviously need bigger budgets, more paperwork and associated paperpushers, and police-statey powers to right their respective bureaucratic ships I’m sure.

    Because that works every time.

    1. Training. You forgot training.

      1. The kind of training that can only be delivered at multi-day, off-site conferences.

        1. At resort hotels.

          1. With prostitutes AND a buffet.

            1. A prostitute buffet?

              1. The fringe benefits of government jobs.

              2. See the very first comment re: eating out.

    2. In last night’s VICE, the first segment was about cocaine smuggling through Africa into Europe. They interviewed a DEA bigwig. Not only was he the exact kind of asshole you would expect, it was revealed that the DEA does sting operations in other countries. I mean…WTF? The DEA is the equivalent of the CIA now, but just for drugs?

      1. They’ve been running paramilitary ops in South and Central America for ages.

        Because that’s what cops do. They go into foreign countries, assault the citizens of those countries, and take their shit.

      2. I bet he loves to discuss the success of Portugal’s decriminalization.

      3. There are several Nat Geo shows about it. Our DEA agents follow the Colombian Police around and tell them what to do.

        1. A small price to pay for free guns, money and drugs.

      4. They do this to pressure foreign governments into implementing prohibition policy and to make that prohibition actually enforceable, which in many cases it would not be enforceable without foreign money aka bribes flowing in.

        1. Oh, I know. The DEA was going to foreign countries and basically strongarming them into cracking down on people in their own government making some money off of moving the drugs, something that they clearly had no interest in doing without the DEA threatening them.

  5. Wow, what a surprise. I’m almost as shocked as when I found out Ellen is gay.

    1. You might want to check the expiration date on that reference, Epi.

      1. Sorry, Hugh. I was going to say something about your mom and STDs but I realized she may not have told you yet. Basically, I gave her something horrible.

        1. I hear Warty got to her first, so she probably gave as well as she got.

          1. I already have everything anyway, so no worries for me.

        2. She is bearing your child? Cuz I cannot think of anything more horrible than that.

  6. Nothing to see here, move along…

    1. +1 harshly worded paid vacation in his permanent record.

  7. I love the venality of LEOs. It’s nearly as predictable as the federal prosecutor failing to get an indictment from the grand jury in these cases.

  8. Force is accused of extorting bitcoin . . . keeping bitcoin delivered to him in his capacity as undercover agent rather than turning them over to the government.

    The real crime in this case turns out to be the one committed against the *state*.

    they’re certainly not concerned at all that one of the state’s agents was *extorting* money, only that he didn’t turn that money over to the government.

  9. This is too easy to fix, as long as all the transactions currency remain(ed) in BTC it’s all in the blockchain… d’oh!

    Well, *if* they had the blockchain/protocol could just do a chargeback… d’oh!

    Okay, *if* it all stayed in the blockchain, and without a/the chargeback capability the transactions can be undone circular fashion as long as the law can get ahold of the signatures and/or control the blockchain… d’oh!

  10. Its terrible! Federal agents, taking people’s money!?

    Why, they should just legalize these drugs and tax them. That would be totally different and proper.

    1. “Nice darknet you got there, be a shame if something bad happened to it. “

      1. god forbid people do something in an unregulated environment without any oversight

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