Two former federal agents who helped bring down the online black market called the Silk Road are now being charged for stealing Bitcoins for themselves during the investigation.
According to the New York Times, former agent Carl Mark Force IV worked for the Drug Enforcement Administration (DEA) and former agent Shaun Bridges worked for the Secret Service. Federal court documents prove that both former agents are guilty of money laundering and wire fraud, having taken a slice of the millions of Bitcoins seized by the government from the Silk Road black market.
A complaint was filed against former agent Force that was unsealed in federal court on Monday. The complaint accused Force of “[stealing] and [converting] to his own personal use a sizable amount of Bitcoins. Rather than turning those Bitcoin over to the government, Force deposited them into his own personal accounts.”
Bitcoins are an online currency that can be used to purchase real goods and services through the internet, and they were the primary currency used in the Silk Road exchange. Both former agents played a large role in building a case against the founder of the Silk Road, Ross Ulbricht. Force was one of the lead agents in the case and Bridges worked as a computer forensics expert.
During the investigation, Force set up fake internet identities and attempted to extort money from Ulbricht himself. The former agent asked for $250,000 from the criminal in exchange for his agreement not to share incriminating information with the federal government. Force successfully received $100,000 in Bitcoins from Ulbricht and laundered the money into his personal account. In an unrelated criminal complaint, the former agent was accused of using his executive status at CoinMKT to steal money from customers. Force transferred $297,000 in Bitcoin to his personal funds.
At approximately the same time, Shaun Bridges illegally wire transferred $820,000 in Bitcoins that had been seized from the Silk Road and claimed it for himself.
Both of the former agents were arrested last week and are expected to appear before a judge today (Monday).
According to CNN, the arrest of the former agents could potentially damage the federal government’s chances at sentencing Ross Ulbricht. Although Ulbricht has already been charged for his involvement in the $33 million worth of Bitcoins that the government seized from drug-related exchanges, he is still awaiting sentencing. The corruption of the former agents might interfere with the case the government presented against the “Dread Pirate Roberts” Ross Ulbricht.
Bitcoin was also recently the victim of a $5 million hack, which caused the value of the online currency to plummet. Read more here.
[Photos courtesy of Getty Images]