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Tuesday, January 31, 2023

Fed Silk Road Task Force Agents Charged with Bitcoin Money Laundering

A former Special Agent with the Drug Enforcement Administration (DEA) and a former Special Agent with the US Secret Service (USSS) were charged with wire fraud, money laundering and related offenses for stealing digital currency during their investigation of the Silk Road, a “Dark Web” black market that allowed users to conduct illegal transactions via the Internet.

This netherwFed Silk Road Task Force Agents Charged with Bitcoin Money Laundering Homeland Security Todayorld was the subject of Homeland Security Today’s November 2013 groundbreaking investigative cover report, The Dark Web: The Place Where Digital Evil Lurks. It revealed a place that’s the stuff of celluloid techno-thrillers. A fetid digital ecosystem where the fictional Raymond Reddington’s of the world came to life.

The FBI described the Silk Road as "the most sophisticated and extensive criminal marketplace on the Internet today.”

The charges against the two federal Silk Road investigators are contained in a 95-page unsealed March 25 federal criminal complaint in the Northern District of California.

Carl M. Force, 46, of Baltimore, was a Special DEA Agent, and Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the Secret Service. Both were assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.

According to the Department of Justice, “Force served as an undercover agent and was tasked with establishing communications with a target of the investigation, Ross Ulbricht, aka ‘Dread Pirate Roberts.’ Force is charged with wire fraud, theft of government property, money laundering and conflict of interest. Bridges is charged with wire fraud and money laundering.”

According to the complaint, Force engaged in certain authorized undercover operations by, among other things, communicating online with Ulbricht, the target of his investigation. The complaint alleges, however, that Force then, without authority, 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.

“Specifically, Force allegedly solicited and received digital currency as part of the investigation, but failed to report his receipt of the funds, and instead transferred the currency to his personal account,” the Justice Department stated, adding, “In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation. The complaint also alleges that Force invested in and worked for a digital currency exchange company while still working for the DEA, and that he directed the company to freeze a customer’s account with no legal basis to do so, then transferred the customer’s funds to his personal account. Further, Force allegedly sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account.”

“Bridges allegedly diverted to his personal account over $800,000 in digital currency that he gained control of during the Silk Road investigation,” Justice said.“The complaint alleges that Bridges placed the assets into an account at Mt. Gox, the now-defunct digital currency exchange in Japan. He then allegedly wired funds into one of his personal investment accounts in the United States mere days before he sought a $2.1 million seizure warrant for Mt. Gox’s accounts.”

Bridges self-surrendered while Force was arrested.

In November, Silk Road 2.0 was brought down following a coordinated international law enforcement operation. Dozens of criminal market websites buried in the Dark Web which offered a range of illegal goods and services for sale on the Tor network were seized by the federal government and Silk Road 2.0’s proprietor arrested.

The seizure of these dark market websites, including Silk Road 2.0, were the result of an extensive investigation since November 2013 by Immigration and Custom Enforcement’s (ICE) Homeland Security Investigations (HSI), FBI and law enforcement agencies of approximately 16 foreign nations working under the umbrella of EUROPOL’s European Cybercrime Center (EC3) and Eurojust.

The seizures of the illicit Dark Web marketplaces followed the arrest of Blake Benthall, aka “Defcon,” for his alleged role in operating the Silk Road 2.0 website, which went live in December 2013 not long after the original Silk Road was busted by the Feds in November 2013.

Homeland Security Todayhttp://www.hstoday.us
The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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