Federal Agents Arrested for Bitcoin Money Laundering and Fraud

Originally published on April 1, 2015, at NationofChange.org

Two former federal agents have been charged with money laundering, wire fraud, and related offenses during their investigation of the online black market, Silk Road. Former DEA special agent Carl Force allegedly abused his authority by stealing from the government and selling sensitive information to the target of their investigation, while former Secret Service special agent Shaun Bridges reportedly diverted over $800,000 Silk Road bitcoins into his personal account instead of confiscating the funds as government property. By taking advantage of encrypted communications, multiple aliases, and hacked administrator accounts, these federal agents operated in the shadows and above the law.

According to court documents, Ross Ulbricht created Silk Road in January 2011 and operated the underground website until law enforcement agencies shut it down in October 2013. By concealing the IP addresses of the computers, the Silk Road became an open market facilitating both legal and illegal commerce. Although the majority of items sold on the website were illicit narcotics, Silk Road also offered computer hacking services, fake IDs, and other forged documents. After Sen. Chuck Schumer learned about the site, he asked law enforcement authorities to shut down Silk Road.

Between 2012 and 2013, agents Force and Bridges served on the Baltimore Silk Road Task Force. As the lead undercover agent, Force established communication with Ulbricht, while Bridges worked as the computer forensics expert on the team. Force initially fed Ulbricht fraudulent information, but the DEA agent also created multiple pseudonyms and began encrypting his surreptitious communications with Ulbricht.

Under the moniker “Nob,” Force posed as a criminal offering to kill Silk Road employee Curtis Green before he could become a potential witness against Ulbricht. Designed to ensnare Ulbricht into a murder-for-hire plot, the sting merely allowed Force to initiate contact with Ulbricht who went by the pseudonym “DPR” or “Dread Pirate Roberts.” After a few months of communication with Ulbricht, Force began encrypting his conversations and utilizing multiple online personas without informing his superiors.

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