A Secret Service agent and a DEA agent with lead roles in the investigation to take down the Internet drug bazaar Silk Road are now facing charges of stealing proceeds from the underground site and hiding them in offshore accounts.
Former DEA agent Carl Force, 46, of Baltimore, the task force agent charged with going undercover to communicate online with Silk Road operator Ross Ulbricht, known as Dread Pirate Roberts, is facing charges of using several online aliases to extort hundreds of thousands of dollars worth of bitcoin from Ulbricht, according to a criminal complaint unsealed Monday. Force is facing charges of money laundering, wire fraud, theft and conflict of interest.
Prosecutors also charged Shaun Bridges, 32, of Laurel, Md., a former special agent with the U.S. Secret Service, with accessing Silk Road accounts using password information from a Silk Road customer service representative arrested in a drug sting. Bridges, who joined the Secret Service in 2009, is facing charges of wire fraud and money laundering.
The FBI shut down Silk Road and arrested Ulbricht on Oct. 2, 2013. Silk Road, a dark Web black market that traded in illegal drugs, counterfeit IDs and computer hacking software, required its buyers and sellers to do business in bitcoin, an anonymous digital currency difficult to trace.
A federal jury in New York convicted Ulbricht last month on drug conspiracy charges. Ulbricht, who will undergo sentencing in May, was also the target of an investigation in Maryland. Force and Bridges worked on the Maryland investigation.
Prosecutors said Force, in addition to his official undercover identity as “Nob,” created several unauthorized online aliases, so he could conduct complex bitcoin transactions to steal from the government and Ulbricht.
In one transaction, Force, using his second alias, demanded Ulbricht pay him $250,000 in bitcoin not to disclose information to the government, officials said. Posing as a woman named Carla under the alias “French Maid,” Force offered to sell Ulbricht information about the government’s investigation in exchange for $100,000 worth of bitcoin, officials said.
Ulbricht paid the money, and Force deposited it into a personal account, IRS Special Agent Tigran Gambaryan wrote in an affidavit. Force converted some bitcoin to dollars and wired the money to his personal overseas bank account in Panama, the affidavit said.
Force also worked for and invested $110,000 in the California-based digital currency exchange company CoinMKT while still working for the DEA. The company featured Force in its pitches to venture capital investors as CoinMKT’s anti-money laundering and compliance officer.
Emails between Force and CoinMKT’s chief executive indicated Force planned to stay at the DEA until the bitcoin exchange “hits it ‘big time.’ ”
Prosecutors said Force used his position at the DEA to steal money from accounts at CoinMKT. In one instance, Force directed CoinMKT to freeze a customer account, officials said. He then seized 223 bitcoins worth about $297,000 and transferred them to his personal Bitstamp digital currency account, court papers said. He then exchanged the bitcoins for dollars and put the money in his personal checking account, court papers said.