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Federal Agents Investigating Bitcoin Money Laundering Extorted, Stole Over $1 Million In Bitcoin

Tyler Durden's picture




 

This is one of those sad times when The Onion realizes it has badly, and permanently, missed its IPO window.

Just released from the Department of Justice

Former Federal Agents Charged With Bitcoin Money Laundering and Wire Fraud

Agents Were Part of Baltimore’s Silk Road Task Force

Two former federal agents have been charged with wire fraud, money laundering and related offenses for stealing digital currency during their investigation of the Silk Road, an underground black market that allowed users to conduct illegal transactions over the Internet.  The charges are contained in a federal criminal complaint issued on March 25, 2015, in the Northern District of California and unsealed today.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division, Special Agent in Charge José M. Martinez of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General Washington Field Office and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.

Carl M. Force, 46, of Baltimore, was a Special Agent with the Drug Enforcement Administration (DEA), and Shaun W. Bridges, 32, of Laurel, Maryland, was a Special Agent with the U.S. Secret Service (USSS).  Both were assigned to the Baltimore Silk Road Task Force, which investigated illegal activity in the Silk Road marketplace.  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 was a DEA agent assigned to investigate the Silk Road marketplace.  During the investigation, Force engaged in certain authorized undercover  operations by, among other things, communicating online with “Dread Pirate Roberts” (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.  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.  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 today and will appear before Magistrate Judge Maria-Elena James of the Northern District of California at 9:30 a.m. PST this morning.  Force was arrested on Friday, March 27, 2015, in Baltimore and will appear before Magistrate Judge Timothy J. Sullivan of the District of Maryland at 2:30 p.m. EST today.

The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington D.C.  The Treasury Department’s Financial Crimes Enforcement Network also provided assistance with the investigation of this case.  The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section.

* * * * *

Some additional, and simply epic in their stupidity details from the criminal complaint:

The full criminal complaint can be found here.

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Mon, 03/30/2015 - 13:02 | 5942345 venturen
venturen's picture

That is nothing there is an outfit that has printed over $4 Trillion counterfeit  bills....get over and arrest the people at the FED!

Mon, 03/30/2015 - 13:05 | 5942397 Tom Servo
Tom Servo's picture

Force, aka "fonestar"..... LMAO.... maybe he was also "Dread Pirate Fonestar" instead...

 

 

Mon, 03/30/2015 - 13:13 | 5942437 Payne
Payne's picture

The FEDS do not actually investigate so who dialed these guys out or how did the FEDs accidentally find out and were forced to do their jobs ?

Mon, 03/30/2015 - 13:22 | 5942486 summerof71
Mon, 03/30/2015 - 14:18 | 5942729 MillionDollarBogus_
MillionDollarBogus_'s picture

Irritating when folks pretend to be someone else...

Mon, 03/30/2015 - 14:47 | 5942860 Ignatius
Ignatius's picture

Crime and law enforcement is a distinction without a difference.

Mon, 03/30/2015 - 15:06 | 5942943 TruthInSunshine
TruthInSunshine's picture

Fonestar is getting pounded in the ass as we discuss this.

Mon, 03/30/2015 - 15:31 | 5943051 Bindar Dundat
Bindar Dundat's picture

I told everyone that you couldn't trust bitcoin er...the feds er...the banks..er..fuck you just can't trust anyone -- buy gold asap

Mon, 03/30/2015 - 23:51 | 5944474 NidStyles
NidStyles's picture

BITCOIN IS SO SAFE AND SECURE!!!

 

Suckerz.

Tue, 03/31/2015 - 00:00 | 5944485 RU-GAY2
RU-GAY2's picture

Yes it is, never had any stolen.  Had my debit card hacked over 5 times.

Tue, 03/31/2015 - 04:06 | 5944714 NidStyles
NidStyles's picture

I thought you guys compared this to gold....

Mon, 03/30/2015 - 17:05 | 5943437 RU-GAY2
RU-GAY2's picture

How do you figure that moron?

Mon, 03/30/2015 - 23:54 | 5944477 NidStyles
NidStyles's picture

It's ok Foneystar, we won't tell anyone your secret. ;-)

Mon, 03/30/2015 - 15:25 | 5943028 logicalman
logicalman's picture

I thought BitCoin was supposed to be anonymous.

Mon, 03/30/2015 - 15:43 | 5943112 commander gruze?
commander gruze?'s picture

You were wrong then. Bitcoin is pseudonymous. If you want anonymity you need to use bitcoin tumbler.

Tue, 03/31/2015 - 06:58 | 5944812 LikeyMikey
LikeyMikey's picture

how does bitcoin tumbler bypass the bank accounts to get the money in and out of the bitcoin exchange?  Doesn't that defeat the purpose?

Mon, 03/30/2015 - 13:46 | 5942471 smlbizman
smlbizman's picture

remember folks...like that...folks....a judge recently ruled that law enforcement does not have to know the laws.

http://www.policemag.com/channel/patrol/news/2014/12/16/scotus-rules-evi...

so they will plead "what" and be good....

Mon, 03/30/2015 - 13:50 | 5942616 LasVegasDave
LasVegasDave's picture

what was the old punishment for betraying your oath as a public servant?

cut off your nose, put you in a sack with a wolverine and toss you in the river?

something like that....

Mon, 03/30/2015 - 20:05 | 5943923 Slomotrainwreck
Slomotrainwreck's picture

That bastard, $500k of that was mine!

Tue, 03/31/2015 - 06:40 | 5944796 NoPension
NoPension's picture

2 years off with pay while they decide if you did something wrong.

Mon, 03/30/2015 - 23:32 | 5944441 runswithscissors
runswithscissors's picture

"Dread Butt-Pirate Fonestar" instead

 

Mon, 03/30/2015 - 14:30 | 5942768 TheReplacement
TheReplacement's picture

But, but, bitcoin is so secure TPTB could never trace you and your activities... it's a protocol and stuff.

LOLOLOLOL

Mon, 03/30/2015 - 14:37 | 5942800 USisCorrupt
USisCorrupt's picture

But, But, you are a FOOL, diversification is KEY, I own 10 Physical BitCoins and I am glad I do. If these Bozo's only knew how to purchase and hold things of value they would not be a FOOL !

 

I believe in REAL Wealth.

Mon, 03/30/2015 - 23:55 | 5944480 NidStyles
NidStyles's picture

So you own fake version of fake money?

Tue, 03/31/2015 - 02:09 | 5944637 shouldvekilledthem
shouldvekilledthem's picture

Retard.

Mon, 03/30/2015 - 15:02 | 5942928 pcrs
pcrs's picture

Reading the complaint, it could very well be that DPR gave them the hint. He passed 100k$ in bitcoin to french made for information. He could probably remember that in jail.

Mon, 03/30/2015 - 17:02 | 5943428 junction
junction's picture

Agents Force and Bridges (even their names sound phoney) must learn to share.  AG Eric Holder is retiring soon and he expects his cut.  Others in the Silk Road task force knew enough to funnel the bitcoin rakeoff upstream. 

Tue, 03/31/2015 - 00:13 | 5944501 blowing winter
blowing winter's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com

Tue, 03/31/2015 - 00:56 | 5944576 glenlloyd
glenlloyd's picture

If I could quintuple down arrow your post I would....

Tue, 03/31/2015 - 09:47 | 5945118 Grinder74
Grinder74's picture

Why does this thing still have an account on ZH?

Mon, 03/30/2015 - 13:01 | 5942361 SumTing Wong
SumTing Wong's picture

So, now we know why there was a shooting at Ft. Meade??? These defendants are or were in Maryland.

Mon, 03/30/2015 - 13:24 | 5942494 graftvshost
graftvshost's picture

And it's reported that the 2 men were dressed as women - I bet one of them was in a French Maid uniform...

Mon, 03/30/2015 - 13:33 | 5942507 smlbizman
smlbizman's picture

that is why u must vote for owe malley....he has the experience needed to be prs-o-dent....and i knew drudge was not as presented..like a rebel sorta....but with owemalley being on it everyday...drudge is more own than i even realized....and that is coming from a guy that buys his tin foil from costco....and please dont be harsh on ur judgement if possible, but i am right in the middle of a hypo attack...some will know first hand what i mean, others will know what i mean but have no actuall experience and others will be wtf is he talking about....

Mon, 03/30/2015 - 13:03 | 5942378 Winston Churchill
Winston Churchill's picture

Untraceable bitcoin ?

Pull the other leg, it has bells on.

Mon, 03/30/2015 - 13:07 | 5942406 KnuckleDragger-X
KnuckleDragger-X's picture

Yep, that's marketing but the only mistake was they were the wrong acronym. If it had been the IRS it would've been completely alright and the number would be a lot bigger....

Mon, 03/30/2015 - 13:07 | 5942409 BustainMovealota
BustainMovealota's picture

No, not untraceable.   There is a hash code which is difficult to trace, but not impossible.  

Mon, 03/30/2015 - 13:25 | 5942500 Bay of Pigs
Bay of Pigs's picture

That's not what the Fonestar Brigade says...

Mon, 03/30/2015 - 13:33 | 5942529 agent default
agent default's picture

The fonestar brigade is either mentally retarded or on the NSA payroll. Either way to hell with shitcoin already.

Mon, 03/30/2015 - 14:17 | 5942720 commander gruze?
commander gruze?'s picture

Fonestar is doing bitcoin a great disservice claiming it's anonymous. It takes some effort to make it anonymous. Rather, default state is that it's transparent, and so was agent's operations.

Mon, 03/30/2015 - 17:07 | 5943445 RU-GAY2
RU-GAY2's picture

When has fonestar ever claimed that Bitcoin is anonymous?  Anonymity is a personal preference and does not pertain to the protocol in itself!

Mon, 03/30/2015 - 13:50 | 5942613 nmewn
nmewn's picture

Agent Satoshi, that kinda has a nice ring to it.

"Pssst, hey kid, yeah you, over heya. Could I interest you in some duji? You can pay with the BitShit, no one will ever know."

Mon, 03/30/2015 - 14:25 | 5942753 commander gruze?
commander gruze?'s picture

Sure, just run it through tumbler and we have a deal.

Mon, 03/30/2015 - 23:42 | 5944466 willwork4food
willwork4food's picture

Who has a name like "FORCE"?  "Hello, I'm Carl Force..glad to meet you."

Tue, 03/31/2015 - 08:15 | 5944904 Arnold
Mon, 03/30/2015 - 13:03 | 5942380 buzzsaw99
buzzsaw99's picture

not surprised at all. the doj is a criminal enterprise and protection racket.

Mon, 03/30/2015 - 13:04 | 5942394 Doubleguns
Doubleguns's picture

He must have froze the assets of one in the protected class. Oops that will cost ya. 

Mon, 03/30/2015 - 13:23 | 5942477 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

No, he just witheld the loot from his boss. Everyone in the mafia knows you give the boss a cut.

Mon, 03/30/2015 - 13:37 | 5942550 tarsubil
tarsubil's picture

It was no longer profitable or convenient to keep him around. Exactly like the mafia.

Mon, 03/30/2015 - 15:20 | 5943001 mtl4
mtl4's picture

Probably froze some senator's funds without knowing it.........ahhh, the war on poverty/drugs/terrorism continues.

Mon, 03/30/2015 - 13:04 | 5942387 BustainMovealota
BustainMovealota's picture

"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 "

Fairly easy paper trail right there.  His Mt. Gox account linked to him,  His investment account.  His investment account wasn't tied to Mt.Gox, so there will be a middle man to tie it together.  Should be open and shut case.

What a dumbass, there are better ways to move money, he should of known better since that was part of his job.

Bob Dylan once said,  "A man must be honest to live outside the law"

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