Former US agent stole bitcoins in Silk Road probe

  • Reuters, New York
  • Updated: Jun 24, 2015 06:06 IST

A former federal agent has agreed to plead guilty to stealing bitcoins during the government's investigation of Silk Road and secretly soliciting payment from the operator of the online black market for information on its probe.

Carl Force, a former US Drug Enforcement Administration agent, will plead guilty to charges of extortion, money laundering and obstruction of justice on July 1, according to papers filed on Monday in federal court in San Francisco.

The deal came after prosecutors last week reached a plea agreement with Shaun Bridges, a former Secret Service agent who was charged along with Force in March with stealing bitcoins, the web-based digital currency, during the investigation.

Neither Force's lawyer nor a spokesman for the U.S. Attorney's Office in San Francisco responded to requests for comment.

Silk Road operated for more than two years until it was shut down in October 2013, generating more than $214 million in sales of drugs and other illicit goods using bitcoins, prosecutors said.

Ross Ulbricht, Silk Road's creator who authorities say used the alias "Dread Pirate Roberts," was sentenced to life in prison in May after a federal jury in Manhattan found him guilty of several charges, including distributing drugs through the Internet.

Force and Bridges belonged to a Baltimore-based federal task force that investigated Silk Road. Force played a prominent role, communicating with Ulbricht while posing as a drug dealer named "Nob," prosecutors said.

According to a government document, Force, operating as "Nob," in August 2013 convinced Ulbricht to pay him $50,000 in bitcoins by pretending he had information on the investigation. While Force reported the discussion to the DEA, he falsely claimed no payment had been made but instead diverted the bitcoins to a personal account, prosecutors said.

Force, also without authorities' knowledge, used another online moniker, "French Maid," and offered Ulbricht information on the investigation for about $98,000 in bitcoins in September 2013, prosecutors said.

Prosecutors said that while working as a DEA agent, Force ordered that a customer's account be frozen in a digital currency exchange company in which he had invested. But the $297,000 in bitcoins in the account was never deposited in a DEA account, prosecutors said, and instead was transferred in April 2014 by Force into a personal account.

Prosecutors have said Bridges, the former Secret Service agent, meanwhile diverted over $800,000 in bitcoins to a personal account.

The case is US vs Bridges, US District Court, Northern District of California, No. 15-cr-319.

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