Federal Officials Stole Over $1M in BitCoin During Silk Road Investigation

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Federal officials who investigated the billion dollar online drug bazaar known as the Silk Road allegedly stole over a million dollars worth of bitcoins from the market during their time of the investigation. Which is probably not the best choice, seeing as your turning yourself into a black marketeer, the operation the Department of Justice ordered you take down.

In an official complaint lodged against the secret service agents last Wednesday, the Department of Justice says two federal officials stole bitcoins during their investigation of the Silk Road, the online black market for illicit goods and services. In the complaint gone public Monday, a Drug Enforcement Administration (DEA) official and an investigator for the Secret Service have been accused of stealing bitcoins from the Silk Road before turning them over to the government, where they later auctioned the coins off in lots.

Secret Service agent, Shaun Bridges, was a computer forensics expert assigned to investigate the Silk Road Founder. The founder who ran the site under the online alias Dread Pirate Roberts was exposed to allegedly be Ross William Ulbricht. Bridges is said to have allegedly stole over $800,000 worth of bitcoin from the marketplace. According to the complaint against Bridges, he kept a stash in the exchange labeled Mt. Gox, which was one of the worlds largest Tokyo-based bitcoin exchange markets that collapsed last year after the company lost track of millions of dollars worth of the virtual bitcoin currency.

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A DEA official, Carl Force, was assigned as “the lead undercover agent in communication” with the Silk Road founder, a role that gave him the power of extortion. Lodged in the complaint, Force used a series or private and faulty accounts where he told Ulbricht he would help bury evidence related to the case if Ulbricht paid him the sum of $250,000. The complaint cites another instance where Ulbricht allegedly paid Force $100,000 in bitcoins after Force, abusing one of his anonymous accounts, offered classified information related to the federal investigation.

“Force and Bridges abused their positions as federal agents and engaged in a scheme to defraud a variety of third-parties, the public, and the government, all for their own financial enrichment,” read the 50 page complaint lodged against the two secret service agents.

Steve Levin, the federal lawyer representing Bridges said he “maintains his innocence and will answer the charges at the appropriate time.”

It’s hard to miss the irony, the Silk Road has brought a mass investigation upon itself while the investigators have done the exact same. While the black market was shut down by the government, two officials aiding the shutdown were also criminals, stealing over $1 million worth of bitcoins.

The complaint notes just how hard it is for the government to stay atop digital criminal activity while technology is only becoming more and more complex. We think maybe government officials should stop believing they are above the law and such actions would not occur.

Photo via Caesar/Wikipedia [CC BY 3.0]

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Brandon Stosh is the founder and CEO of www.freedomhacker.net. Stosh is a cyber security researcher and professional consultant who strives to provide reliable news on cyber-security based topics.

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