Inside Job! Former law enforcers helped themselves to Bitcoins during Silk Road probe

It is often assumed that the Police maintains a close relationship with criminals in order to ensure that they know what to look for and how to catch them in the act.

Sometimes, however, that relationship can be too close.

For 46 year old former Drug Enforcement Administration (DEA) agent Carl Force, and 32 year old former Secret Service agent Shaun Bridges, the transgression from law enforcer to felon may well have taken place.

Mr. Force allegedly used his DEA credentials to trick a firm into diverting digital currency to an account he controlled.

The two former Federal agents have been accused of stealing Bitcoins during their investigation into the activities of now defunct anonymous marketplace Silk Road, which was closed down and seized by the US government due to its facilitation of the sale of illicit goods.

Since its closure, the US Marshal Office has been conducting auctions in order to sell the seized digital currency.

Both agents were members of a Silk Road Task Force operating out of Baltimore, Maryland, but as detailed in a report by the Wall Street Journal is understood that they were not collaborating with each other in order to steal Bitcoin, according to the criminal complaint detailing the charges.

Both agents allegedly attempted to take steps to cover their tracks once they learned authorities in San Francisco were probing the Baltimore Silk Road Task Force. They each resigned after they learned they were under investigation. Part of the evidence against them appears to have been derived from a computer belonging to Mr. Ulbricht that was seized during his arrest.

Mr. Force allegedly created a fake, unauthorized online persona called French Maid and offered to sell Dread Pirate Roberts information about the federal investigation in exchange for about $100,000 of bitcoin.

Mr. Force, who also was doing authorized undercover work for the DEA and posing as a supposed drug dealer named Nob, also offered to sell Silk Road operator Ross Ulbricht, AKA Dread Pirate Roberts, information he claimed to be purchasing from a corrupt Justice Department employee. In both cases, Mr. Force allegedly pocketed the money that he was paid for the information.

Mr. Bridges, meanwhile, allegedly used credentials taken from a Silk Road administrator who had been arrested to steal bitcoins from the site. He allegedly transferred $820,000 to his personal account, according to the complaint.

Mr. Bridges appeared in federal court in San Francisco on Monday and was released on a $500,000 bond.

“Mr. Bridges had an unblemished career in law enforcement for several years,” said his attorney, Steve Levin. “He maintains his innocence and will fight the charges at the appropriate time.”

Mr. Force allegedly used his DEA credentials to trick a firm into diverting digital currency to an account he controlled.

While working as a DEA agent investigating digital currency, Mr. Force moonlighted as a sort of compliance officer for digital currency-exchange firm CoinMKT, in which he had allegedly invested $110,000.

In February 2014, CoinMKT flagged the account of a user, identified in court papers only as R.P., for suspicious transactions. Mr. Force suspended the account and had a DEA analyst check R.P.’s criminal history but turned up little suspicious information.

Despite learning that a technical glitch had caused the suspicious transactions, Mr. Force told CoinMKT to seize the account, which contained more than $300,000 in cash and virtual currencies. Using his DEA email, Mr. Force allegedly told the firm to transfer the money to what it thought was a DEA account. But authorities say the money went instead to a personal account controlled by Mr. Force. Not long after the seizure, he started a firm aimed at investing in virtual currency.

Mind how you go, as they say….

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