Two Federal Agents involved in the undercover operation to bust the Silk Road have been arrested for stealing money taken over the course of the Investigation. Arrested were DEA Agent Carl Mark Force IV and Secret Service Agent Shaun Bridges. Mister Force IV in particular is alleged to have stolen a number of Bitcoins from the Silk Road and taken possession of them personally instead of remanding them to Government custody as was expected of him as his theft occured in the course of his undercover work. Agents of the fiat system simply can not resist the allure of better money. Given that the investigating agents could not be trusted to not take Silk Road proceeds for their own use, the serious question of what other liberties were taken during the investigation remains.
Update: The full unsealed complaint is available here. Uncompressed images of the pages may be browsed here.
Daniel Krawisz has written some fantastic articles about the incentives for defection that Bitcoin creates in organizations, especially of a criminal nature. They are must-reads for people interested in this story :
http://nakamotoinstitute.org/mempool/bitcoins-rugged-individualism/
http://nakamotoinstitute.org/mempool/bitcoins-shroud-of-subtlety-and-allure/
http://nakamotoinstitute.org/mempool/the-fappening/
As Bitcoin's value proposition becomes clearer to government agents, we can expect more of these events to happen, though we will only ever hear about the defectors who get caught.
Makes you wonder what the "personal use" was. It would've had to have been something spectacular, otherwise moving coins from A –> B leaves plenty of room for "oops I entered the wrong address."
No wondering is required and the link to your blog isn't relevant to the instant case.
From the complaint:
In late January 2013, members of the Baltimore Silk Road Task Force, to include BRIDGES and FORCE, gained access to a Silk Road website administrator account as a result of the arrest of a former Silk Road employee. On January 25, 2013, the Silk Road website suffered a sizable theft of bitcoins, bitcoins which were moved into Mt. Gox.
According to records obtained from Fidelity, BRIDGES funded his Quantum Fidelity account exclusively with wire deposits from Mt. Gox in Japan. Specifically, between March 6, 2013 and May 7, 2013 BRIDGES' Quantum Fidelity account in the United States received nine wire transfer from Mt. Gox totaling approximately $820,000.
Also of interest, from the complaint:
FORCE used his official position as a DEA agent to illegally run criminal history checks on individuals for the benefit of a third-party digital currency exchange company, CoinMKT, in which FORCE had personally invested approximately $110,000 worth of bitcoin.
FORCE functioned as the de facto Chief Compliance Officer for CoinMKT all the while employed as a DEA agent, even allowing himself to be featured in CoinMKT's "pitch decks" to venture capital investors and allowing himself to be listed as CoinMKT's anti-money laundering and/or compliance officer in order to benefit CoinMKT
FORCE improperly directed CoinMKT to freeze one of its individual customer's accounts containing a large amount of digital currency, worth approximately $297,000, even though he lacked a sufficient legal basis on which to do so, and FORCE then illegally siezed those funds and transferred them into his own personal account.
1. You not seeing relevance =! lack of relevance. Who are you again ?
2. Force's actions were both spectacular and spectacularly stupid. He was smart enough to seize the moment yet dumb enough to botch the opportunity. So ya, he failed to qualify for the "otherwise" scenario because he was too cool to read logs. He's not the first.
1a. Pete…. What kind of argument is this? "Well, you're a stupidhead!" It's ok.. even a lord can be wrong sometimes :).
1b. Log reader (almost daily & >1 yr)
2. Ok, so we are in agreement.
1a. This is the "if you're not in my WoT, you don't have anything to say on the matter" argument. It undoubtedly trips a few fallacious wires, but it's an essential mechanism for surviving the morass of Internet muppets.
1a. That's definitely something. Wd.
2. Excellent.
No way!
Chapter 'FORCE’s Unlawful Seizure of R.P.’s Funds' seems quite nice
http://dpaste.com/3ET173R.txt
Nice find. I've backed up the dpaste locally here, because dpastes expire and this is too good for that.
I've completed OCR and proofread in full. http://dpaste.com/0SRTQ0G.txt
"The Silk Road Theft and BRIDGES' Fidelity Account" – this part is nice too.
Beautiful. I've backed this document up here. Very nice work.
Seeing how the guy was making ~20k a month from the Leviathan he was serving yet was more than willing to throw it away for not even three times that much, I'ma leave this here.
The beast doesn't know "priceless" has a meaning.