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Silk Road Investigators Charged With Stealing Bitcoin
itwbennett writes Two former U.S. government agents face charges related to stealing hundreds of thousands of dollars worth of bitcoin while assisting with an investigation of the Silk Road underground online marketplace, with one accused of using a fake online persona to extort money from operators of the site. Facing charges of wire fraud and money laundering are Carl Force, 46, of Baltimore, a former special agent with the U.S. Drug Enforcement Agency, and Shaun Bridges, 32, of Laurel, Maryland, a former special agent with the U.S. Secret Service. Both served on the Baltimore Silk Road Task Force, which investigated illegal activity on the Silk Road website, the Department of Justice said Monday in a press release.
How convenient that misconduct of the investigators which would have a bearing on admissibility of evidence in Ulbrich criminal trial was not revealed until after his trial was over. He probably does have a few days until his 60 day deadline to appeal lapses though.
It's not very reassuring when the investigators in such a case are themselves blatantly breaking the law to serve themselves. It makes you wonder about the other government agencies and employees looking at things such as all the mass collected survelance materials and wondering how they can use their position to their own personal benefit. Contrary of course to what the government says will never happen. I don't feel like there is much integrity. Having said that at least they got caught even though after the fact.
Those who can, do. Those who cannot, sue.
How can it be hard to trace if they were caught and all their transactions were linked back to them?
I mean these guys evidence/affidavids would have been shquashed and unidminssible if this came out during/before the trial. Now this is corruption at its best. Les see if we can find out if the prosecutors knew about this dring the trial.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
You're an idiot.
All transactions on the Bitcoin block chain are public.
It is fucking trivial to trace X Bitcoins going from Wallet A to Wallets X,Y,Z to Wallets B1,B2,B3, C1,C2,C3, D1,D2,D3, etc. A 4 year old could do it.
Identifying the owner of a wallet is fucking easy too. Anytime someone converts it to fiat currency they have to use some sort of exchange or deal with an individual willing to buy Bitcoin for cash. Every major exchange now collects and verifies personal information. Every major exchange has been tapped by the authorities.
I had a similiar thought. This kinda throws a wrench in the idea that BTC will lead to tax avoidance becoming so common the fed gives up and abandons income tax because it is SO easy to hide what you are doing.
These people were not exactly noobs, so people can not even claim that it was only because they did not know what they were doing.
These two were tied up in the chain of evidence that led to his conviction, so depending on what gets tossed he has a chance here. Now he did admit that at one time he was DPR and that he had resumed work under the alias so he's probably not going to get everything overturned. But his defense was that someone else associated possibly with MTGOX was the mastermind framing him more recently.
So what's intriguing here is that one of the investigators was doing some shenanigams with MTGOX accounts and was involved in seizing MTGOX assets. Since MT GOX started having liquidity problems right during this investigation of Silk road, it really makes you wonder if this is where some of those missing assets went.
Furthermore the agents appear to have done things as their shenanigans came to light to obfuscate the trail back to them. This is not too far afield from ulricht's claim that someone was framing him, asking him to step in as DPR, and putting keys on his computer.
It actually seems it's not far fetched to imagine Ulricht was telling the truth about having relinquished DPR that someone suddenly invited him back into the game as the FBI closed in. Perhaps there's some grains of truth in there somewhere. e.g. maybe one of the agents did add his bitcoin keys to Urichts computers.
Given those sorts of conjectures it seems very reasonable he should get a new trial. He's guilty by his own admission, but maybe not guilty of everything he's charged with.
Some drink at the fountain of knowledge. Others just gargle.
Pretty darn hard to trace, and very usable as alternative currency.
Said the two investigators just before they got perpwalked in handcuffs..
People cannot be serious. BTC is very traceable, it's in the blooming design. What do people think the block chains are for? They are a complete history of the coin. Yea, you might need a map of what wallet matches with what person, but once you can tie someone to a transaction, the mapping becomes obvious for the rest of that wallet's coins. After that it's a game of connect the dots by going back though all the publicly known block chains... It's a blooming PUBLIC transaction log, easy to trace, publicly published to the miners every time a coin changes hands. It's like a bank published every transaction processed every day by account number. Yea you might not know who is account # 2011025, but you know they transferred $1 Million to that offshore account.... Eventually you can figure out who that is.
"File to fit, pound to insert, paint to match" - Aircraft Maintenance 101
It's not impossible to trace, but it's not easy either. It's not like every bitcoin wallet corresponds to exactly one person. A person can have as many bitcoin wallets as they want. You don't need to transfer $1 million from 1 single wallet to another single wallet in order to transfer $1 million. Secondly, proving someone is the owner of a given bitcoin wallet is much harder to do than to prove a person is the owner of a bank account. You might be able to coax a banker into revealing the owner of an account. It's much harder to prove that someone knows the answer to a math problem. And in order to freeze those funds you also need to know the answer to that math problem. You pretty much have to catch them in a library with their laptop and bitcoin accounts open.
It is possible to correlate bitcoin wallets with people given enough resources, especially if they are careless. But it's still a lot safer for criminals than any sort of traditional bank account.
Forget these two guys and their bitcoin score, how much CASH walks away during drug investigations? How much is outright stolen, how much is extorted? How much is taken in product in lieu of cash?
This is one of the most pernicious aspects to drug criminalization, the huge potential for corruption by law enforcement.
And it's just another problem completely eliminated by legalization.
According to the indictment, part of how they were caught is that as part of laundering their proceeds, they tried to strongarm the payment processor Venmo, who had closed their accounts as part of automated fraud detection. Venmo was unhappy with being strongarmed, and sent a complaint to someone higher up at the agency. The agents then tried to suppress the complaint, and simultaneously retaliate against Venmo by trying to start an investigation. That attempted investigation pulled in the IRS, whose investigators thought a bunch of things looked suspicious, and dug up enough dirt to blow the whistle on the agents in this case.
So I guess in short, they pissed off both a payment company and the IRS.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
I think what this might go to show is that a lot of drug enforcement officers are corrupt and keep a lot of the money they find in drug busts. Unlike what otherwise happens with loose cash, bitcoin allowed their activity to be traced.
That, along with the fact that a lot of police don't want drugs legalized, kind of hints that they get a lot of revenue from drug busts, while funding the busts themselves with taxpayer money.