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Two Federal Agents in Silk Road Case Face Fraud Charges
- ipsin 12y agoIt will be interesting to see how they allegedly got the bitcoins, since I expect that will come out in the indictment and trial.
- Phlarp 12y agoPerhaps they pretended to be an extortionist and a hitman in order to convince DPR to send coins to their address in exchange for a "hit" on the "extortionist".
- gwern 12y agoThe complaint already says how: after busting Chronicpain in a CD, he turned over his SR1 moderator/admin account, and then Force used the mod/admin ability to reset passwords & PINs to log into big vendors' accounts and transfer their balance out of SR1 to his own Bitcoin account.
- ipsin 12y agoThanks, I had missed any links to the indictment in the original story, but it's definitely a worthwhile read. After knowing the background, I don't actually mind the redaction of those details from the evidence in Ulbricht's trial.
- deftnerd 12y agoI wonder if the government buried this until after the Ulbricht trial was over. The fact that two of the investigators were corrupt and stealing funds could have derailed the case.
- ipsin 12y agoThat hadn't even occurred to me. Is that something that prosecutors can even do? It seems legally and ethically suspect, but prosecutors seem to be unaccountable when it comes to that sort of tactic. I can imagine the prosecutors pretending it's not material because it's an "ongoing investigation" (that's purposely paused until the trial finishes), but it would be very interesting to know the complete timeline and see how it meshes with that of the Ulbricht trial.
- nateabele 12y agoIf the agents are convicted, you'd think Ulbricht's lawyer could appeal to have his conviction overturned...
- fweespeech 12y agoExcept these agents were a separate investigation and their evidence wasn't included in the trial.
- ianstallings 12y agoIt's relevant though. Missing information is just as important as provided information when it comes to the law. That's what they mean when they say the whole truth.
- rosser 12y agoOnly if the missing evidence is exculpatory.
- fweespeech 12y agoIf Officer A arrests you for a DUI and speeding on Day X...the actions of Officer B on Day Y for a separate DUI case is irrelevant. The "missing information" as you put it, is related to a murder-for-hire trial that is separate from the Ulbricht-ran-Silk-Road trial.
- cubano 12y ago
- emodendroket 12y agoWhat difference would it have made?
- matart 12y agoI would assume just media wise
- vaadu 12y agoAny evidence these 2 agents provided would be regarded as unreliable.
- tedunangst 12y agoWhat evidence did these 2 agents provide?
- gwern 12y agoFor one thing, the entire Maryland hitman case collapses if you can't use anything Force touched, because he ran it from start to finish as Nob.
- tedunangst 12y agoNo doubt the case they were working is probably tanked, but my question was meant to be pointed more towards the trial that's already happened, where evidence has been presented (past tense).
- CPLX 12y agoIt would cast a shadow of doubt over any and all evidence that these now discredited agents were involved in collecting and any testimony they made or influenced.
- john_b 12y agoIANAL, so hopefully someone more knowledgeable will chime in, but if you can show in court that a witness has comitted a crime you can show that they are not trustworthy and essentially impeach their testimony. There was so much evidence against Ulbricht that it probably wouldn't have changed the outcome, but the fact that this is only now being brought to light is very suspicious.
- higherpurpose 12y agoUlbricht can still appeal on this basis, no?
- fweespeech 12y agoThe Ulbricht case that went to trial was a different investigative team. [e.g. These agents were not involved] > The charges stem from the agents’ role in one of the federal investigations into Silk Road; a separate Manhattan-based investigation ultimately led to the filing of charges against the website’s founder, Ross W. Ulbricht, who was convicted last month on numerous counts. The website was also shut down by the authorities. > The Baltimore investigation resulted in an indictment of Mr. Ulbricht on a charge of murder for hire, but that case has remained pending and the evidence in support of it was kept out of the New York trial, apparently because of the investigation into the agents. However, I'm pretty sure the "murder for hire" trial is going to die quietly because of these agents.
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- fiatmoney 12y agoYes, it's unheard of for agents in a "different investigative team" (that, BTW, happens to be involved in shaking down suspects) to, say, provide illegally obtained evidence to their coworkers. The government is very strict about tracking the source of evidence so it can be turned over to the defense; otherwise it'd be a clear Brady violation. They could face as much as a light chastizement from a federal judge! http://www.abajournal.com/news/article/epidemic_of_brady_violations_decried_in_kozinski_opinion http://www.abajournal.com/news/article/epidemic_of_brady_vio...
- tptacek 12y agoIt turns out one of them was probably on Ulbricht's payroll: http://www.wired.com/2015/03/dea-agent-charged-acting-paid-mole-silk-road/ http://www.wired.com/2015/03/dea-agent-charged-acting-paid-m...
- toomuchtodo 12y agoWow. How could Ulbricht's attorney not appeal after this is made public?
- tptacek 12y agoYou think evidence that Ulbricht bribed someone to get intelligence on another DEA investigation is going to help him? I mean: they'll probably appeal no matter what, because what do they have to lose at this point.
- toomuchtodo 12y ago> You think evidence that Ulbricht bribed someone to get intelligence on another DEA investigation is going to help him? Not at all! > I mean: they'll probably appeal no matter what, because what do they have to lose at this point. Exactly this. Sorry I wasn't clear.
- revelation 12y agoIt's hardly bribery if the other party isn't acting in an official capacity. Fake authority has probably been a ploy of scammers and fraudsters since they existed. On the other hand, I'm sure theres a major problem for the government here if the guy signing seizures is doing so for his own illicit gain.
- jacquesm 12y ago> It's hardly bribery if the other party isn't acting in an official capacity. You can't be an officer in a case and not be acting in an official capacity at the same time. It's not like you go home at 17:00 sharp and then turn around to the people that you just spent time with as an official and pretend that didn't happen.
- gwern 12y agoThis was pretty deliberately buried, yes. I've been going through the evidence exhibits for the trial, and in retrospect, knowing what I know now, it's remarkable how carefully chosen exhibits are to hide all the traces on Ulbricht's end: for example, due to redaction failures, we know all the mentions of French Maid were scrubbed by prosecution; his journal is carefully chosen to start after Chronicpain was busted and used to rob SR1 accounts; the failed extortion attempt using the name 'A.A.' is partially redacted so it sounds like an isolated incident; and so on.
- tedunangst 12y agoWhat do you mean by buried? I think it's fairly obvious why the prosecutor would choose not to present this evidence if the case could be made without it. The prosecution isn't required to present everything at trial. I guess there's the question of whether the prosecution provided it to the defense or not, though I'm not sure how that would help. Ulbricht was sticking with the claim he wasn't running the site at the time, no? Seems irrelevant that some bad agents stole from the site he wasn't running.
- drzaiusapelord 12y agoBitcoin seems to make everyone crazy. I guess if you're prone to theft and dishonesty, it must be tough to look at a folder on some confiscated PC with files worth tens or hundreds of thousands of dollars and not take them. Seems like everyday police corruption, like how drug dealers busted with thousands of dollars suddenly have a evidence locker inventory with zero cash. I'm glad the system is working, at least to the point of catching these guys. You can't stop human nature, but at least you can punish the guilty.
- rayiner 12y agoI think it's a look into what he world looks like without social norms. The folks stealing bitcoins probably would never take $200 out of grandma's purse when she wasn't looking. Society has acculturated people to understand that's bad. But butcoin is novel, and doesn't have social norms surrounding it. It doesn't feel the same as taking money out of a purse.
- geoelectric 12y agoI would argue that many of the recently publicized actions of the government in general provide a look into what the world looks like without social norms.
- secant 12y agoAs the guy above said, I don't think it's particularly novel about Bitcoin, rather that the temptation of something that has a large amount of value will always make a few give in. These guys may not have stolen from a grandma, but would feel less inhibited stealing from what they ostensibly view as criminal's money.
- fixxer 12y agoI think your theory might be a tad overly optimistic with regards to the character of these officers. I think the amount of infrastructure they set up to execute the crime indicates complete understanding of the law. That is very different from committing a crime because one's adherence to social norms makes them think it isn't a "real crime".
- jamisteven 12y agoSO they skimmed a tad off top instead of handing it all over to uncle fucking sam, who cares. Greedy ass gov. Like they would have put that money to good used anyways, right.
- refurb 12y agoThe complaint is signed by Tigran Gambaryan, a special agent with the Internal Revenue Service It's been said before... you can do a lot to harm the gov't, but never, never piss off the IRS. Uncle Sam doesn't take kindly to messing with his cash.
- eli 12y agoMore likely is that it's far easier to prove that they didn't pay any taxes on the money than it is to prove they never should have received it.
- mcguire 12y ago"You seem to have a crap-ton of money with no clear provenance. That's smelling like tax evasion. "Oh, you stole it."
- danielweber 12y agoThere's a line on tax returns for illegally gained money. I always wonder if anyone fills it in and what the result is.
- niche 12y agoThis is an excellent demonstration of the value and transparency the blockchain provides.
- fiatmoney 12y agoBasically the same MO as in drug cases - part of the briefcase-o'-cash (or drugs, or what have you) goes into evidence, part goes into the agents' pockets.
- CPLX 12y agoRead the complaint, it's so much worse than that: http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf http://www.justice.gov/sites/default/files/opa/press-release...
- edward 12y agohttp://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf http://www.justice.gov/sites/default/files/opa/press-release...
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- KhalilK 12y agoWhat a terrific example of how Bitcoin's transparency is one of its greatest assets.
- shit_parade 12y agoHow many bad apples until people declare the whole batch spoiled?
- chasing 12y agohttp://rationalwiki.org/wiki/Overgeneralization http://rationalwiki.org/wiki/Overgeneralization
- justathrow2k 12y agoWell,it sounds like you've already made up your mind, so at what number did you reach the breaking point and made the decision that the entirety of our law enforcement system was spoiled?
- shit_parade 12y agoWhen the Senate declared we torture people and the president decided not to prosecute.
- justathrow2k 11y agoWell, there's your answer.
- tedunangst 12y agoIt requires a sample of about 72 bad apples and 0 good apples to be 95% confident that at least 95% of the batch is spoiled.
- peterwwillis 12y agoHave you ever picked apples?
- CPLX 12y agoI encourage everyone with interest in the overall story to actually read the complaint. It's astonishing. It appears that these two Federal agents were doing far, far more than just grabbing some excess bitcoins that were lying around and they figured nobody would miss. It reads more like a purposeful organized crime effort, involving setting up dummy shell companies, forging letters from the government, being involved in pitching investments in shady offshore bitcoin startups, etc. They also allege that these agents were turning around and selling insider info on the investigation to DPR in exchange for hundreds of thousands of dollars in bitcoin. They allege an agent just basically strong armed some random guy ("RP") who was a customer of CoinMKT and stole $297,000 or so from him, using the Federal Government search and seizure docs to do so but then just transferring the money into his personal checking account. The agent was doing shady transactions via Venmo and got flagged and had his account suspended, so he contacted them as a DEA agent to get the account reinstated. When they got suspicious (because he had been using his personal email address before going "official") and contacted his supervisors he tried to start a criminal investigation of Venmo as "a suspicious money remitter" through his office. They allege that the other agent was responsible for the wholesale theft of bitcoin from Silk Road and its various vendors, after they managed to apprehend someone ("CG") who was an administrator at Silk Road. This agent signed Federal warrants seizing the assets of Mt Gox, meanwhile transferring millions of dollars in bitcoin into his own account. Reading this is thoroughly jaw-dropping: http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf http://www.justice.gov/sites/default/files/opa/press-release...
- CodeWriter23 12y agoIndeed. It appears Force's fatal flaw was trusting an IRS Agent to help him out of a situation.
- Zigurd 12y agoGuess what his business he is in now.
- modeless 12y ago> there is some implication that these agents may have been responsible for theft of bitcoin not only from Silk Road, but from Mt Gox as well I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. They did actually then steal from Mt. Gox, but it was "legal". They accused Mt. Gox of operating illegally and seized their US bank accounts. That happened a long time before Mt. Gox actually collapsed and is separate from the bitcoin theft that brought them down. This whole thing reads like a conspiracy theory dreamed up by radical libertarians. If they really are out to get you, does that mean you're not paranoid?
- deleted 12y ago[deleted]
- JupiterMoon 12y agoSo much for bitcoin being anonymous... (Yes I know it can be anonymous if one is careful but as it is commonly used it is not and this needs to be remembered).
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- mherdeg 12y agoI have often thought that Aaron Greenspan's attitude towards California money transmission law was a little aggressive, http://www.aarongreenspan.com/writing/20141022/the-common-sense-approach-to-offsetting-money-transmission-risk/ http://www.aarongreenspan.com/writing/20141022/the-common-se... , like, this guy is ranting about obscure laws and there is no way that the government would really abuse this legislation to shut down reasonable businesses. Then, in this complaint, I read ""On March 4, 2014, FORCE asked one of his co-case agents on the Baltimore Silk Road Task Force to run a query in a law enforcement database for Venmo, saying that he wanted to collaborate 'on a suspicious money remitter, Venmo Inc. Venmo has since registered with FinCEN, but I want to know if they have state money license remitting licenses in California and New York. Can you check? If not, I want to seize their bank accounts (need to identify them) a la BRIDGES and [M.M.'s] seizure warrants for Mt. Gox."" Wow. Nope. Aaron Greenspan is exactly right about the effects of this legislative mess.
- thinkcomp 12y agoThanks. Glad someone noticed, though aggressive overuse of 18 U.S.C. § 1960 at the federal level is hardly the biggest problem... See page 15: http://www.aarongreenspan.com/writing/20131118.hsgacstatement.pdf http://www.aarongreenspan.com/writing/20131118.hsgacstatemen... The real issues are at the state level, but as you can see, it's all intertwined.
- granfalloon 12y agoNow that blockchain analysis tools are getting better, I wonder if we'll be seeing more and more criminal activity exposed. For example, someone linked to this wallet/transaction in a reddit thread, which appears to show one of the $100k payoffs: http://www.walletexplorer.com/wallet/08363b86122e340c http://www.walletexplorer.com/wallet/08363b86122e340c Even just six months ago it would have been hard piece that information together, but Wallet Explorer makes it clear as day.
- lenlorijn 12y agoSo we're just going to ignore the rather awesome fact that there was "Special Agent Force" who was reckless and didn't abide by the rules, but got the criminals in the end? It sounds like a graphic novel or something.
- wavefunction 12y agoHe is a criminal himself, the worst kind: an official abusing their civil authority to enrich themselves and commit their crimes against many innocent people (Ulbricht not being one of those).