As Clare Wolfe put it: Let me see if I understand this. It’s okay for the government to blackmail, extort, threaten violence, and steal all the assets from Silk Road. But it’s wrong if individual government agents do it. No, no matter how I try, I can’t wrap my head around whatever principle they’re going by.
Two of the law enforcement agents involved in the tangled multi-agency investigation into the Silk Road have been charged by the Department of Justice for stealing hundreds of thousands of dollars (at the very least) in bitcoin. The criminal complaint against former DEA agent Carl Mark Force IV and former Secret Service agent Shaun Bridges alleges money laundering, wire fraud, theft of government property, and more. But more shockingly, it tells the story of a sprawling case tainted by an unbelievable web of corruption. A state’s witness took the fall for an agent’s theft, thus becoming the target for a murder-for-hire—a murder that was then faked by the same agent. The Silk Road case was compromised again and again as Force and Bridges allegedly took every opportunity to embezzle and steal money. With so much bitcoin on their hands, the two had to coax various bitcoin and payments companies to help convert their ill-gotten gains to dollars. When companies resisted, investigations were launched, subpoenas were issued, and civil forfeitures were sought in retaliation.
The investigation into Force and Bridges began around May 2014, nearly a year after the arrest of Ross Ulbricht. Ulbricht was convicted this February of operating the Silk Road marketplace under the moniker “the Dread Pirate Roberts.” The criminal complaint alleges that Force and Bridges not only managed to siphon off bitcoins into their personal accounts while conducting undercover operations on the Silk Road, but Force also adopted a series of different personas on the Silk Road that switched off between extorting Ulbricht/DPR and selling him information from inside the federal investigation. Under the handles “Nob” and “French Maid,” Force sold DPR information that he had supposedly acquired from a corrupt government agent, while under the handle “Death from Above,” he used information from inside the investigation to extort DPR for bitcoins.
Between 2012 and 2013, while Force was investigating the Silk Road, he deposited into his bank account about three times the amount of money he was making on his government salary. He also paid off the mortgage on his house, repaid a $22,000 government loan, wired $235,000 to an offshore account in Panama, and invested tens of thousands of dollars in real estate and stocks.
DPR Blamed Curtis Clark Green For Agent Bridges’s Theft
As for Shaun Bridges, he seems to have stolen about $820,000 from the Silk Road. Curtis Clark Green, a Silk Road employee, turned government witness in January 2013. As part of the deal, he handed over access to his Silk Road account. While Green was debriefing the Baltimore Silk Road Task Force on how to use administrative access through his account, the Silk Road suffered a massive theft of bitcoins, beginning in the afternoon and continuing into the night. Bridges had left the debriefing session early that day.
DPR traced the thefts to Curtis Clark Green’s Silk Road account. Believing Green to be the thief, he turned to Silk Road user Nob, who he thought was a drug dealer and hitman, and ordered a hit. Nob was, in reality, Carl Mark Force. He and Green faked Green’s death, and Bridges made “proof-of-death” photographs that were eventually sent to DPR.
Ross Ulbricht was charged with this murder-for-hire in Maryland. The case is still pending there.
As for the stolen bitcoins, they were transferred to Mt. Gox—a bitcoin exchange—in late January. In February, Bridges formed “Quantum International Investments, LLC,” and opened a bank account in Quantum’s name, which only ever received transfers from Mt. Gox. Between March and May, the Quantum account received nine wire transfers, approximately totaling $820,000.
Was Ross Ulbricht Deprived of Due Process?
Although the investigation into Force and Bridges began approximately nine months before Ulbricht’s trial, Ross Ulbricht’s defense team was kept unaware of it until about five weeks before the trial date, at which point prosecutors moved to keep the information sealed. Nothing about either Force or Bridges made it into the trial.
“The Government’s efforts to keep the Carl Force scandal out of the public eye at trial is in itself scandalous,” said Joshua Horowitz, one of Ulbricht’s defense attorneys. “The recently filed Complaint which names Carl Force as a defendant demonstrates that the Government’s investigation of Mr. Ulbricht lacked integrity, and was wholly and fatally compromised from the inside.”
Worse, says Horowitz, because facts about what Force and Bridges did weren’t allowed to come to light, Ulbricht never got the trial he was entitled to. “The Government used the ongoing grand jury investigation of Carl Force to deprive the jury from hearing critical facts about the corrupt nature of the Government’s investigation, consequently depriving Ross of due process and a fair trial.”
Ross Ulbricht at trial. Illustration by Susie Cagle.
“told you should have partnered with me!”
Early on in the Silk Road trial, Ulbricht’s defense dropped a bombshell while cross-examining the prosecution’s first witness, DHS agent Jared Der-Yeghiayan. Only a month before Ulbricht’s arrest, DHS had been actively investigating Mark Karpeles, CEO of the major bitcoin exchange Mt. Gox, as a possible suspect in their hunt for DPR. The Ulbricht defense presented Karpeles as an alternate suspect, going as far as to suggest that Karpeles had hacked Ulbricht’s laptop through a BitTorrent client and had placed files such as diaries, chat logs, and Silk Road accounting books in order to implicate him.
While some consider that theory to be rather outlandish, the fact remains that Mark Karpeles was not first chosen as an alternative suspect by the defense, but by federal law enforcement, who produced not one, but two sworn affidavits claiming to have probable cause to believe Karpeles was DPR. Karpeles has denied he is the Dread Pirate Roberts.
Even as DHS in Chicago pursued Karpeles as a possible Dread Pirate Roberts, other law enforcement in Baltimore were circling around Mt. Gox’s money-transmitting activities in the States. Shaun Bridges helped prepare the seizure warrants for Mt. Gox’s and Mark Karpeles’s U.S. bank accounts that were served on May 9, 2013. But before that, on April 8, 2013, Carl Force sent Mark Karpeles a LinkedIn request:
Communications between Carl Mark Force IV and Mark Karpeles, provided by Mark Karpeles.
Force followed up asking for Karpeles to help him sell 250 bitcoins. Given the allegations in the criminal complaint, it seems likely that these bitcoins were stolen. Karpeles never responded.
Force also e-mailed Karpeles, saying he was “exploring other work opportunities.”
Carl Mark Force IV attempting to get a job at Mt. Gox?
According to the criminal complaint, in November 2013, Force acted as a “de facto compliance officer” for bitcoin exchange company CoinMKT even while he was investigating “digital currency users and providers.” Force offered to help CoinMKT by running queries in criminal databases he had access to as a DEA agent. It is not clear whether Force had been seeking a similar work opportunity from Mt. Gox in April 2013.
But on May 15, 2013, a few days after Agent Shaun Bridges helped with the multi-million dollar civil asset forfeiture of the Mt. Gox accounts, Carl Force e-mailed Mark Karpeles again:
told you should have partnered with me!
Later, Karpeles sought a non-prosecution agreement with Baltimore prosecutors over Mt. Gox’s money-transmitting activities. As part of the agreement, he provided the name associated with a suspiciously large Mt. Gox wallet, which he believed to belong to the Dread Pirate Roberts. The name was J. Bradley.
“I did not know the name of Ross Ulbricht until it made the news,” Mark Karpeles said in an e-mail.
Retaliation Against Venmo
Law enforcement action against Dwolla and Mt. Gox in the summer of 2013 may have been orchestrated in retaliation for Karpeles’s non-responsiveness to Force’s overtures. When asked for comment, Karpeles was ambivalent, “I would guess it would be possible.”
However, the criminal complaint reveals that Force retaliated against Venmo after they resisted his attempts to bully them with an invalid subpoena. In February 2014, Force’s Venmo account was flagged for high-risk activity and was blocked. Force contacted Venmo from his personal e-mail account, identifying himself as a law enforcement agent (complete with an attachment of a picture of his badge), and demanded that his account be unblocked. As with Mt. Gox and CoinMKT, Force also attempted to network with Venmo, saying “he was interested in partnering with Venmo for employment opportunities.”
When Venmo did not unblock his account, Force served a subpoena on Venmo from his DOJ e-mail account. Venmo found his behavior suspicious. Insisting that the “request to unfreeze a personal account was not a proper use of an official government administrative subpoena,” Venmo notified Force’s superiors. Force ended up telling Venmo to “disregard the subpoena.”
The next week, Force asked one of his colleagues to run a query in a law enforcement database for Venmo, saying he wanted to investigate “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) á la BRIDGES and [M.M.’s] seizure warrants for Mt. Gox.
In the words of the criminal complaint: “FORCE appears to have been targeting Venmo for seizure after the company rebuffed his attempts to use a subpoena for his own personal matter.”
Trouble with Bitstamp
Venmo wasn’t the only payments company that flagged Force’s suspicious behavior. Force’s withdrawal activities with Bitstamp, a digital currency exchange, triggered repeated “Know Your Customer” checks. Each time, Force identified himself as a DEA agent. In late April 2014, Bitstamp asked Force why he was accessing his account through Tor, the anonymization protocol.
Force responded: “I utilize TOR for privacy. Don’t particularly want NSA looking over my shoulder :)”
The response was weird enough to prompt Bitstamp to block Force’s account.
A Few Bad Apples?
Are Carl Mark Force IV and Shaun Bridges the only crooked cops in the Silk Road investigation? While some of the most lurid parts of the investigation have been laid bare by the charges brought against Force and Bridges—namely, the faked murder-for-hire—questions remain. Unsavory behavior from the Baltimore task force was alluded to during the New York trial, but this was done without any reference to Force and Bridges, whose alleged crimes still remained under seal.
During the trial, the defense kept trying to introduce the character of “mr. wonderful,” a Baltimore DHS agent who coerced a Silk Road moderator into giving her account over to law enforcement. Although many of Force’s aliases are listed in the criminal complaint against him, none of them are “mr. wonderful.” (In any case, Force is a DEA agent, and “mr. wonderful” is DHS). Who is mr. wonderful? What exactly did he do?
Ross Ulbricht’s attorneys moved for a new trial on March 6, arguing that the government failed to provide exculpatory evidence within a reasonable timeframe. It is yet to be seen how these new developments will affect the motion for a new trial, or any appeals the defense will mount if that should fail.
Clarification: The U.S. Attorney’s Office in S.D.N.Y. has objected to this article, and asked that it further clarify that Judge Katherine B. Forrest ruled that these events outlined above were not exculpatory for Ross Ulbricht.
This includes evidence of how Agent Bridges had orchestrated the theft that led to the murder-for-hire that was then faked by Bridges and Force. This also includes facts about how Force adopted multiple Silk Road personas that were in contact with DPR, without the government knowing. Therefore, according to the judge, the compelled omission of these facts from the trial could not affect Ross Ulbricht’s case in any meaningful way.
The information in the new criminal complaint is not exactly the same information disclosed at that time. Obviously, the U.S. Attorney’s Office and Ross Ulbricht’s defense disagree on the potentially exculpatory nature of the criminal charges against Agents Bridges and Force. Here is an additional, previously unpublished quote from defense attorney Joshua Horowitz: “It is clear that Carl Force and others within the Government obtained access to administrative functions on Silk Road—all without the Government’s knowledge of precisely what they did with that access.”
More has been written on those specific legal issues here.
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