Federal agents accused of stealing $1M in online currency

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DEA, Secret Service Agents Accused Of Stealing Bitcoins

SAN FRANCISCO (AP) -- Two former federal agents are accused of using their positions and savvy computer skills to siphon more than $1 million in digital currency from the illegal black market Silk Road website while they and their agencies were operating an undercover investigation of the online drug bazaar.

The pair appears to have acted independently of one another while using sophisticated encryption software, inside knowledge of the investigation and complex offshore banking transfers of digital money called bitcoins and U.S. currency.

Former Drug Enforcement Administration agent Carl M. Force, 46, was arrested Friday in Baltimore and remained in custody Monday after being charged with wire fraud, theft of government property, money laundering and conflict of interest.

Former U.S. Secret Service special agent Shaun W. Bridges, 32, of Laurel, Maryland, appeared in federal court in San Francisco and remains free on $500,000 bond after being charged with wire fraud and money laundering.

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Federal agents accused of stealing $1M in online currency
Silk Road, the best-known underground marketplace for the trade of illegal drugs on the internet has been closed by the US authorities after an arrest of Ross William Ulbricht, alleged to be the owner of the site. The Silk Road website now shows seizure notice from the FBI, IRS and DEA. Thursday 3rd October 2013 © David Colbran/Alamy Live News
This artist rendering shows Ross William Ulbricht appearing in Federal Court in San Francisco on Friday, Oct. 4, 2013. A federal judge in San Francisco has postponed the bail hearing for Ulbricht who is being charged as the mastermind of Silk Road, an encrypted website where users could shop for drugs like heroin and LSD anonymously. (AP Photo/Vicki Behringer)
"This hidden site has been seized" is shown on the screenshot of the illegal internet retail platform "Silk Road 2.0" during a press conference at the Hesse Office of Criminal Investigations in Wiesbaden, Germany, 11 November 2014. German investigators have closed four retail platforms as part of "Operation Onymos." Photo: BORIS ROESSLER/dpa
This artist rendering shows Ross William Ulbricht, second from left, appearing in Federal Court with his public defender Brandon LeBlanc, left, in San Francisco on Friday, Oct. 4, 2013. U.S. Magistrate Judge Joseph Spero, right, postponed the bail hearing for Ulbricht who is being charged as the mastermind of Silk Road, an encrypted website where users could shop for drugs like heroin and LSD anonymously. (AP Photo/Vicki Behringer)
50 grams of Crystal Meth is shown on sale on the screenshot of the illegal internet retail platform "Silk Road 2.0" during a press conference at the Hesse Office of Criminal Investigations in Wiesbaden, Germany, 11 November 2014. German investigators have closed four retail platforms as part of "Operation Onymos." Photo: BORIS ROESSLER/dpa
Robert Faiella, center, a Florida Bitcoin exchanger, walks from the federal court house in New York Thursday, Sept. 4, 2014, after pleading guilty to federal charges that he helped smooth the way for drug transactions on the online marketplace Silk Road. (AP Photo/Craig Ruttle)
Robert Faiella, a Florida Bitcoin exchanger, walks from the federal court house in New York Thursday, Sept. 4, 2014, after pleading guilty to federal charges that he helped smooth the way for drug transactions on the online marketplace Silk Road. (AP Photo/Craig Ruttle)
Charles Shrem, center, the top executive of a New York City-based Bitcoin company, walks from the federal court house in New York Thursday, Sept. 4, 2014, after pleading guilty to federal charges that he helped smooth the way for drug transactions on the online marketplace Silk Road. (AP Photo/Craig Ruttle)
Charles Shrem, center, the top executive of a New York City-based Bitcoin company, walks from the federal court house in New York Thursday, Sept. 4, 2014, after pleading guilty to federal charges that he helped smooth the way for drug transactions on the online marketplace Silk Road. (AP Photo/Craig Ruttle)
This artist rendering shows Ross William Ulbricht, right, appearing in Federal Court with his public defender Brandon LeBlanc, left, in San Francisco on Friday, Oct. 4, 2013. U.S. Magistrate Judge Joseph Spero postponed the bail hearing for Ulbricht who is being charged as the mastermind of Silk Road, an encrypted website where users could shop for drugs like heroin and LSD anonymously. (AP Photo/Vicki Behringer)
FILE - This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah U.S. prosecutors say Monday, Jan. 27, 2014, that two men are charged with conspiring to commit money laundering by selling more than $1 million in Bitcoins to users of the black market website Silk Road, which lets users buy illegal drugs anonymously. (AP Photo/Rick Bowmer, File)
A Kyrgyz drug addict smokes after getting high from a heroin injection in Osh, southern Kyrgyzstan, Friday, March 25, 2005. Osh is a major transit point for drugs from Afghanistan and Tajikistan to Kazakhstan and Russia. Drug smugglers have exploited this Central Asian landscape for years, making it a major conduit for opium. Now, political instability is adding to concerns that smugglers may be bringing in something worse, nuclear material terrorists could use for fission weapons or crude "dirty bombs," a "new security threat," says the U.N. Office on Drugs and Crime. (AP Photo/Nadyr Sykmenov)
NEW YORK, NY - JANUARY 13: Supporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, stand in front of a Manhattan federal court house on the first day of jury selection for his trial on January 13, 2015 in New York City. Ulbricht, who has pleaded not guilty, is accused by the US government of making millions of dollars from the Silk Road website which sold drugs and other illegal commodities anonymously. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - JANUARY 13: Supporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, stand in front of a Manhattan federal court house on the first day of jury selection for his trial on January 13, 2015 in New York City. Ulbricht, who has pleaded not guilty, is accused by the US government of making millions of dollars from the Silk Road website which sold drugs and other illegal commodities anonymously. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - JANUARY 13: Max Dickstein stands with other supporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, in front of a Manhattan federal court house on the first day of jury selection for his trial on January 13, 2015 in New York City. Ulbricht, who has pleaded not guilty, is accused by the US government of making millions of dollars from the Silk Road website which sold drugs and other illegal commodities anonymously. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - JANUARY 13: Max Dickstein stands with other upporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, in front of a Manhattan federal court house on the first day of jury selection for his trial on January 13, 2015 in New York City. Ulbricht, who has pleaded not guilty, is accused by the US government of making millions of dollars from the Silk Road website which sold drugs and other illegal commodities anonymously. (Photo by Spencer Platt/Getty Images)
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The two former agents appeared to have operated independently of one another in allegedly stealing electronic money known as bitcoins from the same investigation.

Force was the lead investigator of one aspect of the multiagency and multistate investigation of Silk Road and its now-convicted operator Ross Ulbricht, who used the online name "Dread Pirate Roberts."

Force worked undercover and convinced Silk Road's operator that he was a drug smuggler with global underworld connections. Force, using the online pseudonym "Nob" communicated with the Dread Pirate Roberts using "pretty good privacy" encryption software and obtained hundreds of thousands of dollars in bitcoin payments as part of a sting operation sanctioned by his supervisors. But Force is charged with failing to report many of the communications and payments and funneling money received from Silk Road to private accounts.

Force is also accused of creating a new online persona known as "French Maid" without his supervisors' knowledge. Force is charged with using the French Maid moniker to sell inside information to Silk Road about the investigation into the website. Court records accuse Force of stealing more than $200,000 from Silk Road during the federal investigation of the site.

Force is also charged with accepting a position as chief compliance officer for a bitcoin company while serving with the DEA. Force is accused of using his DEA position to seize a customer's $297,000 account and transferring it to his private account. Force resigned from the DEA last year after a 15 year career, according to court records.

His attorney Ivan Bates didn't return a phone call.

Bridges, meanwhile, is charged with using information gleaned during the investigation to hack into the site and steal $800,000 in January 2013. Bridges served on a special U.S. Secret Service electronic crimes task force and was the technological expert for the Silk Road investigation.

Bridges, 32, sat in on a debriefing of a Silk Road employee cooperating with the probe who gave investigators passwords to access the site as administrators. He is accused of leaving that meeting early and using the information supplied by the employee to access Silk Road's finances and funnel the $800,000 to private accounts. Bridges "abruptly" resigned on March 18 after a six-year career with the Secret Service, court documents show.

Federal authorities arrested Ulbricht in San Francisco in October 2013 and shuttered the site. A federal jury convicted Ulbricht of seven charges, including running a continuing criminal enterprise, narcotics trafficking, money laundering and computer hacking. Ulbricht faces 30 years in prison and is scheduled to be sentenced May 15.

Cybersecurity experts said corruption on the Internet appears to be uncommon because there are few law enforcement agents who have the skills to carry out the type of fraud Force and Bridges are accused of committing.

J.J. Thompson, chief executive officer of Rook Security, an Indianapolis-based computer security company, said that as more people officers learn the skills, cases of corruption are likely to increase.

"It's really easy to create opportunity in the cyberworld because there are few people to hold you accountable," Thompson said.

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