Federal agent pleads guilty to corruption charges in Silk Road case

A former DEA agent admits to pocketing more than $100,000 worth of bitcoins that he solicited from Ross Ulbricht, founder of the online bazaar for illegal drugs.

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Brett Murphy is an editorial intern for CNET News. He attends the University of California at Berkeley Graduate School of Journalism. His work has appeared on KQED, AJ+, New American Media, the San Jose Mercury News, and several regional magazines in Pittsburgh, Penn., where he went to college and put french fries in sandwiches.
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"Seduced by the perceived anonymity of virtual currency and the Dark Web," a federal agent fraudulently obtained bitcoin, says the assistant attorney general of the US. Bitcoin

A federal agent involved in the investigation of online illegal-drug marketplace Silk Road has pleaded guilty to money laundering and obstruction of justice in connection with the case.

While working undercover for the Drug Enforcement Agency, Carl Force infiltrated Silk Road in an attempt to catch its founder, Ross Ulbricht, who in May was sentenced to life in prison for his involvement. Force, under the aliases "Nob" and "French Maid," sold Ulbricht false driver's licenses and "insider" information regarding the federal investigators' probe.

Federal prosecutors said Ulbricht, under the moniker "Dread Pirate Roberts," conceived and oversaw Silk Road's operations as it grew into a $1.2 billion drug empire over just three years. The site was known by users as an Amazon of sorts for illegal narcotics, with buyer ratings and money-back guarantees.

Force pocketed more than $100,000 worth of the digital currency bitcoin that he had solicited from Ulbricht, according to the plea agreement, announced Wednesday.

Force wasn't the only agent accused of wrongdoing. Shaun W. Bridges, a former member of the US Secret Service, has also been charged with money laundering and obstruction of justice, allegedly siphoning more than $800,000 in bitcoins during the Silk Road investigation.

Wednesday's plea is the latest chapter in one of the strangest tales associated with the underbelly of the Internet. Silk Road operated on a portion of the Net known as the Dark Web, where user activity is anonymous and all sorts of clandestine and illegal activity takes place. With the right connections, pieces of code and usernames, you can steal, traffic drugs and smuggle contraband from the comfort of your couch or local café. The Silk Road case in particular was a testament to how the Web's intricate communication network can change how we think about society and its criminal element.

The two agents' indictments added an unusual twist to the case, underscoring the potential dangers represented by the mixture of anonymity and illegal activity.

"Seduced by the perceived anonymity of virtual currency and the Dark Web, Force used invented online personas and encrypted messaging to fraudulently obtain bitcoin," Assistant Attorney General Leslie R. Caldwell said in a statement from the US Department of Justice. He added that the guilty plea should send a message: "Neither the supposed anonymity of the Dark Web nor the use of virtual currency nor the misuse of a law enforcement badge will serve as a shield from the reach of the law."

Force, who worked for the DEA from 2012 to 2014, was posing as a big-time drug dealer who had connections to hit men. After receiving bitcoin from Ulbricht, according to the plea agreement, Force invested $110,000 in CoinMKT, a digital-currency exchange, where he served as the chief compliance officer.

Once the DEA began probing CoinMKT, Force directed the exchange to freeze $337,000 in cash and digital currency before he transferred about $300,000 into his personal account.

He also admitted to signing a $240,000 contract with Twentieth Century Fox Film in a movie deal about the government's investigation into Silk Road -- all without the knowledge or permission of the DEA.

Force himself summarized his role succinctly in the plea agreement: "As a DEA Special Agent, I held a position of public trust and I abused that position." He could face a maximum of 20 years in prison when sentenced in October.