Federal Agent Cops to Cashing Illicit Bitcoins

(CN) - A Secret Service agent pleaded guilty to swiping $820,000 in bitcoins during his investigation of Silk Road, the now-defunct black marketplace that operated on the Deepweb.

Shaun Bridges, 32, found himself under federal indictment in San Francisco for his actions while assigned to a Silk Road Task Force in Baltimore, Md., investigating the once-popular website that sold drugs and other illegal products through encrypted channels.

The job required Bridges to pose as one of the website's administrators in early 2013, but prosecutors said Bridges used those credentials to commandeer the accounts of various users and pocket what had then been the equivalent of $350,000 in bitcoins.

Bitcoin prices are in a volatile place today, but the digital currency's value had more than doubled when Bridges liquidated it, prosecutors say.

"We depend on those in federal law enforcement having the highest integrity and unshakeable honor, and Mr. Bridges has demonstrated that he utterly lacks those qualities," U.S. Attorney Melinda Haag said in a statement on Bridges' guilty plea Monday.

Bridges tried to hide the assets in an account at Mt. Gox, a now-defunct digital currency exchange whose former owner, Mark Karpeles, was once suspected to be Silk Road's elusive leader, a figure known only on the website as "Dread Pirate Roberts."

A sting operation ultimately flushed out Ross Ulbricht as "the real DPR," and a federal jury in Manhattan convicted the 30-year-old on all counts earlier this year.

Before Ulbricht was convicted and sentenced to life in prison, U.S. District Judge Katherine Forrest barred his defense from mentioning the turmoil and corruption within the task force investigating the Silk Road out of Baltimore.

Bridges faces up to 20 years in prison and a $250,000 fine at his Dec. 7, 2015, sentencing.

The former agent's guilty plea comes nearly two months since a different former federal agent copped to pocketing bitcoins.

Carl Force, a 46-year-old former agent with the Drug Enforcement Agency, pleaded guilty on July 1 to money laundering and obstruction of justice.

According to his criminal complaint, Force had tried to extort "Dread Pirate Roberts" - not knowing he was Ulbricht - by threatening to expose his identity if he did not receive $250,000.

Calling the agent's bluff, Ulbricht wrote in a journal entry: "Somebody says they have my ID, but hasn't proven it," the complaint says.

Ulbricht wrote, according to the complaint, that the "guy who is blackmailing me who says he has my ID is bogus."

Force's sentencing is scheduled for Oct. 19, 2015.

Authorities caught Ulbricht operating the "Dread" account inside a San Francisco library from his laptop, where he left an incriminating digital trail that included Silk Road's business records and his personal journal entries.

Ulbricht's attorney Dratel previously announced he would raise the troubled Baltimore investigation on appeal.

Dratel did not immediately respond to a request for comment.

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