
Secret Service Agent Sentenced In Scheme Related To Silk Road Investigation - FriedPickles
https://www.justice.gov/usao-ndca/pr/former-secret-service-agent-sentenced-scheme-related-silk-road-investigation
======
tristanj
This isn't newsworthy, the incident happened in 2013 and he was already
caught, sentenced, and sent to jail in 2015. He received 71 months in prison.
His partner in crime (Carl Force) received six years in prison (HN discussion:
[https://news.ycombinator.com/item?id=10417551](https://news.ycombinator.com/item?id=10417551)).
The whole incident was well publicized in the media (thousands of articles).
The only new thing this one adds is that the DoJ announced he is receiving
additional sentencing.

The submission title is clickbait, and does not reflect the article's
contents. A better title would be "Secret Service Agent receives additional 24
month sentence for theft of 1,600 Silk Road Bitcoins".

If you're interested in the background for the case, WIRED has a good article
from March 2015 [1], as well as a link to the pair's criminal charges [2] .

[0] [https://www.justice.gov/opa/pr/former-secret-service-
agent-s...](https://www.justice.gov/opa/pr/former-secret-service-agent-
sentenced-71-months-scheme-related-silk-road-investigation)

[1] [https://www.wired.com/2015/03/dea-agent-charged-acting-
paid-...](https://www.wired.com/2015/03/dea-agent-charged-acting-paid-mole-
silk-road/)

[2] [https://www.scribd.com/document/260409270/Force-Bridges-
Crim...](https://www.scribd.com/document/260409270/Force-Bridges-Criminal-
Complaint#fullscreen&from_embed)

~~~
nikcub
This is a new crime.

The original crimes he plead guilty to in 2015 and was sentenced (money
laundering, obstruction of justice). This new crime he plead guilty to a few
months ago and was sentenced this week (money laundering).

The new crime is that after he had plead guilty in the 2015 case he was out on
bond awaiting sentencing. During that time he took a backup of the Bitcoin
private key for the 1,600 Bitcoin the USG had seized from him and moved them
to an offshore account.

The USG went to sell or move the Bitcoin they had seized from Bridges and
found all of the addresses empty

He was caught (again) and plead guilty (again) - and this time handed over all
of his keys and hardware wallet and returned the 1,000 (on a hardware wallet)
+ 600 (in a market account) coins

As an aside - the obstruction of justice charge is _insane_. In his first
theft, he transferred some coins to a personal MtGox account. He later learned
that the USG was investigating MtGox and knew that eventually they would
discover his MtGox account if it was seized. So he transferred his MtGox coin
out and then sent them a seizure notice so that they would be tipped off to
the investigation.

It had its intended affect - the DOJ called off its investigation into MtGox
(this was mentioned in sentencing memo)

Ars do a good summary of the new charges and some of the other aspects of the
case:

[https://arstechnica.com/tech-policy/2016/07/corrupt-agent-
wh...](https://arstechnica.com/tech-policy/2016/07/corrupt-agent-who-
investigated-silk-road-is-suspected-of-another-700k-heist/)

edit: To add, we don't get many technical details of this case because of the
plea - but i'm curious to know for certain how they traced the second theft
back to Bridges and how they found his new Bitfinex account. It isn't hard to
believe they always suspected he had taken them, and then worked backwards
looking at his movement etc. - but for now we can mostly only speculate

Here is what we do know. A day before he was supposed to hand himself in, he
was raided and they found id documents, offshore corporate records, a new
passport, citizenship applications for his wife for a third country, a macbook
with serial number filed off, etc. Its likely they subpoenaed bitcoin markets
for those offshore entity names. It also looked like he was going to run:

[http://ia601308.us.archive.org/17/items/gov.uscourts.cand.28...](http://ia601308.us.archive.org/17/items/gov.uscourts.cand.288494/gov.uscourts.cand.288494.116.0.pdf)

~~~
baldfat
24 Months for this is crazy. He stole 10.4 million dollars of goods. He tipped
off about another case coming against MtGox and knowingly continued these
activities after being caught.

I think this just shows the weakness of out sentencing guidelines. People with
a thousand dollars of drugs get decades and this guy gets 2 years tacked on?

~~~
tryingagainbro
_24 Months for this is crazy_

No it isn't. It's USA, snatch a chain (not trivial considering the trauma to
the people but still...) while having a gun and you may get 99 years (Texas).
Steal millions or billions and get a sentence of months.

~~~
jstarfish
It looks ridiculous on paper, but it does make sense in the grand scheme of
things.

Aggravated assault/battery gone wrong has permanent consequences. Whether it's
a $3 chain, a $3k necklace or a $30k car, when I steal it at gunpoint, an
error in execution can result in loss of life. Life is not replaceable. There
is no justice to be had, even if I'm caught.

An embezzlement or scam gone wrong results in a few more digits than intended
getting shuffled around and an insurance claim gets filed; if it falls through
maybe a company goes under, a retirement fund/livelihood is ruined but in the
end, all the players victimized are free to try living again in some capacity
and/or try to seek restitution. That's what justice is supposed to entail.

Knowing crime is a predictable behavior, we are much better off as a society
guiding determined criminals towards the lesser consequences of white collar
crime.

Would you rather someone open a $300k HELOC in your name or potentially kill
you for the $20 in your wallet?

~~~
shkkmo
Yes, I would rather be mugged and have someone take $20 from my wallet than
have someone take my entire retirement. Perhaps for you "a few digits" off
your retirement isn't a huge issue because you can just send more money in,
but that isn't true for the majority of the population.

The reason for these harsh sentences isn't because they were "risking someone
else's life", if it were we would have similar penalties for drunk driving.

The basis for these disparities are clearly classism, racism and political
fear mongering.

~~~
jstarfish
Not everybody survives muggings, carjackings or home invasions, even when they
comply. It's a choice between paying $20 to play Russian Roulette with a
twitchy felon on the side of the road, or being scammed out of $300k and
walking away. If you only look at the financial outcomes, of course it's an
easy choice to make.

I only have so many working years left. Not enough to recover from such a
scenario. But I'd still choose to be old and destitute than risk orphaning my
children for want of $20. Keyword being risk-- I'm aware most muggings do not
end violently.

A loss of your retirement funds could just as easily happen due to general
economic instability. Medical bills. Bain Capital. But you get to try to pick
up the pieces however you can...because however your loss was incurred, it
didn't _actually_ kill you.

The basis for these disparities has more to do with criminal intent than
you're admitting...and everybody wanting tougher DUI laws until they get
charged with one.

~~~
shkkmo
> Not everybody survives muggings, carjackings or home invasions, even when
> they comply. It's a choice between paying $20 to play Russian Roulette with
> a twitchy felon on the side of the road, or being scammed out of $300k and
> walking away. If you only look at the financial outcomes, of course it's an
> easy choice to make.

That is pretty obvious and condescending to say. Obviously everyone has a
different risk preference. I was responding to a question (which was
attempting to be rhetorical), not trying to tell you what your risk preference
should be.

> The basis for these disparities has more to do with criminal intent...

If the basis for the disparities is criminal intent, then we wouldn't have
seen the 2 year sentence for stealing 10 million dollars that is under
discussion.

A mugging for $20 has less criminal intent than a $10MM white collar crime and
muggings kill far fewer people every year than drunk drivers.

Disparities in punishments are highly driven by political fear mongering,
classism and racism. (though this has somewhat lessened in recent years)

~~~
sfifs
It simply reflects social priorities. If physical violence were tolerated as
commonplace and had few deterrents then a lot of people would feel much more
unsafe all the time.

I wonder if you have ever lived day to day in a place where a few wrong words
to virtually anyone would get you beaten with zero consequences to the
attacker. I have and I absolutely don't miss it vs. living today in a place
with virtually absolute physical safety but a more wild west financial
industry.

------
habosa
For those who want to read more about the Silk Road story, including
everything in this post, check out the book "American Kingpin" [0].

It's a great read and a real page turner. It tells you about Ulbricht, his
accomplices, everyone chasing him, etc. Reads like a novel.

[0]: [https://www.goodreads.com/book/show/31920777-american-
kingpi...](https://www.goodreads.com/book/show/31920777-american-kingpin)

~~~
jameskegel
Having just finished this book about 2 months ago, I tend to agree. My only
gripe is that the book is about 20% too long. There is a lot of what I call
"fluffing", like when I had a book report with a simple topic and a high word-
count minimum

~~~
thousandautumns
Yeah if the book is too lengthy, the author also authored a series of articles
for Wired (I believe) a couple years back that are pretty in depth and a great
read and serve as the basis for the book. I highly recommend them.

~~~
astura
Is this it? [https://www.wired.com/2015/04/silk-
road-1/](https://www.wired.com/2015/04/silk-road-1/)

It's not written by him but it contains this:

>This article includes reporting by Nick Bilton, whose book on the Silk Road
case will appear in 2016

------
emdowling
I would be very curious to know why he thought he would get away with this.
Did he erroneously believe Bitcoin is anonymous? Have there been any
interviews with the agent or those around him?

~~~
kbart
Call me cynical, but I don't believe it's uncommon for them to take forfeit
money after an arrest. This time the only difference was that Bitcoin
transactions could be publicly seen, as opposed to cash/wire transfer, and the
agent wasn't aware of that.

~~~
emdowling
> the agent wasn't aware of that

If thats the case, it's interesting that he wasn't aware of the fundamentals
of the technology that enabled the people he was investigating.

~~~
draw_down
Is it? Criminals are often just dumb.

~~~
mrleinad
Well, you'd expect that the agents investigating those crimes would not be.

~~~
_jal
Why is that?

~~~
yeahsure
Because they are expected to have the skills needed to perform their job,
specially such an important one.

------
ringaroundthetx
I've seen cases thrown out for ALL of the reasons that Ross Ulbricht's lawyers
brought up.

Such as when the government withholds evidence to allow the defense to
properly mount a defense.

Such as when the investigators of the case were part of a corrupt money
laundering and extortion scheme, where they steal money intended for the
government and concoct schemes to make the defendant look worse to a jury even
if they can't charge him with those things, but those things are also used in
sentencing rationale.

Such as when those exact investigators can't be brought in as witnesses
because they botched the whole investigation for multiple field offices and
government agencies.

Ross had zero wins in his motions, in his sentencing, in his appeals.

Amazingly discretionary how all of this is.

~~~
s73ver_
Because none of this changed the fact that Ross, and Ross alone, ran the Silk
Road. He did the things that he was accused of. Other criminals being
criminals around him doesn't change that fact.

~~~
ringaroundthetx
Yes, I too read the judge and appeals judges responses

------
adekok
So we should trust the government with encryption back doors, right?

Right?

------
tryingagainbro
(Almost) everyone has a price. Show a suitcase containing $5 mil to a border
agent making $90k a year, and he'll let you pass 10 tons of cocaine...and
maybe even ask his wife to sleep with you (if you request it). Humans and
all...

~~~
ddnb
I know I would (letting the 10 tons pass)

~~~
a3n
That would be a terrible mistake (beyond the current crime). Once you've
allowed the one shipment, you'll possibly be forced to allow or commit much
more, under threat of exposure.

~~~
draw_down
GP said they would do it, not that it wouldn’t be a mistake.

------
bertolo1988
Someone should do a movie out of this. One of the most amazing histories i
have ever heard and it's not over yet.

------
jijji
stealing bitcoins is like stealing a bag of money with a gps chip. its hard to
spend the money without everyone knowing where it was spent

------
bkovacev
Excuse my ignorance, couldn't have he moved the bitcoins to offline storage,
or is that the thing of the past? I am so out of the loop with bitcoin.

~~~
Xophmeister
Offline storage just means having a physical copy of the wallet keys stored
somewhere safe and no digital copies (or a hardware wallet that is equally
well-hidden) that can be accessed by the network. The record of any nefarious
transaction will always exist on the blockchain for all to see.

To get away with it, he would have had to deny all knowledge of the keys --
which he could potentially do with offline storage, at the expense of opening
himself to perjury if he ever got busted -- but, importantly, never spend the
contents in a way that could be linked back to him by following the metadata
"paper trail". That last one is pretty difficult to achieve, especially when
so many coins are involved and they're already "hot". A mixer could help
obfuscate the trail -- especially if there were steps involving exchanging to
other cryptocurrencies or fiats, but then trust becomes a real issue -- but
given the current exchange rate, it would probably be worthwhile for the Feds
to do some blockchain forensics to keep track of it all.

I don't think he would have ever got away with it.

~~~
davidsong
Did Monero exist at the time? It ought to have been possible to just put it in
Monero and leave it mixing for years, then pull it out slowly over time.

~~~
TomMarius
No, it didn't. It also isn't that easy, I've seen some papers about tracking
Monero coins.

------
Voyage_wanderer
You should realize that every agent on the case or any case of money
laundering have total and anabated control of money flow. They are a part of
the system. Guys who caught are just stupidest of the bunch.

------
jason_slack
I read "American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the
Silk Road" and seeing how these agents committed these crimes and their jail
sentence and then sentence that Ulbricht received seems a bit unjust to me.

------
bertolo1988
This could be a movie.

------
ryanbertrand
[removed my joke]...

~~~
jstanley
It's not a bonus, it's theft. It's still theft even if you take it from a
criminal.

~~~
SeckinJohn
Then the government taking a criminal's drug money would also be theft? Also,
he took it from a government wallet, not directly from a criminal.

Edit: Just to clarify, I was just pointing out that the comment I replied to
is tangential(1- he didn't steal from a criminal. 2- 'someone' can 'seize' a
criminal's money without it being theft.).

He obviously stole -this isn't even a case of trying to steal; he stole, and
got caught- and I don't get how he can get away with such a small punishment
for stealing $10M+.

~~~
StavrosK
No. I mean, "theft" means "we made a law making it theft". By definition,
government seizures are not theft.

~~~
erasmuse
I don't have a dog in this fight but surely neither the government nor anyone
else gets to define what ordinary English words mean.

~~~
alphydan
Of course they do. What do you call: "Taking a person's life with your own
hands?"

\- For a white westerner: Crime, Murder, etc

\- For the government/military: war, being a hero, etc

\- For "brown" people in the wrong countries: Terrorism

