Silk Road Meth Dealer Gets Lighter Sentence

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Canada’s biggest online meth dealer Jason Weld Hagen probably just got the biggest break of his life. Hagen, known to online drug community as the biggest meth dealer operated under the handle “Hammertime” on Silkroad, the darknet site that once ruled the online black market for drugs, was given a lighter sentence in the light of revelations of corruption perpetrated by the very law enforcement agents investigating Silkroad.

Federal Investigation Into Silkroad and Hagen’s Arrest

The official investigation on the drug dealings of Hagen and his associates started in the later part of 2011 after Homeland Security Investigation special agents received information about Silkroad, an underground online marketplace for buying and selling drugs, other illegal substances and illegal services. The Baltimore Silkroad Task Force was subsequently created, and was composed of agents from the US Secret Service, the Drug Enforcement Administration (DEA), the US Postal Inspection Services and the Internal Revenue Services.

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Crystal Meth

Task force investigations revealed that Silkroad has been operating since 2011 and has close to a million users who have conducted at least 1.2 billion in transactions. Silkroad offered a safe online place for drug dealers and suppliers to sell to buyers from all over the world, undetected by law enforcement authorities, since transactions where conducted through The Onion Router. Because users were able to mask their IP addresses when they logged into the Silkroad network, the transactions done through Silkroad were completely anonymous. The task force shut down the website in October 2013 and arrested Silkroad administrator and owner Ross William Ulbricht in October 1. The Silkroad creator was convicted in February for drug trafficking, money laundering, computer hacking and operation of a criminal enterprise. His arrest led to the seizures of servers that offered investigators information about the biggest players on Silkroad, Hagen and his team included. Arrests of illegal sellers, including those of Hagen and his group, were conducted after Silkroad was shut down.

Indictment

Hagen and four others, namely Chelsea Leah Reder, Richard Egan Webster and Donald Bechen, all Portland residents, were indicted according to an official announcement made by US Attorney for Oregon, Amanda Marshall. The charges involved conspiracy to distribute meth over the internet through Silkroad, the conspiracy to export meth to other countries and international and domestic money laundering. The indictment contains allegations that the group used anonymizing software such as Pretty Good Privacy and TOR to sell meth on Silkroad for bitcoin payments. Transactions on Silkroad reached as far as Australia, Canada, the Czech Republic, the UK and Italy. They allegedly converted the bitcoin payments to US currency by using electronic money transfer systems like PayPal and Western Union. The group allegedly sold the drug in small increments, usually a half gram at a time. These were shipped inside DVD cases labeled “South Beach Workout.”

Allegations of Corruption

Gavel Hammer
Allegations of corruption and finally admission by members of the task force that investigated Hagen and other Silkroad distributors resulted to a lesser sentence for Hagen and his co-accused. Former US Secret Service agent Shaun Bridges pleaded guilty to charges that include money laundering and obstruction, along with DEA agent Carl Mark Force IV, who is charged with extortion, theft of government property, money laundering, conflict of interest and wire fraud. Bridges apparently stole more than $800,000 in bitcoins during the Silkroad investigation and diverted these to his own accounts. He has since resigned his post in March and according to his lawyer, accepts complete responsibility for his actions. Force IV was an undercover agent in the investigation who used the handles “Nob,” “French Maid,” and “Death from Above.” He sold information to Ulbricht about the investigation and stored the payments in his personal accounts, accumulating enough money to pay off his mortgage, a government loan and stash up to $235, 000 to an offshore account. Both agents also allowed Ulbricht to believe that Curtis Green, a Silkroad employee was behind the stolen bitcoins. Force IV was hired by the latter to kill Green, and both agents staged Green’s murder, sending Ulbricht death-proof photos which were later used in his prosecution.

Hagen Gets Lighter Sentence

Hagen pleaded guilty to running the drug and money laundering conspiracy in February. Due to the taint corruption and illegal activities perpetrated by no less than members of the task force, US Attorneys Martin and Haub recommended reduced punishment for Hagen and the other members of his group. They recommended that Hagen be given three years and a month in prison instead of the six years mandated by federal sentencing guidelines. Judge Jones expressed his dismay by saying that Hagen did not deserve the penalty reduction because he distributed the drug to people all over the world. However, he agreed with the recommendation and sentenced Hagen to the recommended 37 months plus five years of court supervision. Because Hagen had already spent 16 months in jail pending resolution of his case, he is expected to be out by mid-2017. Noel Grefenson, his lawyer told the court that to his credit, Hagen had come clean to his family and had taken a hard look at his actions and the double life that caused trouble for him and his family. Hagen, for his part, apologized to his family, telling them that he has become a better man after being caught, and concluded by thanking the government. Judge Jones, however, maintained that the crimes Hagen committed were egregious and that it was hard to give him credit because the government made mistakes.

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