Carl M. Force and Shaun W. Bridges, former federal agents, were charged with money laundering, fraud and related offenses for stealing bitcoins during their investigations into the underground black market Silkroad.
Forty-six-year-old Force, who hails from Baltimore, was working with the DEA as a Special Agent and thirty-two-year-old Bridges from Laurel, Maryland, was working with the Secret Service as a Special Agent when they were both included in the Baltimore Silkroad Task Force for investigating the illegal activities being carried out by the darknet marketplace.
While the charges leveled against Force include stealing of government property, fraud, conflict of interest and money laundering, charges leveled against Bridges are money laundering and wire fraud.
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How Was Carl Force Caught
By October 2013, Force had been with the task force team, investigating the Silkroad, for a couple of years. During the time he carefully involved in a number of lucrative bitcoin side projects.
One of his projects was ripping off the Silkroad founder, who operated under the pseudonym “Dread Pirate Roberts,” of bitcoins.
Force had by then extorted as much as 1,200 bitcoins from the Silkroad founder and opened an account with the Slovenia-based bitcoin exchange Bitstamp to turn the digital currency into cash. This action seems to have sealed his fate.
Force used his undercover name, Eladio Guzman Fuentes, he commonly assumed during investigations as a DEA agent and produced a driver’s license, Social Security card and proof of residence, all connected to the name to open the account.
His documents were passed on to George Frost, Bitstamp’s general counsel, who found out that they were all forged documents.
When Frost confronted Force, he showed his real ID, his badge, and a Baltimore water bill. Though Frost allowed Force to set up an account, he did not feel comfortable with it.
In November, Force made two large withdrawals from Bitstamp, worth $34,000 and $96,000 in bitcoins into his bank account. Suspicious Frost contacted FinCEN.
The officer he talked to at FinCEN was Shaun Bridges, who told him that the case would be referred to the Public Integrity Section of the Department of Justice.
However, nothing happened. Force kept on transferring his bitcoin assets and even cleared his mortgage payment in full in December 2013.
Six months after the Silkroad founder was arrested, Force withdrew a large sum of $80,000 from Bitstamp in April 2014. Bitstamp employees observed that the IP addresses of Force were connected to Tor.
When asked about this, Force said that he used Tor for the purpose of privacy. In the last week of April 2014, when Force tried to withdraw $200,000 in bitcoins, Frost decided to freeze his account.
Frost then scheduled a meeting with Kathryn Haun, as assistant US attorney in San Francisco. She was the first cryptocurrency coordinator of the Department of Justice.
The meeting was also attended by Tigran Gambaryan, a special agent with IRS. Frost then told them about Force.
Gambaryan, who was aware of the tension between Silkroad investigation teams in New York and Baltimore, sensed that there was something more to the story than just rivalry between the agencies.
However, Haun and Gambaryan were not sure as to whether they should investigate Force’s behavior at all. But then, what made an investigation inevitable was Force’s subsequent action.
He contacted Bitstamp customer service and requested that all his transaction history be deleted.
While Gambaryan wanted to pull out Force’s financial records as well as the latter’s bitcoin activity and match them with transaction records that were already there in the Silkroad database under the government’s custody, Haun started her investigations from Shaun Bridges.
They had a conversation with Bridges through phone on May 6, 2014. His behavior set off alarm bells, and they decided to take Force’s case forward without Bridges’ help.
Gambaryan found out that Force used his undercover account Nob to get Ulbricht’s attention. He told the founder of Silkroad that he was interested in purchasing the website.
Ulbricht quoted $1 billion for the Silkroad site. After a few months, Force informed him that it was not cost-effective for him to do business in quantities below ten kilos.
The Silkroad founder wrote back to him saying that one of his staff would get back to him with the details of a buyer who can deal in large quantities. The buyer was Curtis Green, a Silkroad staffer.
He operated under the name “Flush” and was in charge of Silkroad Forums.
Green signed for a package containing 1 kg of cocaine that Force had arranged to be sent to him. When Green delivered the package to Force, he was arrested by a dozen of agents.
Green did a short stint in jail for cocaine possession, but he was brought out on bail and was questioned by the agents Force and Bridges for about 12 hours.
They asked him to spill out everything he knew about Silkroad, which he did. He even told them the password to his Silkroad account.
Later in the day, huge amounts of bitcoins were transferred to a Number13 account. Sellers on Silkroad also started losing bitcoins from their Silkroad accounts.
By the time the Silkroad founder realized this, as much as 20,000 bitcoins had disappeared.
Ulbricht thought Green was behind this and wanted to teach him a lesson. He turned to “Nob” for help, who was only too keen to oblige.
Initially, the Silkroad founder wanted Green to be beaten up but later on said that he should be executed. Nob demanded $80,000 for the job.
Green staged his own death and Nob got the payment. Force promptly handed over the money to the government.
However, Force had other ideas for getting money from the creator of Silkroad. He sent a message from his new account “Death From Above” to Ulbricht, saying that he was aware of the latter’s involvement in Green’s death. His aim was to get $250,000 from the creator of Silkroad.
Gambaryan found out that “Death From Above” is Force’s another account only because he had left a video footage of himself typing from the same account. Force’s extortion attempt failed as the Silkroad founder refused to pay him. Force then, acting as Nob, got Ross Ulbricht to pay him 400 bitcoins for counterintelligence information from a Justice Department employee Kevin.
Two months later, the Silkroad creator spent another 525 bitcoins. Force mentioned about the first payment in his report to superiors, but not about the second payment. However, a mistake committed by Ross helped Gambaryan to find out that the second payment went to Force’s another bitcoin wallet.
Force created another Silkroad account in the name of “French Maid,” offering information on the government’s investigation into Silkroad for $100,000 in bitcoins. The creator of Silkroad paid once again, and the money went into a personal account of Force.
Haun held a “proffer” session for Force along with Gambaryan. Force admitted to working as “Nob” and taking off bitcoins of the government. However, he acted as though he did it out of a big misunderstanding.
During the session, he also informed that he did not know anything about the accounts “French Maid” and “Death From Above.”
Gambaryan went through the vast Silkroad database once again and confirmed that Force was both “Death from Above” and “French Maid” from the particular version of PGP that he had in his e-mail signatures. Finally, Force was boxed in.
How Was Shaun Bridges Booked
The investigation of Carl Force led to the apprehension of Shaun Bridges. In early December 2014, when Haun was getting ready to charge Carl Force, Gambaryan came up with a startling discovery.
He found out through Wallet Explorer, a smart Bitcoin block explorer that offers wallet labeling and address grouping service, that the second payment of 525 bitcoins was directly sent by the Silkroad founder (by manually cross-referencing his and Force’s bitcoin transactions) to another account.
This indicated the involvement of yet another person. Gambaryan investigated the matter further and started doubting whether Bridges and Number13 accounts were the same.
Haun and Gambaryan also found out that the stolen bitcoins have been sent to Mt. Gox exchange from the Number13 account. Gambaryan used a mutual legal assistance treaty procedure for accessing the financial records of the Japanese bankruptcy trustee.
The records showed money had been moved to a Fidelity account registered as “Quantum Investments” from the Mt. Gox exchange. Quantum Investments was found to be a company registered by Bridges in his name and home address.
Bridges resigned from his position in the Secret Service on March 15, 2015, and this suggested strongly that the other person involved in stealing the Silkroad founder’s and government’s money was none other than himself.
A proffer session was offered to Bridges also. However, he was unrepentant and arrogant during the session.
Charges were filed against both the Silkroad agents on March 30, 2015. Within one month, Bridges, and a few weeks later, Force, pleaded guilty.
Bridges and Force were sentenced to 71 months and 78 months, respectively, in prison.
While Force is serving his term in a federal prison located near Louisville, Kentucky, Bridges is in the Terre Haute Federal Correctional Institution in Indiana.