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Former U.S. Agents Charged in Bitcoin Theft During Black Market Probe

The two agents were part of a task force investigating the Silk Road underground marketplace.

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The Justice Department announced charges on Monday against two former federal agents accused of stealing the digital currency bitcoin during the investigation of the underground drug marketplace Silk Road.

Carl Force, a former Drug Enforcement Administration agent, and Shaun Bridges, a special agent with the Secret Service, were charged in a criminal complaint filed in San Francisco federal court with offenses including wire fraud and money laundering.

Silk Road was an underground website where people bought drugs and other illicit goods using bitcoin digital currency. By the time authorities shut it down in October 2013, Silk Road had generated around $200 million in sales, prosecutors said.

Authorities said it was operated by Ross Ulbricht, 30, under the alias “Dread Pirate Roberts.” A federal jury in Manhattan found Ulbricht guilty in February of charges including conspiracy to commit drug trafficking and money laundering.

Force, 46, and Bridges, 32, belonged to a Baltimore-based federal task force investigating the Silk Road. Force had a prominent role in the probe, authorities said, as he was the lead undercover agent in communication with Ulbricht.

But prosecutors said that while Force spoke with Ulbricht using an officially sanctioned alias, he also created unauthorized online personas to communicate with “Dread Pirate Roberts.”

Using those aliases, Force extorted $250,000 from Ulbricht and later offered to sell him information about the government’s investigation for $100,000, the complaint said.

Prosecutors said Force also stole $90,000 worth of bitcoins that Ulbricht paid him under an officially sanctioned alias used for the undercover investigation.

Authorities said Bridges, 32, meanwhile diverted to his personal account over $800,000 worth of bitcoin that he controlled during the Silk Road investigation.

Force was arrested in Baltimore on Friday and expected to appear in court there later Monday. Bridges surrendered and was scheduled to appear in court in San Francisco.

Steven Levin, a lawyer for Bridges, said he maintains his innocence. An attorney for Force could not be immediately identified. Ulbricht’s lawyer had no immediate comment.

The case is U.S. v. Force, U.S. District Court, Northern District of California, No. 15-mj-70370.

(Reporting By Nate Raymond and Lisa Lambert; Editing by Emily Stephenson and Cynthia Osterman)

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