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Two Federal Agents in Silk Road Case Face Fraud Charges

nytimes.com

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Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#71

Post by gwern »

deftnerd wrote: post #3

I wonder if the government buried this until after the Ulbricht trial was over. The fact that two of the investigators were corrupt and stealing funds could have derailed the case.

This was pretty deliberately buried, yes. I've been going through the evidence exhibits for the trial, and in retrospect, knowing what I know now, it's remarkable how carefully chosen exhibits are to hide all the traces on Ulbricht's end: for example, due to redaction failures, we know all the mentions of French Maid were scrubbed by prosecution; his journal is carefully chosen to start after Chronicpain was busted and used to rob SR1 accounts; the failed extortion attempt using the name 'A.A.' is partially redacted so it sounds like an isolated incident; and so on.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#72

Post by legalbeagle »

modeless wrote: post #52
CPLX wrote: post #44

I encourage everyone with interest in the overall story to actually read the complaint. It's astonishing. It appears that these two Federal agents were doing far, far more than just grabbing some excess bitcoins that were lying around and they figured nobody would miss. It reads more like a purposeful organized crime effort, involving setting up dummy shell companies, forging letters from the government, being involv…

> there is some implication that these agents may have been responsible for theft of bitcoin not only from Silk Road, but from Mt Gox as well I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. They did actually then steal from Mt. Gox, but it was "legal". They accused Mt. Gox of operati…

The complaint does accuse the two agents of stealing directly from Silk Road during the "proffer" of DPR's employee, C.G. There is no accusation of stealing from Mt.Gox. They reportedly used Mt.Gox to convert stolen bitcoin to dollars and then wired out the dollars to other accounts).

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#73

Post by gwern »

ipsin wrote: post #2

It will be interesting to see how they allegedly got the bitcoins, since I expect that will come out in the indictment and trial.

The complaint already says how: after busting Chronicpain in a CD, he turned over his SR1 moderator/admin account, and then Force used the mod/admin ability to reset passwords & PINs to log into big vendors' accounts and transfer their balance out of SR1 to his own Bitcoin account.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#74

Post by mherdeg »

I have often thought that Aaron Greenspan's attitude towards California money transmission law was a little aggressive, http://www.aarongreenspan.com/writing/20141022/the-common-se... , like, this guy is ranting about obscure laws and there is no way that the government would really abuse this legislation to shut down reasonable businesses.

Then, in this complaint, I read

""On March 4, 2014, FORCE asked one of his co-case agents on the Baltimore Silk Road Task Force to run a query in a law enforcement database for Venmo, saying that he wanted to collaborate 'on a suspicious money remitter, Venmo Inc. Venmo has since registered with FinCEN, but I want to know if they have state money license remitting licenses in California and New York. Can you check? If not, I want to seize their bank accounts (need to identify them) a la BRIDGES and [M.M.'s] seizure warrants for Mt. Gox.""

Wow. Nope. Aaron Greenspan is exactly right about the effects of this legislative mess.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#75

Post by gwern »

tedunangst wrote: post #27
vaadu wrote: post #10

Earlier quoted context omitted.

Any evidence these 2 agents provided would be regarded as unreliable.

What evidence did these 2 agents provide?

For one thing, the entire Maryland hitman case collapses if you can't use anything Force touched, because he ran it from start to finish as Nob.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#76

Post by mcguire »

eli wrote: post #40
refurb wrote: post #12

Earlier quoted context omitted.

The complaint is signed by Tigran Gambaryan, a special agent with the Internal Revenue Service It's been said before... you can do a lot to harm the gov't, but never, never piss off the IRS. Uncle Sam doesn't take kindly to messing with his cash.

More likely is that it's far easier to prove that they didn't pay any taxes on the money than it is to prove they never should have received it.

"You seem to have a crap-ton of money with no clear provenance. That's smelling like tax evasion.

"Oh, you stole it."

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#77

Post by ipsin »

gwern wrote: post #73
ipsin wrote: post #2

It will be interesting to see how they allegedly got the bitcoins, since I expect that will come out in the indictment and trial.

The complaint already says how: after busting Chronicpain in a CD, he turned over his SR1 moderator/admin account, and then Force used the mod/admin ability to reset passwords & PINs to log into big vendors' accounts and transfer their balance out of SR1 to his own Bitcoin account.

Thanks, I had missed any links to the indictment in the original story, but it's definitely a worthwhile read.

After knowing the background, I don't actually mind the redaction of those details from the evidence in Ulbricht's trial.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#79

Post by CPLX »

legalbeagle wrote: post #70
CPLX wrote: post #44

I encourage everyone with interest in the overall story to actually read the complaint. It's astonishing. It appears that these two Federal agents were doing far, far more than just grabbing some excess bitcoins that were lying around and they figured nobody would miss. It reads more like a purposeful organized crime effort, involving setting up dummy shell companies, forging letters from the government, being involv…

Interestingly, these guys weren't caught because they stole bitcoin. They were caught because they converted the bitcoin into US dollars and then ultimately transferred that cash into accounts subject to investigative jurisdiction in the U.S. Had they simply kept (and maybe even spent) the bitcoin directly, it would have been far harder to identify them.

Not sure about that. It seems like they were caught because they were totally and utterly beyond flagrant in their abuse of their office. Reading through that complaint I saw at least a dozen examples of actions where I wondered "what the hell did they think was going to happen next" in regards. Using government subpoenas to intimidate payment processors, having their name associated with bitcoin startup pitches while still being on the US Government payroll, and engaging in literal extortion attempts against DPR which were discovered easily when his servers and computer were seized, were just a few of their greatest hits. These guys were on a fast road to discovery from various different directions, it's hard to comprehend what they were thinking their endgame would be.

Re: Two Federal Agents in Silk Road Case Face Fraud Charges

#80

Post by granfalloon »

Now that blockchain analysis tools are getting better, I wonder if we'll be seeing more and more criminal activity exposed.

For example, someone linked to this wallet/transaction in a reddit thread, which appears to show one of the $100k payoffs: http://www.walletexplorer.com/wallet/08363b86122e340c

Even just six months ago it would have been hard piece that information together, but Wallet Explorer makes it clear as day.

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