A former US Secret Service agent has pleaded guilty to money laundering and obstruction of justice for crimes committed during his investigation of the Silk Road dark web marketplace, the US Department of Justice (DoJ) has revealed.
Shaun Bridges, 32, who worked for the US Electronic Crimes Task Force for six years, admitted the theft of $820,000 worth of bitcoins during his assignment with the Silk Road task force between 2012 and 2014.
As part of the operation, Bridges was tasked with conducting forensic computer investigations to locate, identify and prosecute key Silk Road targets including its owner Ross Ulbricht, aka Dread Pirate Roberts.
Silk Road operated for more than two years until it was shut down in October 2013 having generated more than 9.5 million bitcoins in sales of drugs and other illegal goods.
The DoJ said that in January 2013, Bridges, who was undercover with the title ‘Number 13', admitted using an administrator account on Silk Road to obtain access to the website, reset passwords and illegally transfer roughly 20,000 bitcoins into a separate account managed by himself.
Bridges then moved the bitcoin into an account at Mt. Gox, a digital currency exchange based in Japan, liquidated the bitcoin into various accounts that amounted to $820,000 before funnelling the money into personal investment accounts in the US.
Bitcoin is an online currency that is not managed by a central bank. Its value is set by users and businesses and it is a popular in online transactions.
The DoJ said that Bridges also obstructed the investigations of other law enforcement officers during the Silk Road investigation. Specifically, he made "multiple false and misleading statements" and "encouraged another government employee to lie to investigators" while they were looking into his actions.
Richard Weber, chief of the IRS Criminal Investigation, said that "a series of complex transactions" led to the theft of bitcoin by former agent Bridges.
"This case is an excellent example of the financial expertise of our special agents. Through the analysis of the block chain and data from the Silk Road servers, we were able to trace the flow of funds which eventually led to the defendant," he said.
Bridges will be sentenced on 7 December.
Additionally, former special agent Carl Force, 46, has also pleaded guilty to stealing over £700,000 worth of bitcoin while acting undercover on the Silk Road task force and is due for sentencing on 19 October.
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