Thursday, April 30, 2015

Bitcoin DEA Agent Arrested -Guns,Drugs,Thugs

Bitcoin DEA Agent Arrested -Guns,Drugs,Thugs

Just a month before leaving the DEA, Force created a Bitcoin speculation company called Engedi, LLC—a Biblical reference to a particular oasis. Force seems to have a predilection for nods to the Bible: he created the online persona "Nob," who became a confidante of Ulbricht. Nob is the location in ancient Israel where David receives the sword of Goliath.

Fulvio Martusciello

  1. Rogue Silk Road DEA agent arrested with “go bag,” 9mm pistol

    Ars Technica-Apr 30, 2015
    He faces four charges, including wire fraud and money laundering. ... Nob is the location in ancient Israel where David receives the sword of ...
On Tuesday, Wired published an extensive feature on Silk Road founder Ross Ulbricht’s rise and fall, which contains some new details surrounding the government-orchestrated fake execution of a SilkRoad lieutenant, Curtis Green, better known as “chronic pain.”

As Ars reported at the end of the trial in February, Ulbricht was found guilty of seven charges including three drug counts: distributing or aiding and abetting the distribution of narcotics, distributing narcotics or aiding and abetting distribution over the Internet, and conspiracy to violate narcotics laws. His sentencing hearing is currently scheduled for May 15, 2015 in federal court in New York.
Wired detailed how one day in January 2013 Green received a controlled delivery of a package in the mail—it turned out to be cocaine. [UPDATE Wednesday 11:21am CT: After being corrected by Coriolanus, a reader, and reviewing the relevant court documents, Ars has corrected our original language, which had stated that this was an "unexpected delivery," rather than one that was allowed to pass through by the relevant authorities.]
As soon as Green opened the package, a SWAT team stormed him and threw him to the ground, his two chihuahuas yapping around him. He immediately pleaded with the agents to not send him to prison, deathly afraid of Dread Pirate Roberts (DPR): “This guy’s got millions. He could have me killed.”
Green’s bust was orchestrated by Carl Force, a Drug Enforcement Administration special agent. Working undercover, Force passed himself off as “Nob,” or Eladio Guzman, a “cartel operative” who e-mailed DPR in April 2012:
Mr. Silk Road,
I am a great admirer of your work. Brilliant, utterly brilliant! I will keep this short and to the point. I want to buy the site. I’ve been in the business for over 20 years. SILK ROAD is the future of trafficking.
Ulbricht began wondering what had happened to Green when he stopped responding to messages and eventually figured out that he had been arrested (and later released on bail). When $350,000 in bitcoins went missing and were attributed to Green, Ulbricht went ballistic and started telling various confidantes (including Force, as “Nob”) that he needed some “muscle” to take care of Green.
It didn’t take long for Force, who controlled Green’s computer, to determine exactly who Green was. Soon after contemplating suicide, Green was willing to cooperate with the authorities.
As Wired reported:
Force got Green to sign a waiver, thereby commencing his role in an impromptu staged torture sting against DPR. Soon Green was being dunked in the bathtub of a Marriott suite by phony thugs who were in fact a Secret Service agent and a Baltimore postal inspector. Force recorded the action on a camera. “Did you get it?” Green asked, wet and wheezing on the floor. He’d felt like their simulation was a little too accurate. They dunked him four more times to get a convincing shot.....................
...................... en/ a/ 12079183-silk-road-boss-first-murder-attempt-was-his-mentors-idea/

 The allegation that the Silk Road’s Dread Pirate Roberts attempted to pay for six murders has loomed over the story of that massive online drug market. How could the pseudonymous figure preaching non-violent, libertarian ideals stoop to commissioning the paid killings of half a dozen people? Now a newly revealed chat log from the case […] The post Silk Road Boss’ First Murder Attempt Was His Mentor’s Idea appeared first on…

Now a newly revealed chat log from the case sheds light on how the first of those paid murder attempts appears to have arisen. The logs show it was not the creator of the Silk Road who first suggested enlisting the services of a hit man, but rather his top advisor and mentor.
Earlier this week, a trove of new records from the Silk Road pre-trial hearings was unsealed, including logs of January 2013 instant-message conversations that prosecutors say were pulled from the laptop of Ross Ulbricht at the time of his arrest. In February, Ulbricht was convicted of being the Dread Pirate Roberts, Silk Road’s creator and owner. But the recorded conversations, along with the other sealed documents, had been kept secret throughout Ulbricht’s trial earlier this year to avoid compromising an investigation that led to the arrest Monday of two federal agents on corruption charges.
In the 21-page IM chat log, which occurred over the anonymous IM service Torchat, the Silk Road’s Dread Pirate Roberts carries out conversations with his staffer Inigo, a supposed drug-dealing associate named Nob (who we now know was actually undercover DEA agent Carl Force), and a figure named Cimon, also known as Variety Jones, whom Ulbricht had described in his journal as his “mentor” and advisor. The conversations revolve around $350,000 worth of bitcoin that had been stolen from the Silk Road, which Dread Pirate Roberts and Inigo believed had been taken by Silk Road staffer Curtis Clark Green. (In fact, it seems the bitcoins had been allegedly stolen by rogue Secret Service agent Shaun Bridges, using Green’s account—one of the criminal charges for which Bridges was arrested Monday.)
As they’re presented by the prosecution, the chat logs seem to show for the first time how the Dread Pirate Roberts is persuaded to commission Green’s murder. And he’s convinced not by a federal agent seeking to entrap him in the act, but by Cimon, his own trusted mentor and advisor. That initial step into the use of violence to protect his interests and the Silk Road would eventually lead Roberts to pay for five more murders.
(A quick side note: In the chat logs below, I’ve identified the Silk Road’s boss as the Dread Pirate Roberts. Though Ulbricht was convicted in February of being the Silk Road’s creator and leader, he was never charged with murder, and these logs were never presented at trial. Ulbricht’s defense attorney Joshua Dratel has said he’s still seeking a new trial for his client, in part due to the new corruption charges brought against the two federal agents investigating the Silk Road. “Our position, as it has always been, is that Ross is not DPR who is participating in those chats,” Dratel tells WIRED.)
The chain of conversations that leads to the attempted murder of Green begins when Inigo alerts the Dread Pirate Roberts to the Silk Road’s massive bitcoin theft. Roberts responds that he’s “sick to his stomach.”
“This will be the first time I have had to call on my muscle,” he adds. “fucking sucks.”
Later the same day, Roberts chats with Nob, who he believes to be a high-volume drug dealer who can help provide that “muscle” to find Green and recover the bitcoins. Roberts, after all, kept a copy of all his employees’ actual IDs to prevent the sort of betrayal he believed Green had committed, so he knows Green’s Utah address.
But in that conversation with Nob, it’s clear Roberts has no intention of killing Green, or even beating him up if it can be avoided.
Only later, when Roberts checks in with his advisor Cimon, does the question of murder arise. As Roberts explains how Green might have stolen the funds, Cimon interrupts. “Enough about the theft,” he says. “Tell me about the organ donor.”
A few minutes later, he brings up the idea of killing more explicitly. “As a side note, at what point in time do we decide we’ve had enough of someones shit, and terminate them?” Cimon writes. “Like, does impersonating a vendor to rip off a mid-level drug lord, using our rep and system; follows up by stealing from our vendors and clients and breeding fear and mistrust, does that come close in yer opinion?”
“Terminate?” Roberts asks tentatively. “Execute?”

Rogue Silk Road DEA agent arrested with “go bag,” 9mm pistol

Agent who aided Dread Pirate Roberts denied bail.

This was one of the firearms found in the home of Carl Mark Force on the day he was arrested in March 2015.

SAN FRANCISCO—Federal prosecutors successfully argued Wednesday that Carl Mark Force, the former Drug Enforcement Administration agent who allegedly went rogue during the investigation of Silk Road founder Ross Ulbricht, should not be granted bail.
"I am not prepared to release him today," United States Magistrate Judge Elizabeth Laporte said during the Wednesday hearing.
She heard 90 minutes of argument from government lawyers and from one of Force’s defense attorneys. After the hearing, Force was transferred from Santa Rita Jail in nearby Alameda County to San Francisco County Jail.
The government also presented new evidence suggesting that Force is a flight risk: he had a "go bag" (including a firearm) when he was arrested, he knows how to create fake identities as part of his undercover law enforcement job, he had multiple guns stashed throughout his home, and he sent $235,000 from a bank account in Panama to, an offshore Bitcoin site that claims to be governed by the laws of Cyprus. (The site's origins are mysterious, and it may also be based in Bulgaria and/or Russia.)
In March 2015, after the conclusion of the Ulbricht trial in New York, the government unsealed criminal charges against Force, who is accused of stealing from Silk Road, among others. He faces four charges, including wire fraud and money laundering. Force resigned from his post at the DEA in May 2014.
Just a month before leaving the DEA, Force created a Bitcoin speculation company called Engedi, LLC—a Biblical reference to a particular oasis. Force seems to have a predilection for nods to the Bible: he created the online persona "Nob," who became a confidante of Ulbricht. Nob is the location in ancient Israel where David receives the sword of Goliath.
His short-lived Twitter account has just four tweets, including this one:

(Curiously, Force's Twitter profile picture is the logo of the Penn State University Bitcoin Club—his alma mater from over 20 years ago. Patrick Cines, the club's president, told Ars that he was not aware of any connection between Force and the club. Cines added he had only heard about Force through news accounts.)
As Ars reported earlier, during the investigation, Force also worked for a "digital currency exchange company" called CoinMKT. Force used his position as a DEA agent to help the company do criminal background checks. At one point, he froze $297,000 in the account of a CoinMKT customer and transferred some of that money to his own personal account in Panama. With the money garnered from these illicit transactions, Force also made investments in real estate and businesses, paid off his mortgage, "and wrote several very large checks for tens of thousands of dollars," according to investigators.
Authorities also claim that Force created another, unauthorized Silk Road identity called "French Maid" and offered to sell Ulbricht, as Dread Pirate Roberts, information about the government's investigation into Silk Road for another $100,000 in bitcoins. According to the criminal complaint, DPR paid up, and Force deposited the money in his personal account.

Force, 46, did not speak during the hearing and showed no emotion, turning toward three women seated in attendance only once. He was dressed in red prison uniform labeled "Alameda County Jail," and orange Crocs, which apparently have become standard issue in many jails and prisons nationwide. The middle-aged man has a shaved head and a long illustrated tattoo on his left arm that was partly visible.
Last month, another journalist found Force’s (since-deleted) LinkedIn profile, in which he boasted about having bagged Ulbricht.

“Would he shoot his way out of the situation?”

Richard Evans, an attorney with the Department of Justice’s Public Integrity Section of its Criminal Division, led the prosecution and provided new details about the circumstances of Force’s arrest in Baltimore on March 30, 2015.
"The defendant was arrested as he returned home when he was at his personal vehicle, outside his home," Evans told the court. "He was found to be in possession of a ‘go bag.’ He had a fully loaded handgun, a 9mm, [and] did not have a concealed carry permit for that weapon. He had additional ammunition, a passport which may have been expired, and 10 blank $500 money orders. So he had ID, money, and weapon in his possession."
The DOJ lawyer also mentioned that when the government interviewed Force’s wife, Amy Force, she told investigators that she had recently received a tax refund of $150,000.
A few minutes later, Judge Laporte said, "I don't know what that shows, if anything, but it just seems a little odd."
Evans agreed: "I will note that the defendant is a [Certified Public Accountant], and he filed his taxes some time ago. This is the first we've heard about this tax return. This is unusual, to say the least."

The government lawyer also explained that while the passport that Force had in his possession had expired, DOJ investigators were able to determine that Force has a second outstanding passport with an expiration date of 2017.
"Our understanding is that when the defendant was arrested, apparently it was expired," he said. "Upon a check [with the Department of State] there was another outstanding; it was good for 2017. We have not seen it. Whether it is in a safe deposit box, we do not know where it is. I can tell the court that state said there is an outstanding passport good for the next couple years."
But beyond the issue of the passport, Evans revealed that Force had armed himself to the teeth.
"A search of the house revealed no fewer than four fully loaded firearms hidden throughout the house," he said, noting that authorities also found 650 rounds of ammunition.
The judge interjected, "The guns I'm not sure about—would he shoot his way out of the situation?"
Evans replied, "I'm not sure, Your Honor. Those guns have since been turned over by his wife, but they were there at the time of his arrest."
He added that Force has three minor children living at his home, aged 16, 14, and 12.
"The guns were not secured: they were under a bed, in a desk drawer, on a shelf in a closet," Evans noted. "They were stationed throughout the house in places that somebody could access them whether it was the defendant or anyone else in the house. That in and of itself is cause for concern."

Red vs. Blue

Force’s attorney provided little in the way of clear explanations to counter the government’s assertions.
With respect to the gun that was found as part of what the government called Force’s "go bag," one of his Baltimore-based lawyers, Ivan Bates, told the court that this was merely a "red herring."
"I found out that these checks were not in this bag, they were in a separate section related to his business," he said toward the end of the hearing.
"Under Maryland state law, if you’re going from the bank to your house, it is not necessarily illegal to have a gun in your vehicle provided that you can show under Maryland state law that this is for business purposes. But there has never been a charge with this handgun, and for the government to assume that this is a ‘go bag’ is very wrong. [Force] got out and told the officers that he had a weapon so that they were as comfortable as possible. What I’m saying is that if you're doing business purposes, only from point A to point B—the checks were for GMPro, his business. He has a janitorial business. What i'm saying is that the gun is a red herring, it doesn't matter, he did nothing illegal in terms of that gun."
And the second passport?
Bates said that his client remains "adamant" that the second passport is not a regular civilian blue passport but rather a government-issued "red passport" that was provided by the DEA. The lawyer did not address the other firearms found in Force’s home.
Under the judge’s instruction, Evans said he would confirm with a contact at the Department of State that Force’s second passport was indeed blue rather than red.

And how did Bates explain the $235,000 that had been transferred to The government said he had not accounted for this money at all. The Pretrial Services officer, Josh Libby, confirmed to the court that Force had not disclosed that during his Wednesday interview.
But Bates countered that Force had indeed told prosecutors about that sum and moreover claimed that it belonged to the government.
"I have e-mails that's not his money; that's the government’s money. We're fine to give it back to the government," Bates said.
"We would be more than happy to give the government the thumb drives with that information," he added. "This is complicated. It has a series of codes and things like this."
A few minutes later, Evans, the DOJ lawyer, countered, "This is the first time that anyone has ever discussed that these funds that were wired out of United States are the property of the United States."
Bates attempted to argue that his client should be treated like former Secret Service agent Shaun Bridges, who worked with Force as part of his alleged fraud scheme. The attorney argued that Bridges, who has not been charged with a crime, was given more deference than Force was.
But the government drew a clear distinction.
"We can account for all the funds that Mr. Bridges is accused of stealing; we cannot do that for Mr. Force," Eva


Criminal Charges Against Agents Reveal Staggering Corruption in the Silk Road Investigation

Two of the law enforcement agents involved in the tangled multi-agency investigation into the Silk Road have been charged by the Department of Justice for stealing hundreds of thousands of dollars (at the very least) in bitcoin. The criminal complaint against former DEA agent Carl Mark Force IV and former Secret Service agent Shaun Bridges alleges money laundering, wire fraud, theft of government property, and more. But more shockingly, it tells the story of a sprawling case tainted by an unbelievable web of corruption. A state’s witness took the fall for an agent’s theft, thus becoming the target for a murder-for-hire—a murder that was then faked by the same agent. The Silk Road case was compromised again and again as Force and Bridges allegedly took every opportunity to embezzle and steal money. With so much bitcoin on their hands, the two had to coax various bitcoin and payments companies to help convert their ill-gotten gains to dollars. When companies resisted, investigations were launched, subpoenas were issued, and civil forfeitures were sought in retaliation.
The investigation into Force and Bridges began around May 2014, nearly a year after the arrest of Ross Ulbricht. Ulbricht was convicted this February of operating the Silk Road marketplace under the moniker “the Dread Pirate Roberts.” The criminal complaint alleges that Force and Bridges not only managed to siphon off bitcoins into their personal accounts while conducting undercover operations on theSilk Road, but Force also adopted a series of different personas on the Silk Road that switched off between extorting Ulbricht/DPR and selling him information from inside the federal investigation. Under the handles “Nob” and “French Maid,” Force sold DPR information that he had supposedly acquired from a corrupt government agent, while under the handle “Death from Above,” he used information from inside the investigation to extort DPR for bitcoins.
Between 2012 and 2013, while Force was investigating the Silk Road, he deposited into his bank account about three times the amount of money he was making on his government salary. He also paid off the mortgage on his house, repaid a $22,000 government loan, wired $235,000 to an offshore account in Panama, and invested tens of thousands of dollars in real estate and stocks.
DPR Blamed Curtis Clark Green For Agent Bridges’s Theft
As for Shaun Bridges, he seems to have stolen about $820,000 from the Silk Road. Curtis Clark Green, a Silk Road employee, turned government witness in January 2013. As part of the deal, he handed over access to his Silk Road account. While Green was debriefing the Baltimore Silk Road Task Force on how to use administrative access through his account, the Silk Road suffered a massive theft of bitcoins, beginning in the afternoon and continuing into the night. Bridges had left the debriefing session early that day.
DPR traced the thefts to Curtis Clark Green’s Silk Road account. Believing Green to be the thief, he turned to Silk Road user Nob, who he thought was a drug dealer and hitman, and ordered a hit.Nob was, in reality, Carl Mark Force. He and Green faked Green’s death, and Bridges made “proof-of-death” photographs that were eventually sent to DPR.
Ross Ulbricht was charged with this murder-for-hire in Maryland. The case is still pending there.
As for the stolen bitcoins, they were transferred to Mt. Gox—a bitcoin exchange—in late January. In February, Bridges formed “Quantum International Investments, LLC,” and opened a bank account in Quantum’s name, which only ever received transfers from Mt. Gox. Between March and May, the Quantum account received nine wire transfers, approximately totaling $820,000.
Was Ross Ulbricht Deprived of Due Process?
Although the investigation into Force and Bridges began approximately nine months before Ulbricht’s trial, Ross Ulbricht’s defense team was kept unaware of it until about five weeks before the trial date, at which point prosecutors moved to keep the information sealed. Nothing about either Force or Bridges made it into the trial.
“The Government’s efforts to keep the Carl Force scandal out of the public eye at trial is in itself scandalous,” said Joshua Horowitz, one of Ulbricht’s defense attorneys. “The recently filed Complaint which names Carl Force as a defendant demonstrates that the Government’s investigation of Mr. Ulbricht lacked integrity, and was wholly and fatally compromised from the inside.”
Worse, says Horowitz, because facts about what Force and Bridges did weren’t allowed to come to light, Ulbricht never got the trial he was entitled to. “The Government used the ongoing grand jury investigation of Carl Force to deprive the jury from hearing critical facts about the corrupt nature of the Government’s investigation, consequently depriving Ross of due process and a fair trial.”

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