Products allegedly available through the Silk Road site. (Photo: AP) 
 
 A Secret Service agent and a DEA agent with lead roles in the investigation to take down the Internet drug bazaar Silk Road allegedly stole proceeds from the underground site and hid their booty in offshore accounts. 
 
 Former DEA agent Carl Force, 46, of Baltimore, the task force agent charged with going undercover to communicate online with Silk Road operator Ross Ulbricht, known as Dread Pirate Roberts, allegedly used several online aliases to extort hundreds of thousands of dollars worth of bitcoin from Ulbricht, according to a criminal complaint unsealed Monday. Force is charged with money laundering, wire fraud, theft and conflict of interest. 
 
 Prosecutors also charged Shaun Bridges, 32, of Laurel, Md., a former special agent with the U.S. Secret Service, who allegedly accessed Silk Road accounts using password information from a Silk Road customer service representative arrested in a drug sting. Bridges, who joined the Secret Service in 2009, is charged with wire fraud and money laundering. 
 
 The FBI shut down Silk Road and arrested Ulbricht on Oct. 2, 2013. Silk Road, a dark Web black market that traded in illegal drugs, counterfeit IDs and computer hacking software, required its buyers and sellers to do business in bitcoin, an anonymous digital currency that is difficult to trace. 
 
 A federal jury in New York convicted Ulbricht last month on drug conspiracy charges. Ulbricht, who will be sentenced in May, was also the target of an investigation in Maryland. Force and Bridges worked on the Maryland investigation. 
 
 Prosecutors say Force, in addition to his official undercover identity as "Nob," created several unauthorized online aliases, so he could conduct complex bitcoin transactions to steal from the government and Ulbricht. 
 
 In one transaction, Force, using his second alias, allegedly demanded Ulbricht pay him $250,000 in bitcoin not to disclose information to the government. Posing as a woman named Carla under the alias "French Maid," Force allegedly offered to sell Ulbricht information about the government's investigation in exchange for $100,000 worth of bitcoin. 
 
 Ulbricht paid the money, and Force deposited it into a personal account, IRS Special Agent Tigran Gambaryan wrote in an affidavit. Force allegedly converted some bitcoin to dollars and wired the money to his personal overseas bank account in Panama, the affidavit said. 
 
 Force also worked for and invested $110,000 in the California-based digital currency exchange company CoinMKT while still working for the DEA. The company featured Force in its pitches to venture capital investors as CoinMKT's anti-money laundering and compliance officer. 
 
 E-mails between Force and CoinMKT's CEO indicated that Force planned to stay at the DEA until the bitcoin exchange "hits it 'big time.' " 
 
 "I have a lot of down time at DEA so I am confident that I can handle all that needs to be done regarding Legal and Compliance on a daily basis," Force wrote. 
 
 Prosecutors say Force used his position at the DEA to steal money from accounts at CoinMKT. In one instance, Force allegedly directed CoinMKT to freeze a customer account. He then seized 223 bitcoins worth about $297,000 and transferred them to his personal Bitstamp digital currency account. He then exchanged the bitcoins for dollars and put the money in his personal checking account, court papers say. 
 
 This April 3, 2013 file photo shows bitcoin tokens in Sandy, Utah. (Photo: Rick Bowmer, AP) 
 
 Force, who earned about $150,000 a year as a DEA agent, made $757,000 in deposits to his personal bank account from April 2013 to May 2014, court papers show. During that time, Force paid off his mortgage and a government thrift savings loan while investing in real estate and bitcoin businesses, court papers say. 
 
 Authorities arrested Force on Friday. Force, a 15-year veteran, resigned from the DEA in May. He is in jail and will appear in court Thursday for a detention hearing. 
 
 Bridges, the computer forensics expert on the Baltimore investigation, allegedly stole more than $800,000 worth of bitcoin that he controlled during the Silk Road investigation and placed it into an account with Mt. Gox, a digital currency exchange in Japan. Silk Road reported a massive bitcoin theft Jan. 25, 2013, the same day Bridges attended an interview with the Silk Road administrator caught in the sting. 
 
 Bridges allegedly wired the funds to a personal U.S. investment account through nine transfers from March 6, 2013, to May 7, 2013. The final transfer on May 7, 2013, came two days before he personally sought a $2.1 million seizure warrant for Mt. Gox's accounts, court papers say. 
 
 Bridges, who joined the Secret Service in 2009, resigned from the Secret Service on March 18. He surrendered to authorities Monday and was released under pretrial supervision. 
 
 Bridges intends to fight the charges, his attorney Steven H. Levin said. Bridges "had an unblemished career in law enforcement for several years. He maintains his innocence," Levin said. 
 
 A bitcoin logo is displayed at the Inside Bitcoins conference and trade show April 7, 2014, in New York. Bitcoin users exchange cash for digital money using online exchanges, then store it in a computer program that serves as a wallet. The program can transfer payments directly to merchants or individuals around the world, eliminating transaction fees and the need for bank or credit card information. (Photo: Mark Lennihan, AP) 
 
 Read or Share this story: http://usat.ly/1bJtlJk ||||| UNITED STATES ATTORNEY’S OFFICE 
 
 Southern District of New York 
 
 U.S. ATTORNEY PREET BHARARA 
 
 FOR IMMEDIATE RELEASE Monday, January 27, 2013 http://www.justice.gov/usao/nys CONTACT: U.S. ATTORNEY’S OFFICE James Margolin, Jerika Richardson Jennifer Queliz (212) 637-2600 IRS-CI Gregory Tranchina (212) 436-1687 
 
 DEA Erin McKenzie-Mulvey (212) 337-2906 
 
 MANHATTAN U.S. ATTORNEY ANNOUNCES CHARGES AGAINST BITCOIN EXCHANGERS, INCLUDING CEO OF BITCOIN EXCHANGE COMPANY, FOR SCHEME TO SELL AND LAUNDER OVER $1 MILLION IN BITCOINS RELATED TO SILK ROAD DRUG TRAFFICKING 
 
 Defendants Sold Bitcoins to be Used to Buy and Sell Illegal Drugs Anonymously on the Silk Road Drug Trafficking Website Preet Bharara, the United States Attorney for the Southern District of New York, James J. Hunt, the Acting Special-Agent-in-Charge of the New York Field Division of the Drug Enforcement Administration (“DEA”), and Toni Weirauch, the Special Agent-in-Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the unsealing of criminal charges in Manhattan federal court against ROBERT M. FAIELLA, a/k/a “BTCKing,” an underground Bitcoin exchanger, and CHARLIE SHREM, the Chief Executive Officer and Compliance Officer of a Bitcoin exchange company, for engaging in a scheme to sell over $1 million in Bitcoins to users of “Silk Road,” the underground website that enabled its users to buy and sell illegal drugs anonymously and beyond the reach of law enforcement. Each defendant is charged with conspiring to commit money laundering, and operating an unlicensed money transmitting business. SHREM is also charged with willfully failing to file any suspicious activity report regarding FAIELLA’s illegal transactions through the Company, in violation of the Bank Secrecy Act. SCHREM was arrested yesterday at John F. Kennedy International Airport in New York, and is expected to be presented in Manhattan federal court later today before U.S. Magistrate Judge Henry Pitman. FAIELLA was arrested today at his residence in Cape Coral, Florida, and is expected to be presented in federal court in the Middle District of Florida. Manhattan U.S. Attorney Preet Bharara said: “As alleged, Robert Faiella and Charlie Shrem schemed to sell over $1 million in Bitcoins to criminals bent on trafficking narcotics on 
 
 the dark web drug site, Silk Road. Truly innovative business models don’t need to resort to oldfashioned law-breaking, and when Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act. We will aggressively pursue those who would coopt new forms of currency for illicit purposes.” DEA Acting Special-Agent-in-Charge James J. Hunt said: “The charges announced today depict law enforcement's commitment to identifying those who promote the sale of illegal drugs throughout the world. Hiding behind their computers, both defendants are charged with knowingly contributing to and facilitating anonymous drug sales, earning substantial profits along the way. Drug law enforcement’s job is to investigate and identify those who abet the illicit drug trade at all levels of production and distribution including those lining their own pockets by feigning ignorance of any wrong doing and turning a blind eye.” IRS Special-Agent-in-Charge Toni Weirauch said: “The government has been successful in swiftly identifying those responsible for the design and operation of the ‘Silk Road’ website, as well as those who helped ‘Silk Road’ customers conduct their illegal transactions by facilitating the conversion of their dollars into Bitcoins. This is yet another example of the New York Organized Crime Drug Enforcement Strike Force’s proficiency in applying financial investigative resources to the fight against illegal drugs.” According to the allegations contained in the Criminal Complaint unsealed today in Manhattan federal court: From about December 2011 to October 2013, FAIELLA ran an underground Bitcoin exchange on the Silk Road website, a website that served as a sprawling and anonymous black market bazaar where illegal drugs of virtually every variety were bought and sold regularly by the site’s users. Operating under the username “BTCKing,” FAIELLA sold Bitcoins – the only form of payment accepted on Silk Road – to users seeking to buy illegal drugs on the site. Upon receiving orders for Bitcoins from Silk Road users, he filled the orders through a company based in New York, New York (the “Company”). The Company was designed to enable customers to exchange cash for Bitcoins anonymously, that is, without providing any personal identifying information, and it charged a fee for its service. FAIELLA obtained Bitcoins with the Company’s assistance, and then sold the Bitcoins to Silk Road users at a markup. SHREM is the Chief Executive Officer of the Company, and from about August 2011 until about July 2013, when the Company ceased operating, he was also its Compliance Officer, in charge of ensuring the Company’s compliance with federal and other anti-money laundering (“AML”) laws. SHREM is also the Vice Chairman of a foundation dedicated to promoting the Bitcoin virtual currency system. SHREM, who personally bought drugs on Silk Road, was fully aware that Silk Road was a drug-trafficking website, and through his communications with FAIELLA, SHREM also knew that FAIELLA was operating a Bitcoin exchange service for Silk Road users. Nevertheless, SHREM knowingly facilitated FAIELLA’s business with the Company in order to maintain FAIELLA’s business as a lucrative source of Company revenue. SHREM knowingly allowed 
 
 2 
 
 FAIELLA to use the Company’s services to buy Bitcoins for his Silk Road customers; personally processed FAIELLA’s orders; gave FAIELLA discounts on his high-volume transactions; failed to file a single suspicious activity report with the United States Treasury Department about FAIELLA’s illicit activity, as he was otherwise required to do in his role as the Company’s Compliance Officer; and deliberately helped FAIELLA circumvent the Company’s AML restrictions, even though it was SHREM’s job to enforce them and even though the Company had registered with the Treasury Department as a money services business. Working together, SHREM and FAIELLA exchanged over $1 million in cash for Bitcoins for the benefit of Silk Road users, so that the users could, in turn, make illegal purchases on Silk Road. In late 2012, when the Company stopped accepting cash payments, FAIELLA ceased doing business with the Company and temporarily shut down his illegal Bitcoin exchange service on Silk Road. FAIELLA resumed operating on Silk Road in April 2013 without the Company’s assistance, and continued to exchange tens of thousands of dollars a week in Bitcoins until the Silk Road website was shut down by law enforcement in October 2013. * * * 
 
 FAIELLA, 52, of Cape Coral, Florida, and SHREM, 24, of New York, New York, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of operating an unlicensed money transmitting business, which carries a maximum sentence of five years in prison. SHREM is also charged with one count of willful failure to file a suspicious activity report, which carries a maximum sentence of five years in prison. Mr. Bharara praised the outstanding investigative work of the DEA’s New York Organized Crime Drug Enforcement Strike Force, which is comprised of agents and officers of the U. S. Drug Enforcement Administration, the New York City Police Department, Immigration and Customs Enforcement - Homeland Security Investigations, the New York State Police, the U. S. Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Secret Service, the U.S. Marshal Service, New York National Guard, Office of Foreign Assets Control and the New York Department of Taxation and Finance. Mr. Bharara also thanked the FBI’s New York Field Office. Mr. Bharara also noted that the investigation remains ongoing. The prosecution of this case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Serrin Turner is in charge of the prosecution, and Assistant United States Attorney Andrew Adams of the Asset Forfeiture Unit is in charge of the forfeiture aspects of the case. 
 
 3 
 
 The charges contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty. 14-024 ### 
 
 4 ||||| Phone banks dedicated to the Federal Bureau of Investigation are shown during a tour of the Multi-Agency Communications Center (MACC) at an undisclosed location in the Chicago suburbs May 17, 2012. 
 
 NEW YORK U.S. law enforcement authorities have shut down "Silk Road," an anonymous Internet marketplace for illegal drugs like heroin and cocaine and criminal activities such as murder for hire, and arrested its alleged owner. 
 
 The Federal Bureau of Investigation said Wednesday it arrested Silk Road owner, Ross William Ulbricht, 29, known online as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings. 
 
 Ulbricht, who holds an advanced degree in chemical engineering, appeared in federal court on Wednesday and a bail hearing was set for Friday. 
 
 His lawyer Brandon LeBlanc, a public defender, declined to comment. 
 
 Federal prosecutors in New York charged Ulbricht with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, the filing said. 
 
 "Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," FBI agent Christopher Tarbell said in the criminal complaint. 
 
 The site was used by "several thousand drug dealers" to sell "hundreds of kilograms of illegal drugs," he said. 
 
 The site, which has operated since early 2011, also offered tutorials on hacking ATM machines, contact lists for black market connections and counterfeiters, and guns and hit men for sale, according to the charges. 
 
 More than 900,000 registered users of the site bought and sold drugs using the digital currency Bitcoin. In recent media reports about the growing popularity of Bitcoin, the Silk Road website has emerged as part of a darker side to the use of digital currencies. 
 
 Through the site, according to the charges, users could buy drugs and have them shipped to an address. Investigators, posing as regular users on Silk Road, made more than 100 purchases of drugs, which were shipped to the New York area. 
 
 "DREAD PIRATE ROBERTS" 
 
 According to the complaint, Ulbricht, who shortened his alias from Dread Pirate Roberts to DPR when posting on Silk Road's forums, operated the site from San Francisco. 
 
 At times, he used computers at Internet cafes to access the servers running the website, which employed several technological tools to mask the location of its servers and the identities of its administrators and users. 
 
 The complaint described other aspects of Ulbricht's online presence: In a Google+ profile, he described himself as a fan of libertarian economic philosophy and posted videos from the Ludwig von Mises Institute, an Auburn, Alabama-based economics institute. 
 
 Reached by phone in Austin, Texas, Ubricht's parents said they had not known what their son was doing in San Francisco. 
 
 "He is a really stellar, good person and very idealistic," said Ulbricht's mother, Lyn Lacava. "I know he never meant to hurt anyone." 
 
 Ulbricht's father Kirk confirmed his son had received a master's in material sciences from Pennsylvania State University. His thesis was titled: "Growth of EuO Thin Films by Molecular Beam Epitaxy." 
 
 "He did amazing research on crystals and exotic materials they hoped would have some use for humans," Ulbricht said. "But it was very theoretical stuff." 
 
 The complaint against Ulbricht describes a darker side. During one correspondence with a Silk Road user, Ulbricht tried to call out a hit on another user with whom he had a dispute. That user, known online as "FriendlyChemist," was threatening to expose the identities of thousands of Silk Road users unless Ulbricht sent him money. 
 
 "I wouldn't mind if he was executed," Ulbricht wrote, offering personal details about his foe, including the fact that he was a married father of three, and the names of the city and province where he lived. 
 
 In a later post, Ulbricht wrote: "He is threatening to expose the identities of thousands of my clients." 
 
 "This kind of behavior is unforgivable to me. Especially here on Silk Road, anonymity is sacrosanct." 
 
 BITCOIN CONNECTION 
 
 During the raid, authorities seized $3.6 million worth of bitcoin, which was used instead of cash or credit cards to complete transactions on Silk Road. 
 
 The charges against Ulbricht said his website generated sales of more than 9.5 million bitcoin, roughly equivalent to $1.2 billion. 
 
 Authorities seized the currency by taking control of the digital "wallets" Silk Road used to store bitcoin. 
 
 In a corresponding civil asset forfeiture action, prosecutors claimed Silk Road and Ulbricht were liable to the government for the value of all transactions involving drug tracking and computer hacking, as well as for money laundering penalties, and a final amount would be determined at trial. 
 
 The raid on Wednesday was not the first time the U.S. government has made arrests related to Silk Road. 
 
 Earlier this year, authorities in South Carolina arrested Eric Daniel Hughes, known on Silk Road as "Casey Jones," and charged him in state court with drug possession. The Drug Enforcement Agency seized units of bitcoin, which Hughes allegedly used to purchase drugs from the online market. 
 
 Bitcoin, which has been around since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking the digital currency to Silk Road. 
 
 (Additional reporting by Daniel Levine in San Francisco; Editing by Jeffrey Benkoe and Bernadette Baum)
– What do you do if you're a federal agent who's part of an undercover operation to bust up a booming black-market drug-dealing website? One thing you don't usually do is skim a goodly portion of said site's digital currency into your pockets, but two former federal agents are accused of doing just that during their investigations that eventually led to the 2013 Silk Road sting, USA Today reports. Ex-DEA agent Carl Force and ex-Secret Service agent Shaun Bridges were charged with wire fraud and money laundering in a complaint unsealed today, the New York Times reports. The document for the recent bitcoin probe mentions that both agents were part of a Baltimore-based task force that ended up securing an indictment for Silk Road's "Dread Pirate Roberts," aka Ross Ulbricht. Force, a 15-year DEA veteran who resigned in 2014 when his alleged actions came to light, "stole and converted to his own personal use a sizable amount of bitcoins," the complaint notes, per the Times; he allegedly did so by fabricating online personas, adds USA Today. Bridges allegedly took $800,000 of the investigation's bitcoin under his jurisdiction, dumped it into a Mt. Gox account, then withdrew the funds from the Japanese currency exchange right before he went after the exchange with a seizure warrant; he had been with the Secret Service as a special agent for six years before resigning on March 18. Meanwhile, 25-year-old BitInstant co-founder Charlie Shrem became the first bitcoin felon to report to prison, starting his two-year sentence today at Pennsylvania's USP Lewisburg facility, Fortune notes.