Secret Service Agent Sentenced In Scheme Related To Silk Road Investigation
justice.gov
justice.gov
The submission title is clickbait, and does not reflect the article's contents. A better title would be "Secret Service Agent receives additional 24 month sentence for theft of 1,600 Silk Road Bitcoins".
If you're interested in the background for the case, WIRED has a good article from March 2015 [1], as well as a link to the pair's criminal charges [2] .
[0] https://www.justice.gov/opa/pr/former-secret-service-agent-s...
[1] https://www.wired.com/2015/03/dea-agent-charged-acting-paid-...
[2] https://www.scribd.com/document/260409270/Force-Bridges-Crim...
Apologies, I've stolen it myself https://news.ycombinator.com/item?id=15669759
We really need a long term storage solution for our data as a society or risk having another period of dark ages in the future.
Some steal little, some steal as much as the can. Some will get caught, others will get medals
The authors are simplifying, at the time he stole the coins they belonged to the Silk Road. Later the U.S. seized all bitcoins belonging to the Silk Road. Bridges lied about the coins and never gave the coins back to the govt, hence the theft.
The original crimes he plead guilty to in 2015 and was sentenced (money laundering, obstruction of justice). This new crime he plead guilty to a few months ago and was sentenced this week (money laundering).
The new crime is that after he had plead guilty in the 2015 case he was out on bond awaiting sentencing. During that time he took a backup of the Bitcoin private key for the 1,600 Bitcoin the USG had seized from him and moved them to an offshore account.
The USG went to sell or move the Bitcoin they had seized from Bridges and found all of the addresses empty
He was caught (again) and plead guilty (again) - and this time handed over all of his keys and hardware wallet and returned the 1,000 (on a hardware wallet) + 600 (in a market account) coins
As an aside - the obstruction of justice charge is insane. In his first theft, he transferred some coins to a personal MtGox account. He later learned that the USG was investigating MtGox and knew that eventually they would discover his MtGox account if it was seized. So he transferred his MtGox coin out and then sent them a seizure notice so that they would be tipped off to the investigation.
It had its intended affect - the DOJ called off its investigation into MtGox (this was mentioned in sentencing memo)
Ars do a good summary of the new charges and some of the other aspects of the case:
https://arstechnica.com/tech-policy/2016/07/corrupt-agent-wh...
edit: To add, we don't get many technical details of this case because of the plea - but i'm curious to know for certain how they traced the second theft back to Bridges and how they found his new Bitfinex account. It isn't hard to believe they always suspected he had taken them, and then worked backwards looking at his movement etc. - but for now we can mostly only speculate
Here is what we do know. A day before he was supposed to hand himself in, he was raided and they found id documents, offshore corporate records, a new passport, citizenship applications for his wife for a third country, a macbook with serial number filed off, etc. Its likely they subpoenaed bitcoin markets for those offshore entity names. It also looked like he was going to run:
http://ia601308.us.archive.org/17/items/gov.uscourts.cand.28...
This really tickled me for some reason. Does he know something that we don't?
If you're fleeing the country to evade imprisonment, why would you wait until the day before you're to be taken into custody to do it?
And it wouldn't make sense for someone about to go to jail for BTC related crimes to be mailing an encrypted thumb drive to a safe deposit box in a foreign country...
I think this just shows the weakness of out sentencing guidelines. People with a thousand dollars of drugs get decades and this guy gets 2 years tacked on?
No it isn't. It's USA, snatch a chain (not trivial considering the trauma to the people but still...) while having a gun and you may get 99 years (Texas). Steal millions or billions and get a sentence of months.
Aggravated assault/battery gone wrong has permanent consequences. Whether it's a $3 chain, a $3k necklace or a $30k car, when I steal it at gunpoint, an error in execution can result in loss of life. Life is not replaceable. There is no justice to be had, even if I'm caught.
An embezzlement or scam gone wrong results in a few more digits than intended getting shuffled around and an insurance claim gets filed; if it falls through maybe a company goes under, a retirement fund/livelihood is ruined but in the end, all the players victimized are free to try living again in some capacity and/or try to seek restitution. That's what justice is supposed to entail.
Knowing crime is a predictable behavior, we are much better off as a society guiding determined criminals towards the lesser consequences of white collar crime.
Would you rather someone open a $300k HELOC in your name or potentially kill you for the $20 in your wallet?
The reason for these harsh sentences isn't because they were "risking someone else's life", if it were we would have similar penalties for drunk driving.
The basis for these disparities are clearly classism, racism and political fear mongering.
It's funny because I would make the exact opposite choice than you. Of course it isn't about just losing a $20 from my wallet, its about having a gun put on you.
I'd rather lose my retirement than have anyone I know be robbed at gunpoint. And I believe there are a lot of people agree with me which is why the law is like that in Texas.
"After your first DWI offense in Texas, you may be fined up to $2,000 and spend between three and 180 days in jail."
These differences in penalties are not due a rational fear of the associated risks.
I only have so many working years left. Not enough to recover from such a scenario. But I'd still choose to be old and destitute than risk orphaning my children for want of $20. Keyword being risk-- I'm aware most muggings do not end violently.
A loss of your retirement funds could just as easily happen due to general economic instability. Medical bills. Bain Capital. But you get to try to pick up the pieces however you can...because however your loss was incurred, it didn't actually kill you.
The basis for these disparities has more to do with criminal intent than you're admitting...and everybody wanting tougher DUI laws until they get charged with one.
That is pretty obvious and condescending to say. Obviously everyone has a different risk preference. I was responding to a question (which was attempting to be rhetorical), not trying to tell you what your risk preference should be.
> The basis for these disparities has more to do with criminal intent...
If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
Disparities in punishments are highly driven by political fear mongering, classism and racism. (though this has somewhat lessened in recent years)
I wonder if you have ever lived day to day in a place where a few wrong words to virtually anyone would get you beaten with zero consequences to the attacker. I have and I absolutely don't miss it vs. living today in a place with virtually absolute physical safety but a more wild west financial industry.
> If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
Look at your state's sentencing guidelines for larceny. To use California's as an example, it doesn't matter if I steal $20 (petty larceny) or $20M (grand theft). Either way, it's the same crime, differing only in scale, and the sentencing guidelines proscribe probation to 3 years in prison, depending on the severity. Thus, a 2 year sentence for stealing 10 million dollars is an expected outcome. That is the punishment for larceny with criminal intent. Not having criminal intent gets its own category (receiving of stolen property) and sentencing of up to 1 year. 2 years is a long time to be institutionalized; it's not a trivial sentence. We often lose sight of that.
If I choose to muck things up by bringing a weapon into the mix and turning it into aggravated assault or robbery, the sentencing changes drastically. Nobody wants aggravated crime in their neighborhood, but we can tolerate a Madoff or Shkreli on the streets, even if their net damage is worse. This isn't about race or class, it's about what type of offender is less likely to be an immediate danger to our health and safety. Can a violent offender be rehabilitated? We don't know, and nobody wants to find out. So we lock them up for 99 years and revisit the matter once they're senile.
> A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
You're comparing three different things. Theft is theft. If you intend to steal anything, it's criminal intent. Threatening your victim or pointing a gun at them demonstrates even more criminal intent. Drunk drivers have no intent, they are drunk.
As destructive as drunk driving is, I meant what I said about everybody wanting more restrictive sentences until they find themselves on the wrong end of these laws. It doesn't take much to get charged with DUI, and even if nobody got hurt it's still career-ending. You did something you shouldn't have, there were no victims, but your life is now radically altered for the worse. It boils down to a tragically negligent decision, not criminal intent, which is why in the best of cases you end up on probation with misdemeanor charges and losing your job, in other cases Joe Sixpack hitting a pedestrian gets sentenced for manslaughter and the guy who deliberately drove into protesters is facing murder charges. There are distinct differences in intent and consequences for our actions. We sentence in line with them.
I'd agree that the sentencing for DUI fatalities is lighter than it should be (as it lets politicians and debutantes off the hook when they get caught themselves), and policing of the drug wars has proven to be very clearly class- and race-driven, but I'm not seeing how disparities in sentencing guidelines are inherently discriminatory towards any demographic. The message is clear: shoplift if you must, but don't you dare stick a gun in the cashier's face. This applies to everyone.
Before or after the heart attack for losing everything? Rent is due tomorrow and restitution 4 years later doesn't help much
No one was physically threatened.
No, they didn't. You are probably confusing a determination of what category it falls into in tax law as having a broader meaning that it does.
> How can you do "money laundering" by taking something that isn't a currency and moving its location, and at no point converting it into something that is recognized as currency?
The US “money laundering” statute concerns primarily “monetary instruments”, whose definition includes (among other things) “investment securities”. Nothing has to be or be converted to currency. See 18 U.S.C. § 1956.
It's a great read and a real page turner. It tells you about Ulbricht, his accomplices, everyone chasing him, etc. Reads like a novel.
[0]: https://www.goodreads.com/book/show/31920777-american-kingpi...
It's not written by him but it contains this:
>This article includes reporting by Nick Bilton, whose book on the Silk Road case will appear in 2016
If you're the one accounting for an arrested individual's belongings, it's very easy to falsify documents.
If thats the case, it's interesting that he wasn't aware of the fundamentals of the technology that enabled the people he was investigating.
Did you mean pseudoanonymity or pseudonymity, BTW? I can see the case for either/both, but the MSB is that is something hinges on distinctions as subtle as that, then it's too complex for 2017's general audience. UX accident waiting to happen.
Such as when the government withholds evidence to allow the defense to properly mount a defense.
Such as when the investigators of the case were part of a corrupt money laundering and extortion scheme, where they steal money intended for the government and concoct schemes to make the defendant look worse to a jury even if they can't charge him with those things, but those things are also used in sentencing rationale.
Such as when those exact investigators can't be brought in as witnesses because they botched the whole investigation for multiple field offices and government agencies.
Ross had zero wins in his motions, in his sentencing, in his appeals.
Amazingly discretionary how all of this is.
Right?
$90K for a non-entry level CBP officer is reasonable.
He likely got less time for agreeing to turn over his private key. That might have been a bad decision depending on how many years he would have gotten otherwise. Those 1,600 bitcoin are worth over $10 million at the moment.
More so, "possession of stolen property" is also a crime. The car doesn't magically become unstolen just because the theft went to jail.
This has absolutely nothing to do with civil forfeiture.
Civil forfeiture is when the getaway car is seized when you are robbing a bank.
Restitution is when you are ordered by a court to repay the victim for their losses that your criminal behavior caused. This case involved restitution, if he didn't comply with giving up the private keys he would be ordered to pay restitution.
Civil forfeiture doesn't impact restitution.
Or if he was careful about it he could tumble his coins, and then withdraw a small amount of cash every month or so for the rest of his life while still living in the US.
If he said "I lost the private key," he would have been ordered to pay restitution in cash. That means his assets (including his house) would be seized, when he gets out of jail his wages would be garnished forever, any inheritance he ever tried to claim would be seized, if he won the lottery that would be seized, his tax returns would be seized, etc. He would never be allowed to build any wealth at all until that restitution was paid, and it never would be because who makes enough money in their lifetime to pay a $10M restitution?
The coins are now completely worthless to him because those addresses will be watched forever, if any coins ever moved from that wallet, he would automatically go to jail. $10 million you can never spend or give away is not useful.
To get away with it, he would have had to deny all knowledge of the keys -- which he could potentially do with offline storage, at the expense of opening himself to perjury if he ever got busted -- but, importantly, never spend the contents in a way that could be linked back to him by following the metadata "paper trail". That last one is pretty difficult to achieve, especially when so many coins are involved and they're already "hot". A mixer could help obfuscate the trail -- especially if there were steps involving exchanging to other cryptocurrencies or fiats, but then trust becomes a real issue -- but given the current exchange rate, it would probably be worthwhile for the Feds to do some blockchain forensics to keep track of it all.
I don't think he would have ever got away with it.
Most systems have an identifier and a password, and sometimes 2FA.
For bitcoin, all you have is a 256 bit key. The key points to a 160 bit address (through hashing), and allows signing transaction from that address.
This is true security by statistical obscurity, as you can generate as many keys as you want by brute force, and all of them will match and give you control of a valid address, with a non-zero chance of it being an existing address with a balance. The chance is so low that it is completely acceptable though, at around one in 2^154.
This means the bitcoins people own aren't materialized, you can't delete, download or store them. They are simply a positive balance recorded on the blockchain for an address they control.
There is no cold storage for the coins, as they are always publicly available on the chain, and anyone with a valid key to that address can spend them. The only way to lock them down is to move them to an address that only you control.
When people talk about cold storage, they're talking about the private key. You can generate and store a key on a secured machine / device, allowing you to generate signed transactions for the corresponding address. You then copy that transaction to a internet enabled machine in a secure way, and broadcast the transaction to the network.
Edit: Just to clarify, I was just pointing out that the comment I replied to is tangential(1- he didn't steal from a criminal. 2- 'someone' can 'seize' a criminal's money without it being theft.).
He obviously stole -this isn't even a case of trying to steal; he stole, and got caught- and I don't get how he can get away with such a small punishment for stealing $10M+.
- For a white westerner: Crime, Murder, etc
- For the government/military: war, being a hero, etc
- For "brown" people in the wrong countries: Terrorism