Silk Road: Undercover agent admits stealing Bitcoin
bbc.co.uk
bbc.co.uk
>> "U.S. District Judge Ewing Werlein told Sam Jimmie Mann, 64, that he imposed a sentence at the lower end of the sentencing guidelines because of Mann's long record of good conduct before his crimes."
Which is a laughable farce because: The crimes he was found guilty of occurred continuously over three years. They were investigated a number of times and were infamous for being one of the worst speed-traps in the state going back two decades.
>> "That town has been known as a speed trap for 20-plus years and this county doesn't need a speed trap. And the county doesn't need the liability associated with this type of contract," Wright says.
Wright was a local sheriff, and a former Texas Ranger who had previously investigated Mann but was unable to make a good criminal case against him.
>> "Mann and Davis ran what prosecutors called their "own private toll road," on a section of U.S. 59 in Kendleton, a town of about 500 about 40 miles southwest of Houston, between November 1997 and May 2000."
To translate, they were stopping motorists, writing bogus tickets, using fake warrants, threatening arrest, demanding cash, taking any cash they found, and keeping some of it for themselves. They were IRL brigands.
http://www.yourhoustonnews.com/archives/sheriff-sticks-to-hi...
http://www.chron.com/news/houston-texas/article/Kendleton-s-...
> I imagine a smart, experienced, undercover DEA agent would be very difficult to catch breaking the law.
I imagine so, especially if you don't look too hard.
Same thing whenever somebody goes on a shooting rampage. All the neighbors either say "I always knew there was something strange with that boy" or they say "I can't believe it, he was such a sweet kid".
/snark
The smarter the criminal the more likely he is to engage in this type. Most criminals are pretty stupid.
I expect that this agent has been a bad apple for some time, and has only recently got lazy, or maybe technology was better than he thought it was.
Also, since there was a plea agreement (see the section subtitled "Plea agreement") it's highly unlikely he'll get 20 years.
Among the crimes he confessed to, Force said he had agreed to a contract with 21st Century Fox last year to help make a film about the Silk Road investigation, without the permission of his supervisors. That deal called for him to be paid up to $240,000.
Force also invested in a company that brokered Bitcoin and served as its chief compliance officer while still with the DEA.
During his time with the company, Force used his position to seize $300,000 from a customer and transfer it to his private account, authorities said.
This guy was dirty, probably from the get go. It really makes you wonder if this will give Ulbricht more life in a new trial. I mean, this guy did stuff that was flat out against the law, and really compromises his integrity with regards to the trial. There's no telling what other sketchy stuff he did to get this conviction.
And he's not the only dirty cop who was on the case either:
http://www.coindesk.com/secret-service-plead-guilty-silk-roa...
US Secret Service special agent Shaun Bridges will plead guilty to charges of money laundering and wire fraud stemming from the government investigation into the illicit online black market Silk Road.
This case is rife with corruption
From what I can tell, this case was over as soon as they managed to get Ulbricht's unlocked laptop.
Someone else has already provided the indictment in the New York court case. http://www.plainsite.org/dockets/download.html?id=126792875&... Nowhere in the New York indictment is Ulbricht charged with attempted murder or murder-for-hire. The murder-for-hire charge was part of a Maryland court case in which Force and the other convicted investigator participated and which was subsequently dropped because of their malfeasance. See Count 2 of the Superseding Indictment. https://ia601904.us.archive.org/1/items/gov.uscourts.mdd.238....
Other commenters have already pointed out your error. Don't compound it by trying to argue legal semantics you clearly don't understand.
>Force was involved in only a single criminal case (the alleged murder-for-hires), and that case was dropped when Force and another investigator in that case were arrested.
>>In sentencing, prosecutors submitted a number of comments alluding to Ulbricht's alleged but not proven in trial murder for hire plots. The assumed motive for these alleged murder plots was the actual theft of bitcoins which we now learn was perpetrated by government agents and witnesses against Ulbricht.
Here is the letter. http://cryptome.org/2015/05/ulbricht-256.pdf
Is it of no consequence that these comments rely upon a farcically compromised investigation?
Again: Ulbricht used full-disk encryption and nothing else to protect his data (OPSEC lesson: don't do that), and was captured with his laptop unlocked. There was a glittering dragon hoard treasure trove of evidence on that thing. It's practically the case that everything he was charged for, he confessed --- in detail --- to his journal about. His journal! The case was over as soon as they imaged the laptop.
Where/what is the statutory allegation? If you have a better copy that can be searched that would be appreciated.
It is literally the opposite of what you've been claiming it is. It was ventured by the prosecution as a formal piece of the case. The prosecution actually staked part of their case on it being true.
>It is literally the opposite of what you've been claiming it is.
I'm going to borrow a quote from you here:
>Read the actual indictment. It's staggering to me how people can be so firmly convicted of things about this case that are refuted by even a casual reading of the primary sources. Come on.
Indeed. Come on. You're mistaken. Stop digging. I hope this saves you further embarrassment. No need to thank me now. Good day.
>It was ventured by the prosecution as a formal piece of the case. The prosecution actually staked part of their case on it being true.
Sounds like a good argument for re-sentencing or maybe even a new trial; and also a good argument for prosecutors not to try to include such shabby evidence in their cases lest they risk an otherwise strong case.
There is no need for you to repeat that statement again without showing me where in the indictment document Ulbricht is actually indicted with a crime entitled "murder-for-hire". I don't see it. I've given you a link to a copy of the indictment for USA v. Ulbricht, Case No. 1:14-cr-00068-KBF, New York Southern District Court
http://www.plainsite.org/dockets/download.html?id=126792875&...
Is that the one to which you keep referring?
And I've asked you to point out where in the document the indictment for "murder-for-hire"; I certainly could've missed it and I wouldn't mind clearing it up.
You're hung up on whether he's charged with murder, conspiracy, hacking, or whatever. I'm not. I don't care. The only thing I'm here to rebut is the pervasive meme that the Ulbricht murder-for-hire scheme was introduced informally by the prosecution in order to taint the jury and the judge. As you can plainly see, it wasn't: it was introduced in one of the most formal ways possible, in a manner that meant that its rebuttal at trial would have harmed the prosecution's case.
What did Force say at Ulbricht's trial?
As a Bitcoin novice, I was left wondering: is it a common misconception that Bitcoin is anonymous? Or rather, just how easy is it to trace someone's transactions if you know their wallet ID?
[0] http://www.wired.com/2015/04/silk-road-1/ [1] http://www.wired.com/2015/05/silk-road-2/
A mixing service will basically perform money laundering for you, disrupting the direct path back to your initial transaction.
tl;dr: It can be anonymous, but by default it's not really.
On a practical level its anonymous. Its trivial to move coins around to various exchanges that makes it difficult or impossible to trace. Jurisdictions come into play here as well. If I steal some coins in the US and move them to a Latvian exchange, then a Russian one, then a Swiss one, then finally cash out in a Chinese one, who will be even able to track me down? Who will respect all these warrants?
A real life example is what's going on with cryptolocker-like malware. People are paying hundreds of dollars in bitcoins to these ransomwares for almost two years now, yet there have been zero arrests.
I imagine laundering bitcoins is easy to do as well by trading value in a shared pot. Hell, you could just trade one 'hot' wallet for another and again and again. Now the path is even more obfuscated.
Reminds me of ATM skimmers, also particularly terrifying. I imagine they are kept at a certain degree of popularity for the same reasons.
One of my chief complaints about Windows 10 is that it does absolutely nothing to solve the "download invoice.pdf.exe" problem Windows suffers from. At least in Linux that file needs to be given a +x and in OSX non-Apple signed executable need to be approved in the system settings. Windows is still the wild west. Its a shame MS didn't use Win10 as a way to lock things down to address today's threats. Signature based AV cannot move faster than a certain speed and malware like Cryptovariants move much, much faster than that. Heuristics are terrible for some reason on popular AV's and everyone is constantly getting infected.
Yeah, leave exceptions for power users and enterprise, but by default it should not allow untrusted unsigned content to run by default.
I told myself that if I ever start my own company that actually allows me to quit my dayjob it would be 100% OSX environment on the client-side. MS just doesn't take security very seriously, its targeted badly, and even the pro-netsec people at MS that want to be better with security are knocked down by the other politics of having 20-30 years of legacy support for ancient apps and not breaking anything. Its just not able to keep up with modern threats. Its a shame Win10 isn't shipping with a Windows store only policy for installs and some kind of OSX-like exception in the control panel for whitelisting. Devs would hate, IT departments would lose their shit, but in a few months we'd all be used to it and the internet would be much safer.
Did they ever fix the RTL character problem, where you can name a file something[RTL]gpj.exe and it will look like somethingexe.jpg?
They don't force you to, though.
(That's the 770 BTC payment references in this article: http://motherboard.vice.com/read/how-a-two-timing-dea-agent-...)
So if you want anonymity you have to be careful that no one can connect you to a wallet ID.
If you know someone is connected to a given input, then you can trace them through any outputs to other parties.
So it's not quite as simple as a "wallet ID". The transactions in given Bitcoin wallet software may be connected to each other (by the mechanism I describe above), but are not necessarily connected, particularly if you generate a new address for each transaction for which you are the receiving party (and/or take additional precautionary measures). It's entirely possible to have a wallet full of untraceable transactions.
It has to do with that if Alice gets a Bitcoin by selling uncensored newspapers in China, transfers it to wallet A in the tumbler, and then the tumbler transfers that to Alice's Coinbase account, Alice is going to jail. The transaction record tells us that Alice's Bitcoin came from the uncensored newspaper through an intermediary. The Chinese government can then arrest Alice on suspicion of selling illegal newspapers. At that point Alice must either prove somehow that wallet A in the tumbler is owned by the person who really sold the newspapers (which will be impossible), or admit that she sold the newspapers and used a (bad) tumbler in an attempt to hide her transaction. That is to say, if there's a chain of transactions connecting Alice to the newspaper sale, the tumbler has provided Alice no anonymity.
Contrast this with a more realistic tumbler design: the tumbler owner (let's call him Troy) deposits a bitcoin from Coinbase in wallet A. Alice is the first user of the tumbler, so she gets a bitcoin selling uncensored newspapers in China and deposits it in wallet B. The tumbler owner then forwards the coin from wallet A (minus a fee) into Alice's Coinbase account. Now Bob, as the second user of the tumbler, comes along and deposits a coin he got from selling LSD on the Silk Road into wallet C. Troy then sends the coin Alice got from selling uncensored newspapers (minus a fee) to Bob's Coinbase account.
Alice now has a coin from Coinbase, Bob has a coin from Alice's sale of an uncensored newspaper in China, and Troy the tumbler operator has a coin sitting in wallet C waiting for the next person to use the tumbler. The Chinese government has no way to track the transactions to Alice. IF Bob lives in China the Chinese government could come and accuse him of selling uncensored newspapers, but the accusation would make no sense; he has alibis for some of the days newspapers were sold, he's not educated enough to write, etc., because he didn't sell the newspapers. Bob can even say he used a tumbler, but he used it because he purchased a lot of bondage pornography: embarrassing, but not illegal. But more likely than not, Bob won't even be accused of Alice's crimes, either because he lives in a different country or because the accusations won't make any sense. Both Alice and Bob's anonymity has been protected.
I assume Troy is hidden to the authorities, who only have the Blockchain ledger and no other information to go on? That's waht I meant by "concentrated" above -- how likely is it that the Chinese government would find Troy and extract the information out of him with legal threats or with a heavy wrench?
However, there area number of attacks possible from Troy's perspective. He can keep a transaction history and use it to blackmail Alice and Bob. He can simply keep coins sent to the tumbler and send out nothing. It's very important that Troy be a trusted actor.
Blackmail. This is (one of many) reasons it's important that Troy be a trusted actor.
There's https://github.com/chris-belcher/joinmarket, which requires no trust in the other participants, and all of them would need to collude to identify you.
Not relevant to the example, but this is totally illegal.
For a technical solution on bitcoin privacy and providing anonymous bitcoin transactions, see: http://zerocoin.org/
It felt to me like Feds wanted to do everything in their power to put him down for lifetime, and I wouldn't be surprise if more skeletons come to the light.
Namely, the part about him hiring a hit man was very fishy. First it was his coworker that agreed to helped Feds to play dead, but then you had some bikers performing multiple hits (supposedly all successful) on people Ross wanted dead. Uhm, so basically a motorbike gang agreed to play along with Feds, plus many "victims" agreed to disappear and play dead for months so that Ross is convinced all that money he paid the gang were for successful hits. Maybe in a Grisham book, but in real life things like that don't line up this good.
Then Feds didn't hesitate to tell judge about all this, but then they decided not to use "evidence" of Ross ordering hits, and focus only on his drug business.
So basically you have a judge that looks at a person that supposedly order multiple hits, who also created website to exchange some drugs. No wonder he got lifetime behind bars.
I don't think drug dealers go to jail for lifetime.
Another thing that struck me was allowing testimony of parents of a teen that drug himself to dead. Seriously? Sure, had not SR, he probably would have never found access to drugs somewhere else.. NOT. How about looking into the quality of their parenthood? Environment he lived in? His school and friends problems? etc etc. But no! Just exactly when was the last time you seen a family trying to shut down Ford car company and put the CEO behind bars because their two young children burnt to death in a car accident caused by a Ford vehicle??
EDIT: my point about Ford was that when did you see last time a car company CEO being found guilty and put in jail for lifetime because his company's vehicles are responsible for tens of thousands of deaths, including young children.
(never)
This notion that the DOJ tainted the case by telling the judge about a murder-for-hire scheme without charging it is a meme that simply will not die. By repeating it, you're essentially broadcasting that you didn't even bother to read the Ulbricht indictment.
Are you joking?
I've always secretly wanted the death penalty (insert other serve punishment) for cases like these. This type of corruption & abuse of power systematically reduces our overall faith in the government and should be treated as a high crime (i.e. Treason). We commonly use deterrence as a means to justify strict punishments when convicting drug crimes, but politicians\law enforcement\etc seem to avoid these dragnets. Why can't we hold them to a higher standard? I mean... there's something 'bone chillingly' wrong about an oath-taking public servant poisoning the well.
/rant
>Why can't we hold them to a higher standard?
Because we trust them to police themselves, their peers.
Is anyone really surprised by this turn of events? I thought it was common knowledge that the DOJ is irredeemably corrupt, that they don't care about the rights of their citizens (let alone human rights outside our borders) and that they cannot be trusted with anything.
I always thought everyone knew that neither the FBI/NSA with their massive domestic spying campaigns, the DEA with its fallacious war on drugs, nor local police with their rampant violence (esp. towards minorities) can or should ever be trusted.
Did people really not expect this outcome?
Civil forfeiture really should have made the case that law enforcement is nothing but crooks and scoundrels.
That is essentially the opposite of the common knowledge of the DOJ. In the legal world, they are seen as very good lawyers who only take on cases they can win. They are also civicly minded because they could make WAY more money in private practice.
Sounds like you are treating people who disagree with you on some issues as irredeemably evil.
And I think it's equally as feasible to suggest they give up the money in private practice for the power, not out of some moral calling. Federal prosecutors/investigators are some of the most powerful people in this country; they can destroy lives at will with a single glance. That is attractive to many kinds of people, some of whom aren't well-meaning selfless volunteers.
If you want civicly minded people look to the public defender's office, that's full of heroes who do the right thing without high pay or wielding enormous power, just the satisfaction of knowing they may have helped save innocent lives.
The legal world. Hah. Like the legal world is seen by the public as any measure of integrity. The DOJ does all sorts of stupid shit like the Aaron Swartz debacle and the public hates them for these sorts of tactics.
Indeed, that is precisely what I meant. I'm not interested in the US Attorney's office when I speak of the DoJ.
You might as well say anyone who works for Google or Facebook deserves to hang for spying.
Even if you strongly disagree with their views and actions it isn't corruption.
Cartoonish villians? No. It's more the opposite; they think of themselves as cartoonish superheroes and have a hard-on for "punishing the wicked", and often forget that the wicked aren't always so wicked and maybe the extreme and brutal punishment associated with even being touched by the US justice system isn't appropriate -- but why give up a case you can win and tank your career? The guy in the cubicle next door is happy to get the commendation and promotion if you won't take it.
What's more addicting: money, or the ability to ruin the lives of people you personally despise?
I'm talking more abstract: Police brutality against anyone poor or black, the FBI's war on hackers by exploiting the vagueness of the CFAA, etc.
Sometimes the DOJ dogs (including federal prosecutors) direct this incredible destructive capability at people who, arguably, deserve it. But not always.
My question wasn't about Ulbricht. It was simply, "Is anyone really surprised that Force (and other agents involved in this case) turned out to be corrupt?" I'm only surprised they're being prosecuted for it. :P
The confession is a charade, usually coordinated in advance with the prosecution. Almost never is the confession made because the defendant suddenly realizes that wrongness of their actions, and simply wants to avoid burdening everyone with the effort of a lengthy trial. Instead, the defendant is threatened with a terrible punishment, and told that unless they cooperate the chances are high (regardless of their actual guilt) that this punishment will occur. They are offered (or offer on their own) a "plea bargain", where if they confess to a subset of the crimes with which they are charged, they can willingly accept a smaller (though often substantial) punishment.
The contents of the admission are a negotiation between the defendant and the prosecutor. If the prosecutor demands that you confess to being a witch, and that if you don't confess to being a witch there is a high likelihood that you will spend the rest of your life in jail being raped by unpleasant men, you don't quibble about whether or not you are actually a witch. You weigh the chances of a potentially unjust conviction with a horrible outcome against the chances that your lawyer will convince a jury that the charges are false, and if the odds are against you, you confess to being a witch in all the detail the prosecutor requests.
The harsher the punishment the defendant willingly accepts in the "plea bargain", the more likely the admission was made under the duress of an even more severe punishment. The accuracy of the details of the confession are equivalent to a confession under torture. In torture, the punishment begins and in agony you are willing to confess to anything in hope that the punishment will stop. In the plea bargaining system, you are threatened with a terrible punishment and confess to anything in hopes that the punishment will not start. In neither case should the details of the confession be treated as true.
So while I presume this agent did lots of bad things, and probably stole the bitcoins in question, realize that the details of the admission are a just a plausible story written by someone wielding great power, signed under duress by a defendant justifiably scared of this power. In the absence of outside evidence, the exact details should no more be treated as "true" than the dying confessions of a man broken on the wheel.
I am curious if we have a lawyer here who can comment on this from a legal perspective. Again, Common Law and codified law may be very different here.
Same here.
Should the US prosecutor be allowed to withhold evidence of this crime when the SilkRoad founder was tried and sentenced..I say no as oges towards the idea of entrapment, etcf
The murder-for-hire charges were brought up during the sentencing phase (after guilt was adjudicated). Normally, judges generally use the Federal Sentencing Guidelines to determine the length of a federal prison sentence, so that sentences are "normalized" across crimes and defendants. (The Guidelines are no longer mandatory, after the 2005 Booker case.) Judges will also consider evidence calling for a reduced (or extended) sentence than the Guidelines would impose.
In this case, the Guidelines called for life imprisonment. The murder-for-hire charges were introduced at the sentencing hearings to counter evidence provided of Ulbricht's good character. Even if the murder-for-hire charges had not been brought up at sentencing, Ulbricht still faced life in prison. Bringing them up in sentencing merely sealed his fate.
So you keep saying.
>The murder-for-hire charges were brought up during the sentencing phase (after guilt was adjudicated).
Guilt of crimes which according to you are not related.
>The murder-for-hire charges were introduced at the sentencing hearings to counter evidence provided of Ulbricht's good character.
Maybe they affected sentencing then? And since the testimony has been reduced from "let's convict Ulbricht of murder for hire" to "character witness hearsay from disgraced and corrupt federal agents who themselves provoked the alleged crimes by stealing many hundreds of thousands of dollars from Ulbricht"; can sentencing be revisited by the court, or is a new trial required?
So you keep saying.
I'm not sure what you're arguing here. You agree in other threads that Ulbricht was charged of separate crimes in New York and Maryland courts.
Guilt of crimes which according to you are not related.*
I'm not saying the crimes were unrelated at all. I'm saying that the sentencing phase of a trial is different from the guilt phase. In sentencing hearings, the normal rules of evidence are relaxed, so evidence that was excluded from trial can be considered.
Maybe they affected sentencing then?
That's exactly what I'm saying, and that's the reason those allegations and underlying evidence were introduced at the sentencing hearing: to show that Ulbricht deserves to be locked up for a long time.
And since the testimony has been reduced from "let's convict Ulbricht of murder for hire" to "character witness hearsay from disgraced and corrupt federal agents who themselves provoked the alleged crimes by stealing many hundreds of thousands of dollars from Ulbricht"; can sentencing be revisited by the court, or is a new trial required?
Separate case. Ulbricht was convicted of several counts, each of which by themselves would justify a 20+ year sentence or life sentence. It wasn't even necessary to bring up the murder-for-hire allegations. The prosecution only did that because Ulbricht's lawyer tried to argue that he was really just a good guy.
The sentencing can be appealed, but there's a 0% chance that he would succeed at reducing the sentence given that it's well within the established guidelines for crimes of this nature. It's also possible to appeal the underlying conviction, but there's almost 0% chance of that as well, since the murder-for-hire allegations and the acts of the corrupt Maryland federal agents were not relevant to the New York convictions.
But the prosecutors' letter to the judge for sentencing was peppered with comments alluding to the alleged murder plots, which are directly related to the work done on the case by agents Force and Bridges. http://cryptome.org/2015/05/ulbricht-256.pdf