Ex-DEA Agent Pleads Guilty to Stealing over $700,000 in Silk Road Case

Carl Mark Force IV, the “lead undercover agent” in the Silk Road case against Ross Ulbricht has pled guilty to money laundering, extortion while acting as a public official and obstruction of justice as part of a plea deal.

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Ex-DEA Agent Pleads Guilty to Stealing over $700,000 in Silk Road Case

Carl Mark Force IV, the “lead undercover agent” in the Silk Road case against Ross Ulbricht has pled guilty to money laundering, extortion while acting as a public official and obstruction of justice as part of a plea deal.

Force faces up to 20 years in prison on each of the three counts.

In his plea agreement, Force, admitted to taking money from the head of the underground marketplace the Silk Road and then obscuring that fact before withdrawing money from his own bank account in exchange for inside information and other services. Force states:

“[Ross Ulbricht] paid me on two occasions in the summer of 2013. One payment was 400 bitcoin in June 2013 for fraudulent identification documents, and the other payment was 525 bitcoin in August 2013 for 'inside' law enforcement information about the investigation into the Silk Road. Rather than properly documenting these communications and payments and safeguarding the payments in a government account, I knowingly and intentionally took custody of both the 400 bitcoin and 525 bitcoin payments and converted them to my own personal use by depositing them into my own personal account and converting them to dollars that I ultimately withdrew from my personal checking account at Bank.”

Last month, Force's former co-defender former Secret Service agent Shaun Bridges also reached a plea deal with prosecutors for his role in allegedly draining Silk Road dealer's accounts and placing them under his own control. While both agents' then-alleged actions were known at the time, Ross Ulbricht's defense attorney Joshua Dratel was prevented from mentioning it to the jury. After news came out about Bridges' plea deal, Dratel called it “unfair” in a statement and has filed an appeal.

“If it’s accurate that Mr. Bridges is pleading guilty, it removes any question about the corruption that pervaded the investigation of Silk Road by law enforcement agents with unique, unrestrained, and continued access to the Silk Road site and administrative functions.  As a result, it undermines completely the integrity of the government’s entire investigation, which, as we set forth in our post-trial motions, was in so many ways intertwined with the Baltimore investigation the government now seeks to distance itself from for obvious strategic reasons.  Mr. Bridges’s relatively quick guilty plea would also reinforce the unfairness of not adjourning Mr. Ulbricht’s trial until after the corruption investigation concluded, which would have afforded him an opportunity to use that information in his defense at trial.”

Shaun Bridges faked a murder allegedly ordered by Ross Ulbricht, an act that was used to deny Ulbricht bail, although Ulbricht was never charged with a crime related to the alleged incident.

Force admits that he had multiple accounts and identities on the Silk Road, only one of which was authorized by the authorities. He also admits to using some of the stolen funds to become the primary investor in CoinMKT, a digital currency exchange that is still operating. Soon after, he acted as the “de-facto” compliance officer for the company without proper permission and used this position to steal from at least one user. Force describes the incident:

“During my affiliation with CoinMKT an account holder at CoinMKT named R.P. was brought to my attention. I directed CoinMKT to freeze approximately $337,000 in cash and digital currency funds and transfer them to the DEA. I agree that I had no legal basis for doing so. CoinMKT effectuated this transfer at my direction and transferred the funds to an account over which I had control. But instead of putting funds into a government account, I put them into my own personal digital currency accounts where I converted them to my own use. I then wrote reports designed to make it look to my superiors as if only $37,000 in cash had been seized from R.P. not $300,000 worth of digital currency.”

In another brazen abuse of power, Force admits fabricating a subpoena in order to get his personal funds unfrozen from another company:

“On approximately February 12, 2014, Venmo froze my account. Shortly thereafter I used my supervisor's signature stamp without his authorization on an official administrative subpoena and issued it to Venmo, directing that it unfreeze my personal Venmo account. I then attempted to cover up my improper use of the subpoena by placing prior versions in burn boxes and directing Venmo to disregard the subpoena and not to contact anyone at the DEA about it. I also contacted another agent on the task force, S.R., about seizing Venmo's accounts for being an unregistered money service business.”

Most interesting to those hoping for an appeal in the Ross Ulbricht case is Force admitting in the plea deal that his involvement obstructed the case. He said:

“I further agree that my activities obstructed, influenced, and impeded the Baltimore Grand Jury related to its Silk Road investigation as well as its resulting case in the District of Maryland against [Ross Ulbricht] by, among other things, (1) obstructing and impeding the ability of the investigation to fully utilize my work product after my fraud, and (2) obstructing, influencing, and impeding the Grand Jury's investigation into [Ross Ulbricht]. in the District of Maryland. I agree that I acted corruptly in obstructing, influencing, and impeding the Grand Jury's Silk Road investigation.”

As part of the agreement, Force will surrender over 600 ill-gotten bitcoins as well as over US$200,000 in fiat cash. One minor note is that Force's plea deal states that he will forfeit 46 BTC frombut it currently holds 49.999 BTC according to blockchain.info.

Force is scheduled to be sentenced on October 16. Ross Ulbricht was sentenced to life in prison without the possibility of parole, pending his appeal. You can donate to the Ross Ulbricht defense fund here.

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