The news of the arrest of two government agents, Carl M. Force and  Shaun W. Bridges, involved in the Silk Road case, signals just how corrupt the Silk Road investigation was.

This come directly from the Department of Justice press release:

 In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation.

Note well what Ross Ulbricht’s attorney stated in his opening remarks during the trial of Ross:

 And at the end — I will get to the middle as well, but at the end he was lured back by those operators to be in a position, that you heard about from the prosecutor in that library that day, to take the fall for the people operating the website. Because they had been alerted that they were under investigation. They had been alerted that the walls were closing in on them. They had been alerted that time was scarce for them to escape. And Ross was the perfect fall guy because, after all, Silk Road was his idea. He was also involved in Bitcoin. He was an investor in Bitcoin. He was a trader in Bitcoin. You will hear about that. So the connection of Bitcoin and Silk Road, again, made him the perfect fall guy. So other than that day of arrest we’ll see what connects Ross to the operation of Silk Road, whether it’s just a digital contrivance that left him holding the bag when the real operators of Silk Road knew that their time was up.

Get a load of some of the other criminal activities the DOJ alleges Force conducted (my bold): Against the State: An ... Rockwell Jr., Llewelly... Best Price: $5.02 Buy New $5.52 (as of 11:35 UTC - Details)

According to the complaint, Force was a DEA agent assigned to investigate the Silk Road marketplace.  During the investigation, Force engaged in certain authorized undercover  operations by, among other things, communicating online with “Dread Pirate Roberts” (Ulbricht), the target of his investigation.  The complaint alleges, however, that Force then, without authority, developed additional online personas and engaged in a broad range of illegal activities calculated to bring him personal financial gain.  In doing so, the complaint alleges, Force used fake online personas, and engaged in complex Bitcoin transactions to steal from the government and the targets of the investigation.  Specifically, Force allegedly solicited and received digital currency as part of the investigation, but failed to report his receipt of the funds, and instead transferred the currency to his personal account.  In one such transaction, Force allegedly sold information about the government’s investigation to the target of the investigation.  The complaint also alleges that Force invested in and Three Felonies A Day: ... Harvey Silverglate Best Price: $7.30 Buy New $1.99 (as of 11:00 UTC - Details) worked for a digital currency exchange company while still working for the DEA, and that he directed the company to freeze a customer’s account with no legal basis to do so, then transferred the customer’s funds to his personal account.  Further, Force allegedly sent an unauthorized Justice Department subpoena to an online payment service directing that it unfreeze his personal account. 

The case against Ross was contaminated from the start. Ross should be immediately released from prison in the face of these developments. There is simply no way that truth from fiction can be separated when such a bad actor was at the core of the investigation.

It turns out that the government only informed Ulbricht’s attorney 5 weeks before trial that investigators involved in the case were being investigated themselves for stealing Silk Road bitcoins, money laundering, blackmail etc.When Ulbricht’s attorney, Josh Dratel, asked that the trial be delayed until the investigation into the investigators was completed so that he could use details of the investigation in court, prosecutors objected and the judge ruled in favor of the prosecutors. So much for Ulbricht being able to present as part of his defense the facts of the multiple Silk Road-related criminal activities of the investigators.

Here’s Dratel’s statement regarding the new developments (bold in original): Licensed to Lie: Expos... Sidney Powell Best Price: $21.98 Buy New $48.99 (as of 06:15 UTC - Details)

The government’s considerable efforts at keeping this monumental scandal from being aired at Ross Ulbricht’s trial is itself scandalous.

In addition to:

1. Keeping any information about the investigation from the defense for nearly nine months;

2. then revealing it only five weeks prior to trial;

3. then moving to keep sealed and secret the general underlying information so that Mr. Ulbricht could not use it in his defense at trial;

Obama’s Enforcer... von Spakovsky, Hans Best Price: $3.79 Buy New $13.19 (as of 11:20 UTC - Details) 4. then stymying the defense at every turn during trial when the defense tried to introduce favorable evidence;

the government had also refused to agree to the defense’s request to adjourn the trial until after the indictment was returned and made public – a modest adjournment of a couple of months, since it was apparent that the investigation was nearing a conclusion.

Throughout Mr. Ulbricht’s trial the government repeatedly used the secret nature of the grand jury investigation as an excuse to preclude valuable defense evidence that was not only produced in discovery, independent of the investigation of Mr. Force, but also which was only at best tenuously related to that investigation.  In that manner the government deprived the jury of essential facts, and Mr. Ulbricht of due process.

In addition, the government failed to disclose previously much of what is in the Complaint, including that two federal law enforcement agents involved in the Silk Road investigation were corrupt.  It is clear from this Complaint that fundamentally the government’s investigation of Mr. Ulbricht lacked any integrity, and was wholly and fatally compromised from the inside.  Suicide Pact: The Radi... Napolitano, Andrew P. Best Price: $0.25 Buy New $2.84 (as of 04:15 UTC - Details)

Also, it is clear that Mr. Force and others within the government obtained access to the administrative platforms of the Silk Road site, where they were able to commandeer accounts and had the capacity to change PIN numbers and other aspects of the site – all without the government’s knowledge of what precisely they did with that access.

In light of the information provided in the Complaint, it is now apparent to all just how relevant some of the issues raised by the defense at trial were, including:

1. The payment by Dread Pirate Roberts to a law enforcement agent for information about the investigation;

2. The ramping up of the investigation of Mr. Ulbricht in mid-2013, soon after that paid information began  flowing;

3. The creation of certain evidence at trial, such as the 2013 journal that conveniently begins – again – in Spring 2013, after the corruption alleged in this Complaint ripened.

As the evidence at trial – particularly from the government’s law enforcement witnesses – demonstrated, the Baltimore investigation and agents were inextricably involved in the evolution of the case and the evidence, as well as with alerting Mark Karpeles that he was under investigation, and meeting with his lawyers and exchanging information.

At Mr. Ulbricht’s trial, knowing full well the corruption alleged in the Complaint made public today, the government still aggressively precluded much of that evidence, and kept it from the jury (and had other similar evidence stricken from the record).

Consequently, the government improperly used the ongoing grand jury process in San Francisco as both a sword and a shield to deny Mr. Ulbricht access to and use of important evidence, and a fair trial.

Joshua L. Dratel

Reprinted from Target Liberty.

The Best of Robert Wenzel

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$bio: Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.com and author of The Fed Flunks: My Speech at the New York Federal Reserve Bank.

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