Two former federal agents were charged with fraud in the theft of digital currency during an investigation into an online black market known as Silk Road that let users buy and sell drugs and other illegal items, authorities said Monday.
Former U.S. Secret Service special agent Shaun W. Bridges, 32, of Laurel, Maryland, appeared in federal court in San Francisco but didn't enter a plea.
He has been charged with wire fraud and money laundering. He was later released on $500,000 unsecured bond. His attorney, Steven Levin, declined to comment.
Bridges is accused of diverting more than $800,000 in digital currency to his personal account after gaining control of the funds during the Silk Road investigation.
The complaint alleges that Bridges placed the assets into a now-defunct digital currency exchange in Japan then wired funds into one of his personal investment accounts in the U.S.
The criminal complaint was filed in the U.S. District Court in San Francisco on Wednesday and unsealed Monday.
Carl M. Force, 46, of Baltimore, a former special agent with the Drug Enforcement Administration, also has been charged in the case. He was expected to make an appearance in court Monday and remain in custody pending a detention hearing on Thursday. His attorney Ivan Bates did not immediately returns calls for comment.
Force worked undercover and was tasked with establishing communications with a target of the investigation, Ross William Ulbricht, who was convicted of seven drug and conspiracy charges in February.
Ulbricht was accused of creating the multimillion-dollar marketplace for illegal drugs and other contraband and adopting the alias Dread Pirate Roberts, a character from the movie "Princess Bride."
The website promised its buyers and sellers anonymity by using encryption and bitcoins.
Force is charged with wire fraud, theft of government property, money laundering and conflict of interest.
The complaint alleges that Force used fake online personas and engaged in complex bitcoin transactions to steal from the government and Ulbricht.
Investigators say Force solicited and received digital currency as part of the investigation but failed to report the funds and instead transferred the currency to his personal account. In one such transaction, Force sold information about the government's investigation to Ulbricht, authorities say.
The complaint also alleges that Force invested in and worked for a digital currency exchange company while still employed by the DEA. He directed the company to freeze a customer's account and then transferred the account funds to his personal account, it says.