The Scandal is that this is Normal for Prosecutors and Courts

In one of the more prominent cyber crime trials of the year, it has been revealed that
some of the government agents who infiltrated the Silk Road underground site stole from the Site:

After a jury in February found Ross Ulbricht guilty of narcotics and money laundering conspiracies among other charges, in conjunction with his role as the mastermind behind the Silk Road online drug marketplace, even most long-time Ulbricht supporters looked at the preponderance of evidence against him and assumed the case was resoundingly closed. Yesterday, the door to that conviction may have cracked open a tiny bit.

The US Department of Justice has charged US Secret Service (USSS) special agent Shaun Bridges and Drug Enforcement Administration (DEA) agent Carl Mark Force IV with money laundering and wire fraud in conjunction with their roles leading the Silk Road investigation. (Force was also charged with theft of government property). The pair of federal officers stand accused of diverting $800,000 in bitcoin from Silk Road to their own personal wallet accounts.

[Aside: Is it just me or aren’t Bridges and Force the two most perfect Hollywood cop names you could ever think of?]

Even crazier, the two are accused of posing as hitmen on the darknet website and subsequently ensnaring Ulbricht in a murder-for-hire plot against one of his Silk Road employees, whose death they later faked while collecting $80,000 for their services. Later Bridges and Force allegedly extorted 770 bitcoins – then worth approximately $100,000 – and had sought even more, by threatening to reveal his role in the employee’s disappearance.

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Judging by a tweet from Ublricht counsel Joshua Dratel yesterday, this is not the first time the defense had heard of these accusations:

Major Silk Road govt corruption scandal revelation today that we've had to sit on for four months and were not permitted to use at trial.
— Joshua Dratel (@JDratel) March 30, 2015

The question is, why was this information inadmissible at trial and what, if any impact, did that have on Ulbricht’s conviction? If the defense can prove to an appellate judge that the defense was wrongly handicapped by this decision – a fact that may be more likely given the new information brought to light by the DOJ indictment – then it could be enough to merit a new trial. In such an event, it’s certainly conceivable that some of the evidence collected by Bridges and Force could be thrown out as a result. A report by Wired suggests that the most crucial evidence related to Ulbricht’s conviction was collected by the New York division of the FBI and the Chicago Department of Homeland Security, meaning it still may be enough to put him away.

It turns out that these revelations will figure prominently in an appeal of his conviction:

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Late yesterday, Ulbricht’s attorney Joshua Dratel posted a statement to Tumblr answering many of these questions and clarifying that the defense is in fact seeking a new trial. Dratel also notes that the defense was aware of the ongoing investigation against US Secret Service (USSS) special agent Shaun Bridges and Drug Enforcement Administration (DEA) agent Carl Mark Force IV during the Ulbricht trial, but was denied the ability to enter this information into evidence.

According to Dratel, the defense has already filed a post-trial motion seeking a new trial, to which the government’s response is due by this Friday, April 3 – with a subsequent defense response scheduled to be filed April 15. Dratel adds that should these motions fail to obtain a new trial, Ulbricht will appeal the existing verdict, citing the Bridges-Force indictment among its arguments.

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Below is the full statement posted to Dratel’s Tumblr. (Note: Dratel’s original post was entirely devoid of paragraphing. Pando has added the below paragraphing to aid in readability. The content remains otherwise unchanged.)

The government’s considerable efforts at keeping this monumental scandal from being aired at Ross Ulbricht’s trial is itself scandalous. In addition to keeping any information about the investigation from the defense for nearly nine months, then revealing it only five weeks prior to trial, and then moving to keep sealed and secret the general underlying information so that Mr. Ulbricht could not use it in his defense at trial, and 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. 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 the payment by Dread Pirate Roberts to a law enforcement agent for information about the investigation, the ramping up of the investigation of Mr. Ulbricht in mid-2013, soon after that paid information began flowing, and 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. In addition, the government not only precluded use of the information at trial, even if it emanated from independent sources, such as discovery, but the government also prevented the defense from conducting any independent investigation, including subpoenaing Mr. Force to testify at trial. The defense also filed numerous discovery requests, to which the government refused to respond.

Regarding the government’s claim that the information was not relevant, the government notified the defense of the investigation of Mr. Force December 1, 2014. Two days later, the government provided its trial exhibits. Among those exhibits were several that referred to Mr. Force in his various internet personas, including “Nob” (his authorized undercover alias), as well as his rogue identities on Silk Road, including alpacino, french maid, and Death From Above (all of which were providing, or attempting to provide, Dread Pirate Roberts with confidential information about the government’s investigation of Silk Road). Thus, according to the government, even after it disclosed the fact of the investigation, it believed Mr. Force was indeed quite relevant. However, in the course of the ensuing litigation regarding whether the defense would be allowed to use the information about the investigation of Mr. Force at Mr. Ulbricht’s trial, by the time trial began the government either eliminated those exhibits or redacted them. During trial, the government successfully objected to the defense’s attempts to introduce the unredacted documents the government had initially designated as its exhibits.

While I will not claim that it is normal for investigators to be this larcenous, this sort of behavior by the prosecutors is normal.

It's clear to my non-lawyer mind that the fact that a significant portion of the investigation of Ross Ulbricht (allegedly the Dread Pirate Roberts) was being conducted by corrupt agents is a material fact for the jury to evaluate, but the prosecutors managed to wave the secrecy magic wand, and to hide this information from the jury.

This is why you should never talk to a prosecutor of cop without a lawyer in the room.