Lawyer cites government theft charges in bid for Silk Road retrial

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That two law enforcement agents allegedly stole Bitcoins while investigating the Silk Road underground marketplace indicates fundamental flaws in the government's February conviction of Ross Ulbricht as the mastermind of the operation, Ulbricht's lawyer asserted Wednesday.

"The government's considerable efforts at keeping this monumental scandal from being aired at Ross Ulbricht's trial is itself scandalous," wrote Ulbricht lawyer Joshua Dratel, in a blog post.

"Certainly this issue will be part of Mr. Ulbricht's appeal, and is already part of his post-trial motions," Dratel wrote in a follow-up email to IDG.

Throughout Ulbricht's case, Dratel maintained that the court suppressed crucial bits of evidence necessary for Ulbricht's defense. The recent news of how two law enforcement agents allegedly embezzled Bitcoins from Silk Road was part of that suppressed evidence and could have influenced the outcome of the jury's decision to convict Ulbricht, Dratel said Wednesday.

On Monday, federal prosecutors unsealed a complaint charging that former U.S. Drug Enforcement Administration agent Carl Force and former U.S. Secret Service secret agent Shaun Bridges each embezzled Bitcoins from Silk Road when they were part of an investigative task force investigating the site. That investigation ultimately led to the arrest of Ulbricht in September 2013.

Both former federal agents are charged with wire fraud, money laundering and related offenses.

Dratel said he knew of the ongoing investigation of Force prior to Ulbricht's trial but was not allowed to use any of the facts about Force's actions as evidence, a prohibition that Dratel fought vigorously in court, he said. Nor would the court delay the trial until the outcome of the investigation.

"Needless to say, we thought that was unfair and denied Mr. Ulbricht a fair trial," Dratel wrote in an email. Ulbricht's defense team did not even know about theft allegations against Bridges until the complaint was filed this week.

In February, Ulbricht was convicted by a jury of multiple counts related to running Silk Road. They included narcotics conspiracy, engaging in a continuing criminal enterprise, conspiracy to commit computer hacking, and money laundering. He faces a maximum of life in prison.

Ulbricht will be sentenced in May. He is expected to appeal the February guilty ruling if a retrial isn't granted. Judge Katherine Forrest of the U.S. District Court of the Southern District of New York oversaw the case.

Grant Gross in Washington contributed to this report.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com