Former Silk Road Task Force Agent Pleads Guilty to Money Laundering and Obstruction

Ex-Secret Service Agent Used Status to Pocket $820,000 Worth of Bitcoin

A former U.S. Secret Service special agent pleaded guilty today to money laundering and obstruction of justice in connection with his theft of digital currency during the federal investigation of Silk Road, an online marketplace used to facilitate the purchase and sale of illegal drugs and other contraband.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of the FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General’s Washington, D.C. Field Office, and Special Agent in Charge Lori Hazenstab of the Department of Homeland Security’s Office of the Inspector General in Washington D.C. made the announcement.

Shaun W. Bridges, 32, of Laurel, Maryland, had been a special agent with the U.S. Secret Service for approximately six years in the Baltimore Field Office and was assigned to the Electronic Crimes Task Force.  He pleaded guilty before the U.S. District Judge Richard Seeborg of the Northern District of California and a sentencing hearing is scheduled for Dec. 7, 2015.

“There is a bright line between enforcing the law and breaking it,” said Assistant Attorney General Caldwell.  “Law enforcement officers who cross that line not only harm their immediate victims but also betray the public trust.  This case shows we will act quickly to hold wrongdoers accountable, no matter who they are.”

“Mr. Bridges has now admitted that he brazenly stole $820,000 worth of digital currency while working as a U.S. Secret Service special agent, a move that completely violated the public’s trust,” said U.S. Attorney Haag.  “We depend on those in federal law enforcement having the highest integrity and unshakeable honor, and Mr. Bridges has demonstrated that he utterly lacks those qualities.  We appreciate the hard work of our federal partners that went into bringing Mr. Bridges to justice.”

“Through a series of complex transactions, the defendant stole bitcoins worth hundreds of thousands of dollars,” said Chief Weber.  “This case is an excellent example of the financial expertise of our special agents. Through the analysis of both the block chain and data from the Silk Road servers, we were able to trace the flow of funds, which eventually led to the defendant.”

Between 2012 and 2014, Bridges was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on Silk Road.  Bridges’ responsibilities included, among other things, conducting forensic computer investigations in an effort to locate, identify and prosecute targets, including Ross Ulbricht, aka Dread Pirate Roberts, who ran Silk Road.

According to his plea agreement, Bridges admitted that in January 2013 he used an administrator account on the Silk Road website that belonged to another individual to fraudulently obtain access to that website, reset passwords of various accounts and to move bitcoin from those accounts into a bitcoin “wallet” that Bridges controlled.  Bridges admitted that he moved and stole approximately 20,000 bitcoin, which at that time was worth approximately $350,000.

Bridges admitted that he moved the stolen bitcoin into an account at Mt. Gox, an online digital currency exchange based in Japan.  According to his admissions, he liquidated the bitcoin into $820,000 of U.S. currency between March and May 2013, and had the funds transferred to personal investment accounts in the United States.

Bridges’ plea agreement also established that he obstructed the Baltimore federal grand jury’s investigations of Silk Road and Ulbricht in a number of ways, including by impeding the ability of the investigation to fully utilize a cooperator’s access to Silk Road.  In addition, Bridges admitted that he made multiple false and misleading statements to investigators in connection with the San Francisco federal grand jury’s investigation into his own illegal acts, and that he encouraged another government employee to lie to investigators.

Bridges is one of two federal agents to plead guilty in connection with illegal activity during the investigation of Silk Road.  Carl M. Force, 46, of Baltimore, was a special agent with the Drug Enforcement Administration and was also assigned to the Baltimore Silk Road Task Force.  On July 1, 2015, Force pleaded guilty to a three-count information charging him with money laundering related to his theft of over $700,000 in digital currency while acting as an undercover agent on the Task Force.  Force is scheduled to be sentenced by Judge Seeborg on Oct. 19, 2015.

The case was investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Justice Department’s Office of the Inspector General and the Department of Homeland Security’s Office of the Inspector General in Washington, D.C.  The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section, with assistance from Assistant U.S. Attorney Arvon Perteet.

Major savings result from AEDC wind tunnel improvement program

by Deidre Ortiz
Arnold Engineering Development Complex Public Affairs

8/21/2015 - ARNOLD AIR FORCE BASE, Tenn.  -- Replacing the Test Article Control System and Data Acquisition System feedthrough assemblies used at the 16-foot transonic wind tunnel here is saving the Arnold Engineering Development Complex more than $1 million this year.

This effort is part of the Improved Transonic Test Capability, or IMTTC, program, meant to improve equipment and processes for the 16-foot transonic wind tunnel, or 16T.

Located on the Propulsion Wind Tunnel test carts, the 16T Test Article Control System, or TACS, and Data Acquisition System, or DAS, reside in 10 environmental enclosures that protect them from the harsh environment of the 16T conditions.

Elijah Minter, Air Force acquisition program manager for the Flight Sustainment Branch at AEDC, explained the electrical feedthrough assemblies are an integral component of the systems.

"They transport low-level signals from instrumentation located in the high temperature and low pressure areas of the tunnel to sensitive equipment protected inside the environmentally controlled enclosures," he said. "There are approximately 130 feedthrough assemblies needed for the TACS and DAS."

The feedthrough assemblies that have been employed by the TACS and DAS require extensive labor and time to fabricate. Each cost on average $13,000 to assemble.

"The IMTTC program launched a study to determine a more cost-effective solution to the feedthrough assembly requirement," Minter said.

A candidate bulkhead feedthrough assembly was purchased and underwent rigorous pressure and electrical tests to ensure that all TACS and DAS requirements were met.

The first candidate did not pass this testing but the Aerospace Testing Alliance team was undeterred, and worked with Minter to identify another more innovative solution. Within a few weeks, a second candidate was identified and a prototype was immediately ordered.

This new design passed each test and will more efficiently utilize the limited space with each enclosure than any previous feedthrough design.

"This design meets all performance requirements, occupies less space, costs 80 percent less than current design and can be delivered to meet our accelerated schedule," Minter said.

In total, the switch to the bulkhead feedthrough assembly will provide a net savings of $1,380,860 for this year alone.

Finding a more inexpensive option to save money at 16T was the idea of ATA employee Marc Smotherman, who received a reward for his suggestion. In addition to Smotherman and the rest of the IMTTC program team, Keith Holt, ATA project manager, noted that Minter is also to be thanked for his part in supporting the effort.

"Elijah Minter deserves a huge credit for this savings," he said. "After the failure of the test on the first replacement cable option, it would have been easy to give up and stick with the original $13,000 cable. Elijah pushed the team to keep going, and even researched and found replacement options. His successes drove the team to finding the ultimate solution."

DoD Announces Award of New Flexible Hybrid Electronics Manufacturing Innovation Hub in Silicon Valley

As part of the Department of Defense effort to partner with the private sector and academia to ensure the United States continues to lead in the new frontiers of manufacturing, Secretary of Defense Ash Carter will announce today that the Obama administration will award a Manufacturing Innovation Institute for Flexible Hybrid Electronics to a consortium of 162 companies, universities, and non-profits led by the  FlexTech Alliance.

The announcement follows a highly competitive nationwide bid process for the seventh of nine such manufacturing institutes launched by the administration, and the fifth of six manufacturing institutes led by the Department of Defense. Part of the National Network for Manufacturing Innovation announced by President Obama in 2012, this newest institute will bring the best minds from government, industry and academia together to advance U.S. leadership in manufacturing flexible hybrid electronics. The emerging flexible hybrid electronics sector promises to revolutionize the electronics industry, and the Silicon Valley-based FlexTech Alliance consortium, backed by companies as diverse as Apple and Lockheed Martin and major research universities including Stanford and MIT, represents the next chapter in the long-standing public-private partnerships between the Pentagon and tech community.        

A truly collaborative consortium, the FlexTech team includes more than 160 companies, nonprofits, independent research organizations and universities. The cooperative agreement will be managed by the U.S. Air Force Research laboratory (AFRL) and will receive $75 million in DoD funding over five years matched with more than $90 million from  industry, academia, and local governments. In total, the institute will receive $171 million to invest in strengthening U.S. manufacturing.

Flexible hybrid electronics manufacturing describes the innovative production of electronics and sensors packaging through new techniques in electronic device handling and high precision printing on flexible, stretchable substrates. The potential array of products range from wearable devices to improved medical health monitoring technologies, and will certainly increase the variety and capability of sensors that already interconnect the world. The technologies promise dual use applications in both the consumer economy and the development of military solutions for the warfighter.

After a decade of decline in the 2000s, when 40 percent of all large factories closed their doors, American manufacturing is adding jobs at its fastest rate in decades, with nearly 900,000 new manufacturing jobs created since February 2010. Today’s announcement represents the kind of investment needed to build on this progress, broadening the foundation for American manufacturing capability and accelerating growth for years to come.

Immediately following Secretary Carter’s announcement of the FlexTech Alliance award, he will hold the first ever roundtable of Silicon Valley leaders at Defense Innovation Unit – Experimental (DIUx). Secretary Carter announced his plans to launch this outpost at Moffett Federal Airfield for the department to work with a variety of corporations and entrepreneurs at a speech at Stanford University in April 2015. The innovative culture of Silicon Valley, in collaboration with these Department of Defense initiatives and the department’s world-class laboratories, will accelerate military technology development cycles and focus on critical Department of Defense needs while also creating new commercial opportunities.

Info exchange facilitates change

by Maj Bruce R. Hill, Jr.
Air Force Nuclear Weapons Center

8/27/2015 - KIRTLAND AIR FORCE BASE, N.M. -- Knowledge can make for positive change and strengthen an organization. The Air Force Nuclear Weapons Center Force Improvement Program team is gaining knowledge through the exchange of information with units throughout the center, strengthening relationships with missile and bomber wing customers.

In June, the AFNWC FIP team met with members of the 90th Missile Maintenance Squadron at F.E. Warren Air Force Base, Wyoming, to gain an understanding of how Air Force Materiel Command supports intercontinental ballistic missile maintenance, and how AFNWC can better support its customers. The effort supports the AFNWC commander's intent to improve the force.

"By shadowing a maintenance team we got a first-hand look into their day-to-day operations," said Capt. Michael J. Parker, Physicist and Nuclear Engineer and FIP team volunteer. "We got to learn what works for them and what doesn't."

It all started in 2014 when AFNWC leadership and the original FIP team discussed the benefit of talking with the customer in person to see how AFNWC could better support them.

Traveling to the Cowboy State was both helpful and enlightening with respect to better understanding the customer. Although issues exist that are not in AFNWC's purview, some can be handled by the center. For example, an issue brought up by the 90th Maintenance Group regarding sensor problems gave the team insight as to what really happens when water seeps into missile silos.

"When water collects around a sensor, an alarm will alert six personnel to be dispatched," said Capt. Jordan K. Tabayoyon, 90th MMXS facilities flight commander.  "The response to this alarm is priority one, which means we must respond as soon as possible to determine the issue. To do so requires us to divert personnel and resources already scheduled for other tasks."

Since 2013, teams were dispatched 42 times only to find that the alerts were caused by negligible amounts of water seepage.

"We contacted the missile engineering office at F.E. Warren who's in charge of that modification and tied them in with the Rivet MILE teams at Hill AFB, Utah, to reconsider the water sensor locations," said Kent T. Hyer, Ground Division Mechanical Branch chief and FIP team member located at Hill AFB.

Now that the connection is made between the two organizations, relationships develop that foster cooperation and understanding. This allows the FIP team to move into a monitoring position until the issue with the sensors becomes rectified.

More than a dozen observations were made by the FIP team, some of which led to rapid results such as the restored function of an Air Launch Control System antennae and Fast-Rising B-Plug. The team will work similar issues and keep the AFNWC commander apprised of status, such as with the water sensors.

Additionally, the FIP team will share its observations with Air Force Global Strike Command, the 90th MMXS's major command, for its consideration.

"It is results like these that I expect from the FIP team, because we have a responsibility to the warfighter (customer)," said Maj. Gen. Sandra E. Finan, AFNWC commander. "The FIP team sometimes has to dig deep to get to the root of an issue, which includes meeting with the warfighter. By doing so, we help ensure they get the quality products and services they expect and deserve from us."

Team 5-0 family member selected for AFSVA Technology Camp

by Brian Hagberg
50th Space Wing Public Affairs

8/26/2015 - SCHRIEVER AIR FORCE BASE, Colo. -- A Team 5-0 family member was one of the 29 youth selected to attend the inaugural Air Force Services Activity Technology Camp Aug. 10-14 at the Drury Plaza Hotel North in San Antonio, Texas.

Hagen Burnett, the son of Caryn Burnett, 50th Operation Support Squadron resource adviser, and a 6th grade student at Ellicott Middle School, was selected based on an essay displaying his passion for Science, Technology, Engineering and Mathematics, according to Condredge Fisher, AFSVA youth programs branch chief.

"The selection process included reviewing a 200-word essay or video submitted via YouTube by each youth," Fisher said. "The essay or video was to explain something the youth created within STEM. We looked at which youth expressed a real passion for STEM."

Caryn said she thought the camp would be a good way for Hagen to see how STEM can be applied outside of a classroom setting.

"He's always been really in to technology and engineering type stuff so I thought it was an opportunity for him to get to participate and it not be just school," she said.

The camp covered areas such as robotics, video game design, 3-D printing, hardware engineering/circuits and software design/coding.

"My favorite part about the camp was the raspberry pie," Hagen said. "It wasn't actually a food, it's a device. They call it a raspberry pie."

The raspberry pie can be connected to other electronic devices, such as a television, and allow that device to be used as a computer for programming, he added.

"The focus of the camp was to teach them how to create technology, not just use it," Caryn said.

One of the practical uses for technology that struck a chord with Hagen was the use of 3-D printers to create prosthetics for children impacted by the war in Sudan. Members of Not Impossible-Project Daniel traveled to Sudan to set up a lab that used 3-D printers to create the prostheses.

"There were people who went down there and spent all their money for 3-D printers and started making everybody arms, hands, limbs, it was really cool," Hagen said.

If given the opportunity, Hagen would like to participate in a similar project, he added.

In the short term, he said his experience at the camp has helped him gain an appreciation for mathematics and made the subject easier for him.

"We did a lot of mathematics [at the camp]," he said. "It did actually help me with school a lot. I'm really better at math now."

He said they used math to assist with rocket building and targeting, as well as with programming video games and coding.

"I never liked math, up until now," he said. "Now it's ok. It's not my favorite, but it's ok."

Caryn said his experience at the camp has made getting math homework complete less of a struggle.

"He learned the value of math, which is what I wanted to happen so we'd stop having that battle," she laughed.

Hagen said he definitely wants to attend the camp again.

"I think this is a better learning experience, they should do this in every school," he said.

Caryn said she was very pleased with the camp because it brought STEM to life for Hagen.

"This was a great opportunity for him to see and work with people to see how cool, really everything cool you have based on math and science," she said. "This was a great opportunity to keep him inspired and keep him moving forward."

Operator of Music Piracy Websites Pleads Guilty to Criminal Copyright Infringement

A North Carolina man pleaded guilty today to reproducing and distributing without permission millions of infringing digital copies of copyrighted works, including copies of popular songs and albums before they were commercially available.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) in Washington, D.C., made the announcement.

Rocky P. Ouprasith, 23, of Charlotte, North Carolina, pleaded guilty to one count of criminal copyright infringement before U.S. Magistrate Judge Douglas E. Miller of the Eastern District of Virginia.  Sentencing is scheduled for Nov. 17, 2015.

According to admissions made in connection with his guilty plea, between May 2011 and October 2014, Ouprasith operated RockDizMusic.com, a website originally hosted on servers in France and later in Canada, from which Internet users could find and download infringing digital copies of popular, copyrighted songs and albums.  Ouprasith admitted that he obtained digital copies of copyrighted songs and albums from online sources, and that he encouraged and solicited others, referred to as “affiliates,” to upload digital copies of copyrighted songs and albums to websites, including RockDizFile.com, that were hosted on servers in Russia, France and the Netherlands, and that hosted hyperlinks to content being offered for download on RockDizMusic.com.  Ouprasith further admitted that to encourage such activity, he agreed to pay the affiliates based on the number of downloads from his website.

According to the Recording Industry Association of America, in 2013, RockDizFile.com was the second-largest online file sharing website specializing in the reproduction and distribution of infringing copies of copyrighted music in the United States.  Ouprasith admitted that, in 2013 and 2014, he either ignored or pretended to take remedial action in response to complaints from copyright holders and their representatives that the website contained links to infringing copies protected songs and albums.

In October 2014, federal law enforcement authorities shut down RockDizMusic.com and RockDizFile.com, and law enforcement authorities in the Netherlands and France seized file-hosting servers utilized by Ouprasith.

In connection with his guilty plea, Ouprasith admitted that the market value of his illegally pirated material was more than $2.5 million.

This case is being investigated by ICE-HSI.  The case is being prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Randy Stoker of the Eastern District of Virginia.  The CCIPS Cyber Crime Lab, the Criminal Division’s Office of International Affairs, as well as Dutch, French and Canadian law enforcement officials have provided significant assistance.

The enforcement action announced today is related to the many efforts being undertaken by the Department of Justice Task Force on Intellectual Property (IP Task Force).  The IP Task Force supports prosecution priorities, promotes innovation through heightened civil enforcement, enhances coordination among federal, state, and local law enforcement partners, and focuses on international enforcement efforts, including reinforcing relationships with key foreign partners and U.S. industry leaders