FORMER DEA AGENT SENT TO PRISON FOR 78 MONTHS DUE TO ILLEGAL ACTIONS DURING SILK ROAD INVESTIGATION

FROM:  U.S. JUSTICE DEPARTMENT 

Monday, October 19, 2015

Former DEA Agent Sentenced for Extortion, Money Laundering and Obstruction Related to Silk Road Investigation

A former Drug Enforcement Agency (DEA) agent was sentenced today to 78 months in prison for extortion, money laundering and obstruction of justice, which crimes he committed while working as an undercover agent investigating Silk Road, an online marketplace used to facilitate the sale and purchase of illegal drugs and other contraband.

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

Carl M. Force, 46, of Baltimore, pleaded guilty on July 1, 2015, before U.S. District Court Judge Richard Seeborg of the Northern District of California.  In addition to imposing the prison term, the court ordered Force to pay $340,000 in restitution and serve three years of supervised release following his sentence.

Force was a special agent with the DEA for 15 years.  From 2012 through 2013, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road.  Force served as an undercover agent and was tasked with, among other things, establishing communications with a target of the investigation, Ross Ulbricht, aka “Dread Pirate Roberts.”

In connection with his guilty plea, Force admitted that, while working in an undercover capacity using his DEA-sanctioned persona, “Nob,” in the summer of 2013, Force offered to sell Ulbricht fake drivers’ licenses and “inside” law enforcement information about the Silk Road investigation.  Force admitted that he attempted to conceal his communications with Ulbricht about the payments by directing Ulbricht to use encrypted messaging.  Force admitted that he understood the payments from Ulbricht, which were made in bitcoin, were government property, as they constituted evidence of a crime, and that he falsified official reports and stole the funds, which he deposited into his own personal account.  Force admitted that, as Nob, he received bitcoin payments from Ulbricht worth more than approximately $100,000.

In addition, Force admitted that he devised and participated in a scheme to fraudulently obtain additional funds from Ulbricht through another online persona, “French Maid,” of which his task force colleagues were not aware.  Force admitted that, as French Maid, he solicited and received bitcoin payments from Ulbricht worth approximately $100,000 in exchange for information concerning the government’s investigation into the Silk Road.

Force also admitted that he obstructed justice both by soliciting and accepting bitcoin from Ulbricht and by lying to federal prosecutors and agents who were investigating potential misconduct by Force and others.

In connection with his guilty plea, Force also admitted that, although he did not receive permission from the DEA to do so, he served as the chief compliance officer for CoinMKT, a digital currency exchange company.  In this role, in February 2014, Force was alerted by CoinMKT to what the company initially believed to be suspicious activity in a particular account.  Force admitted that, thereafter, in his capacity as a DEA agent, but without authority or a legal basis to do so, he directed CoinMKT to freeze $337,000 in cash and digital currency from the account.  Force further admitted that he subsequently transferred approximately $300,000 of the digital currency into a personal account that he controlled.

The case is being investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security 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.

FORMER POLICE OFFICER INDICTED ON CIVIL RIGHTS, OBSTRUCTION CHARGES

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, March 27, 2015

Former Independence, Missouri, Police Officer Indicted on Federal Civil Rights and Obstruction of Justice Charges

Acting Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri announced that a federal grand jury has returned a four-count indictment against former Independence, Missouri, police officer Timothy Runnels for violating the constitutional rights of a minor who was in his custody and obstructing the subsequent investigation into the incident.

According to the indictment, Runnels continuously deployed a Taser against the minor while the minor was on the ground and not posing a threat to Runnels or others.  The indictment also charges that Runnels deliberately dropped the minor headfirst onto the ground while the minor was restrained and not posing a threat to Runnels or others.  The indictment alleges that the minor sustained bodily injury as a result of Runnels’ actions and, with respect to the first count, that the offense involved the use of a dangerous weapon.  The indictment also charges Runnels with two counts of obstruction of justice for filing a false police report concerning the incident and for making a false statement to Independence Police Department investigators regarding the amount of force that he used against the minor.

If convicted, Runnels faces a statutory maximum sentence of 10 years in prison and a fine of $250,000 for each of two charged counts of civil rights violations, and a statutory maximum sentence of 20 years in prison and a fine of $250,000 for one count of obstruction of justice by submitting a false police report and one count of providing misleading information to Independence Police Department investigators.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.

This case is being investigated by the FBI’s Kansas City Division and is being prosecuted by Trial Attorney Shan Patel of the Civil Rights Division and First Assistant U.S. Attorney David Ketchmark of the Western District of Missouri.

CIVILIAN EMPLOYEE OF U.S. NAVY FOUND GUILTY OF OBSTRUCTION, MAKING FALSE STATEMENTS

FROM:  U.S. JUSTICE DEPARTMENT 

Friday, December 19, 2014

Civilian Navy Employee Found Guilty of Obstruction and False Statements After Jury Trial

A federal jury today returned a guilty verdict against a civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, for obstructing an investigation and making false statements, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Nicholas A. Klinefeldt of the Southern District of Iowa.

Steven William Ashton, 41, with a last known U.S. residence in Davenport, Iowa, was found guilty after a nine-day jury trial of creating false documents to obstruct the Naval Criminal Investigative Service (NCIS) investigation into Ashton’s private consulting business called BlackGrid Consulting LLC.  The jury also found Ashton guilty of making false statements about his tour of duty in order to obtain federal benefits and access to military bases worldwide.  

The evidence at trial showed that the NCIS was investigating Ashton for conflicts of interest and using inside government information to advance his business.  When Ashton learned about the investigation, he created fraudulent documentation purporting to show that he had fully disclosed his business to Navy authorities and received approval.  At Ashton’s direction, his defense counsel unwittingly submitted those false documents to the prosecutors and gave other false explanations to the Justice Department.  

According to the evidence presented at trial, from April 2004 to March 2013, Ashton was employed by the Navy as the North Atlantic Treaty Organization and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, responsible for managing contracts and agreements among the Navy and other countries to support the United States’ military efforts.

He was found not guilty on charges of theft of government funds for obtaining housing benefits, called Living Quarters Assistance, to which he was not entitled, and of obstructing that investigation.

This case was investigated by the NCIS and the Air Force Office of Special Investigations.  The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Clifford Cronk of the Southern District of Iowa.

BUSINESSMAN INDICTED FOR FAILURE TO PAY TAXES ON OVER $2 MILLION OF INCOME

FROM:  U.S. JUSTICE DEPARTMENT 
Thursday, September 12, 2013
Massachusetts Businessman Indicted for Tax Crimes

The Justice Department and Internal Revenue Service (IRS) announced that Richard L. Furnelli, formerly of Holyoke and South Hadley, Mass., was indicted today in Springfield, Mass.  Furnelli is charged in a nine-count indictment with one count of obstructing the internal revenue laws, four counts of tax evasion and four counts of failing to file his individual income tax returns.

The indictment alleges that from 1994 to 2009, Furnelli obstructed the IRS’s ability to identify his income and compute the income taxes due and owing by using nominee owners to disguise his ownership interests in a network of businesses and assets, including entities operating an adult entertainment venue called the Gold Club.

The indictment also alleges Furnelli earned over $2 million in total income from 2006 to 2009 and evaded his individual income taxes for that time period by, among other things, directing the payment of his income to the nominee entity, RLF Ventures LLC, utilizing a bank account in the name of a nominee in order to deposit his income and pay his personal expenses, as well as using cash extensively. The indictment further alleges that Furnelli failed to file his individual income tax returns from 2006 to 2009.

 Furnelli faces a maximum punishment of three years in prison for the charge of obstructing the internal revenue laws; five years for each count of evading his individual income taxes; and one year for each count of failing to file his individual income tax returns. He faces a maximum fine of $100,000 on each count of failing to file his income tax returns and $250,000 for each of the other counts.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The case was investigated by special agents of the IRS - Criminal Investigation. Tax Division Trial Attorneys Thomas Voracek and Mark McDonald are prosecuting the case.