US Sheriffs Welcome $1.7 Million Windfall After Students Plead Guilty to Stealing 5,400 BTC
Two Jacksonville students are facing up to two decades behind bars after pleading guilty to stealing $4 million worth of bitcoin. The pair hacked darknet site Sheep Marketplace in 2013 and made off with 5,400 BTC. Under forfeiture laws, Nassau County Sheriff’s Office will share in a $1.7 million windfall.
LEA Celebrates Another Bitcoin Bonanza
Bitcoin thefts end badly for hackers who don’t cover their tracks, but spell great news for law enforcement. Across the US, federal and state agencies have been treating themselves to new computers and other equipment, all paid for with confiscated digital assets. It’s common practice for law enforcement to keep a portion of the proceeds from major crimes, but bitcoin’s rising value, coupled with the glacial pace at which criminal trials move, has caused payouts to balloon.
This week, Sean Harrison Mackert and Nathan Gibson pled guilty to wire fraud for hacking drug marketplace Sheep in late 2013. The pair, who are in their mid twenties, face a maximum sentence of 20 years in jail, in a case that news.Bitcoin.com first reported on last year. But one legal official believes they deserve to walk free.
“These young men, yes, they stole this money but there aren’t victims in the traditional sense,” said Jacksonville defense attorney Richard Landes. “If there were victims, the federal government would be returning this money to the victims; instead, the federal government is not returning this money. The federal government is keeping this money.”
<figure id="attachment_99977" style="width: 696px" class="wp-caption aligncenter">
<figcaption class="wp-caption-text">Officials toast their latest proceeds of crime award, for $1.7 million.</figcaption>
Officials Divvy Up the Spoils
At a press conference, officials smugly congratulated one another on their stellar work and the multi-million dollar windfall it had brought about. The first major cash boost US agencies received from bitcoin was after auctioning off the 144,000 BTC seized from Silk Road admin Ross Ulbricht. Since then there have been scores of similar cases, including a pending auction of $52 million worth of BTC by US Marshals. The proceeds from this week’s Jacksonville case will be divvied up between the Nassau County Sheriff’s Office, JSO, and the Florida National Guard, who will put the the money towards “equipment upgrades”.
While law enforcement are duty bound to go after crime wherever it occurs, be it on the dark web or in the hood, they seem to reserve particular fondness for bitcoin seizures. It helps to portray agencies as being on the cutting-edge of technology and attuned to emerging cyber threats. The reality is often more prosaic: Mackert and Gibson got caught after cashing out their bitcoins into five banks including Jacksonville Federal Credit Union, Bancorp Bank, and Bank of America. They then blew the profits on luxury goods including jewelry. They may have been capable hackers, but master criminals they were not.
How do you feel about law enforcement getting rich off bitcoin seizures? What do you think should be done with the proceeds of cyber crime in cases like this? Let us know in the comments section below.
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