Cocky cop jailed for stealing bitcoins had log of his crypto theft in his office

A former cop in the United Kingdom was sentenced to five and a half years in prison Wednesday after pleading guilty to covering up his theft of 50 bitcoins seized during an investigation into the now-defunct illicit dark web marketplace Silk Road.

In 2014, the former UK National Crime Agency (NCA) officer, Paul Chowles, assisted in the arrest of Thomas White, a man "who had launched Silk Road 2.0 less than a month after the FBI had shut down the original site in 2013," the Crown Prosecution Service (CPS) said in a press release.

Chowles was tapped to analyze and extract "relevant data and cryptocurrency" from White's seized devices, specifically due to Chowles' reputation for being "technically minded and very aware of the dark web and cryptocurrencies," CPS said.

Like US cops busted for stealing bitcoins from Silk Road seizures, Chowles' theft was brazen. In 2017, he transferred 50 of 97 seized bitcoins from one of White's wallets to a public address, then used a cryptocurrency mixer called Bitcoin Fog to break up the bitcoins into smaller amounts "in an attempt to hide the trail of the money," CPS said.

At the time, the bitcoins were worth about $80,000, but today, they're valued at nearly $6 million.

Seized iPhone, “several notebooks” expose bitcoin theft

Chowles almost got away with the cover-up. Immediately after the theft, the NCA assumed that White had transferred the bitcoins, CPS said. Four years later, unable to find the bitcoins, cops deemed them "untraceable." In that time, Chowles made hundreds of transactions with the bitcoins, estimated to have "benefited financially to the value" of more than $800,000 "through his criminality."

White himself tipped off the local cops in charge of monitoring him in his local area that an NCA officer may have stolen the bitcoins. CPS reported that he "noticed that someone had removed 50 Bitcoin and stated that he knew that it had to be someone within the NCA because they had the private keys for his cryptocurrency wallet."

When the local cops—from Merseyside Police—set up a meeting with the NCA to find out more, Chowles was in attendance, CPS noted. The NCA fully cooperated with the Merseyside Police, who arrested Chowles the next year, recovering his iPhone, "which linked Chowles to an account used to transfer Bitcoin as well as relevant browser search history relating to a cryptocurrency exchange service."

Perhaps even more damning were "several notebooks" that Chowles kept in his office. Those included "usernames, passwords, and statements relating to White’s cryptocurrency accounts." Ultimately, "a trail of evidence" exposed Chowles' scheme, CPS said.

Detective Chief Inspector John Black, from Merseyside Police's Force Intelligence Bureau, suggested that "it will be extremely disappointing to everyone that someone involved in law enforcement could involve themselves in the very criminality they are tasked with investigating and preventing." But Americans are likely less surprised, given that two federal officers who investigated Silk Road were convicted of the same crimes years ago.

Chowles' sentencing came after he pleaded guilty in May to theft, transferring criminal property, and concealing criminal property.

In the CPS press release, Alex Johnson, specialist prosecutor with the CPS Special Crime Division, accused Chowles of taking "advantage of his position working on this investigation by lining his own pockets while devising a plan that he believed would ensure that suspicion would never fall upon him."

"He made a large amount of money through his criminality, and it is only right that he is punished for his corrupt actions," Johnson said. "The CPS will not hesitate to bring charges against those who abuse their position in power for financial gain."