Ex-NCA officer jailed for theft of 50 Bitcoin now worth £4.4m during dark web investigation
A former National Crime Agency (NCA) officer has been jailed for stealing and hiding 50 Bitcoin – now worth £4.4 million – which had been seized during an investigation into online crime on the dark web.
Paul Chowles, 42, was part of the NCA investigation, which targeted organised criminal networks selling illegal goods on the dark website Silk Road 1 in 2013.
The operation, conducted jointly with the Federal Bureau of Investigation (FBI) in the US, led to the convictions of several individuals living in the UK for drugs offences.
A second phase of the operation was launched in 2014, which led to the identification and arrest of a man named Thomas White, who had launched Silk Road 2.0 less than a month after the FBI had shut down the original site in 2013. White was jailed for 64 months in April 2019.
As part of the investigation team working on the case, Chowles took the lead in the analysis and extraction of relevant data and cryptocurrency from the devices seized from White.
Between May 6 and 7 2017, 50 of the 97 Bitcoin seized by the NCA was transferred from a ‘retirement wallet’ owned by White to a public address in two transactions. The Bitcoin was then broken down into smaller amounts and transferred through the ‘Bitcoin Fog’, before being moved to other public addresses in an attempt to hide the trail of the money.
The Bitcoin Fog was a cryptocurrency ‘mixer’, which gained notoriety as a money laundering service for criminals seeking to hide their illicit proceeds from law enforcement.
Chowles then either converted the Bitcoin to pound sterling and withdrew the funds from his account or used both a Cryptopay debit card and a Wirex debit card provided with accounts he set up.
In total, he made 279 transactions using the Cryptopay debit card, spending the sum of £23,309 between August 26, 2021, and May 20, 2022. Chowles also converted and made five withdrawals totalling £6,232 between 30 August 30, 2021, and February 22, 2022.
In total, he used the Wirex account and debit card, to spend £79,884.77 between August 27, 2021, and July 14, 2021.
It is calculated that Chowles, who has since been dismissed from the NCA, benefited financially to the value of £613,147.29 through his criminality.
The value of the 50 Bitcoin at the time was £59,409 and is now estimated to be worth more than £4.4million.
At Liverpool Crown Court in May, Chowles pleaded guilty to theft, transferring criminal property, and concealing criminal property.
This week he was jailed for a total of five-and-a-half years at the same court.
The prosecution followed an investigation by Merseyside Police.
Alex Johnson, Specialist Prosecutor with the Crown Prosecution Service’s (CPS) Special Crime Division, said: “Within the NCA, Paul Chowles was regarded as someone who was competent, technically minded and very aware of the dark web and cryptocurrencies.
“He took 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.
“Once he had stolen the cryptocurrency, Paul Chowles sought to muddy the waters and cover his tracks by transferring the Bitcoin into mixing services to help hide the trail of money.
“He made a large amount of money through his criminality, and it is only right that he is punished for his corrupt actions.
“The CPS will not hesitate to bring charges against those who abuse their position in power for financial gain.”
Detective Chief Inspector John Black, from Merseyside Police’s Force Intelligence Bureau, said: “We know criminals have sought to use cryptocurrency as a way to launder money from illegal activities including drug dealing and fraud.
“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.
“This case should illustrate in the starkest terms that nobody is above the law. When it became clear that one of the NCA’s own officers had stolen Bitcoin, our officers conducted extensive enquiries to unearth a trail of evidence that Chowles had attempted to hide. This was supported fully by the NCA.
“He took advantage of his position on this investigation to line his own pockets while devising a plan that he believed would cover his tracks. He was wrong.
“I want to reassure the public that Merseyside Police have specialist officers with the experience and expertise to track the movement of funds designed to avoid detection.
“Above all, our officers have the determination to make sure criminals do not profit in any way from breaking the law while other honest and hard-working members of the public work to provide for their families.”