Uni dropout lived life of luxury before dark web crimes were uncovered

Daily Record

4 days ago

Thomas White operated a site worth millions before he was caught by the National Crime Agency.
A university dropout profited from a dark web black market to live a life of luxury before a National Crime Agency officer investigating him stole cryptocurrency from him.
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Thomas White, 30, operated the Silk Road site, worth millions, under a pseudonym "Dread Pirate" before police raided his flat in Liverpool.
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Paul Chowles, 42, who was on the NCA team which stopped the former student's operations, took 50 Bitcoin from White - only worth £60,000 at the time, with the value since skyrocketing to over £4million.
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The former intelligence analyst initially believed he had "gotten away with" his theft for years, only spending his illegal earnings on everyday expenses rather than luxury items. His scheme was only exposed when White was released from prison and told police about the missing coins, resulting in the officer being jailed himself.
The original Silk Road site was shut down by the FBI in 2013, but White set up Silk Road 2.0 just a month later, with transactions worth over £71million, the Liverpool ECHO reports.
Despite having no legitimate income, the former accounting student, who had quit his course after a single term, could pay the £10,700 rent for his plush flat in the Mann Island development upfront, and buy high-spec computer equipment.
Users could secretly buy and sell drugs via the site, but investigators tracked packages of drugs he had ordered and had delivered to a rented mailbox to ultimately bring him down.
When NCA investigators searched his address, they also found a device containing hundreds of images showing children being abused. He was discovered to have told admins of the site he intended to use it as a secure platform for paedophiles "because there was money to be made from these people".
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Other devices also contained hacked data from high-profile organisations including the FBI, NASA, the database of the US Fraternal Order of the Police, and customer information from broadband provider TalkTalk. However, it is not thought that he was personally responsible for obtaining the data.
Following his initial arrest in November 2014, coinciding with FBI raids concerning US-based operations, his case took years to reach sentencing. Having ultimately pleaded guilty to charges of drug trafficking, money laundering and making indecent images of children, he was ultimately jailed for five years and four months in April 2019.
Ian Glover from the NCA said following the sentencing: "Thomas White and his online associates believed they could use the dark web to anonymously commit crimes with impunity. But this case shows that those who try to hide behind the apparent security of anonymising software will be identified and brought to justice.
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"White was a well-regarded member of the original Silk Road hierarchy. He used this to his advantage when the site was closed down. We believe he profited significantly from his crimes. Close working with American partners in the FBI, Homeland Security and the Department of Justice has resulted in the take down of global illegal drug empires and the targeting of associated money laundering, primarily involving cryptocurrencies.
"This has been a complex, international investigation and follows previous investigations led by the NCA into dark web criminality. Working with our international partners, the UK is fast becoming an increasingly hostile environment for dark web crime."
On Wednesday, July 16, Paul Chowles appeared in court. He was one of nine people on a digital forensics team which investigated White, and seized a USB stick containing 97 Bitcoin from White's flat during their operation, which was kept in their charge for over two years until May 2017.
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It was then that Chowles secretly transferred 50 Bitcoin into his own control, using a dark web "mixing service" allowing him to cover up the source of the funds before sending them to private accounts.
The lead officer, described as "very technically minded and knowledgeable", spent around £140,000 of his proceeds in supermarkets, bars and restaurants, and on building work and nursery fees.
Suspicions were raised in 2022 after White got out of prison. He had noticed during linked investigations in relation to the Proceeds of Crime Act that a quantity of Bitcoin was missing from his account.
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Part of the cryptocurrency was recovered from Chowles' personal computer, with more having been cashed in. He was arrested at work in May 2022, with notebooks found in his office drawers containing usernames and passwords for White's crypto accounts.
He was ultimately sacked without notice from the force on Friday, July 11. Will Parkhill, defending, told the court Chowles was struggling with his mental health and undiagnosed autism.
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He said: "It is not a case where there is an obvious explanation. It is something that he struggles with. It is not something that I can elaborate on to provide a significant explanation for his behaviour.
"Most of that Bitcoin has sat where it went and, over the course of a number of years, has been filtered into familial expenses. It is not a case of high living. It has simply been used to pay for things that they would ordinarily pay for.
"It is not an offence where we can point to any significant life event, but he is someone who has strayed away from the way he lived his life up until that point. Now, he will deal with the consequences. It is a day he has known has been coming for some considerable period of time.
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The solicitor added that Chowles' marriage had broken up, and that his health and former profession would have a significant effect on any time spent in prison.
He continued: "Mr Chowles is not a stupid man. It is likely that appreciation would not have been known to him at the time. It is incidental and unintended. While we have eyewatering figures at the upper end of the scale, we have further figures in relation to his usage of these funds.
"He knew more than most. He did dishonest things with that. He did not do the right thing. He stuck with that for some time, but the figures that we are talking about were not of intentional design.
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"Mr Chowles has destroyed his life and had a serious impact on many other people's lives. We ask your honour to pass as low a sentence as you can in all of the circumstances."
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Chowles admitted to theft, transferring criminal property and cocealing criminal property, receiving a sentence of five-and-a-half years in prison.
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Passing sentence, Judge David Aubrey KC said: "You were not only involved in that investigation, but you were the lead officer. You were involved in his arrest, and it was you who interviewed him.
"You commenced employment with the National Crime Agency, an organisation which investigates those who are suspected of committing serious organised crime. You occupied a managerial position. It is trite to say that such a role requires, demands and expects trust, integrity and honesty.
"You had much knowledge as to how to navigate through investigations concerned with digital data such as cryptocurrency. That was of great assistance to the agency in the fight against organised crime, provided that you did so with honesty and integrity and had the values of the agency in your DNA in the pursuit of justice.
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"Regrettably, you did not. Honesty should have been in your DNA, but it was not. Your knowledge was of great assistance to you as you set about stealing from your suspect. You weaved a sophisticated, intricate, dishonest web. The evidence shows that it was a dishonest web of deceit and guile."
The judge added that Chowles had "abused his position of trust and responsibility", and "betrayed" the trust of his NCA colleagues and the general public. He said: "You were there to serve the public. You did not. You were serving yourself for your own ends, as is illustrated by that which you dishonestly did after you initially stole the 50 Bitcoin. The court accepts that it is most unlikely that you will see a court of law again."
Chowles could now be ordered to repay the stolen funds under the Proceeds of Crime Act. A National Crime Agency spokesman said following the sentencing: "We understand and fully share the concern this case will cause the public we serve.
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"The former officer was sacked for gross misconduct. The NCA expects the highest standards of conduct and behaviour from all our officers, and we are committed to taking robust action against anyone who falls short of those standards, as we did in this case, resulting in an investigation fully supported by the agency's anti-corruption unit."
Alex Johnson, specialist prosecutor with the Crown Prosecution Service's special crime division, added: "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."