Thomas White operated the multi-million dollar operation website under the pseudonym “Dread Pirate”
Thomas White
A university dropout lived a life of luxury on the back of his dark web black market before a National Crime Agency officer stole his ill-gotten gains. Thomas White operated the multi-million dollar Silk Road website under the pseudonym “Dread Pirate” before police raided his waterfront flat in Liverpool city centre.
Paul Chowles, who formed part of the NCA team which brought the dropout Liverpool John Moores University student down, seized on the opportunity to steal 50 Bitcoin from the man who he had been tasked with investigating. This stolen cryptocurrency was worth around £60,000 at the time of the theft, but its worth has since ballooned to more than £4million.
The former intelligence analyst and unit manager was said to have believed that he had “gotten away with” his crimes for years, quietly spending his criminal earnings on day-to-day expenses rather than expensive cars or exotic holidays. His brazen scheme was ultimately only revealed when his suspect, and later victim, was released from prison and pointed out the missing coins to police, with the officer having now been put behind bars himself.
The ECHO previously reported in 2019 that White, then aged 24, enjoyed a “lavish” lifestyle via the $96million Silk Road 2.0 site. Users were able to secretly purchase and sell drugs via the dark web domain, which he had set up after the original Silk Road was shut down by the FBI in 2013, as well as sourcing computer hacking tools.
The unemployed former accounting student, who left his course at LJMU after just one term, was able to pay the £10,700 rent for his plush apartment on Mann Island up front, despite having no legitimate income. The self-taught computer whizz also splashed out £35,000 on sophisticated computer equipment and frequently stayed up late into the night gaming.
Thomas White bought £35,000 of computers to help him run the dark web shop(Image: National Crime Agency)
Goods exchanged via Silk Road 2.0 were purchased and sold using Bitcoin, with White having operated the platform under the aliases “St Exo” and “Dread Pirate Roberts 2”. He had previously been an administrator of the notorious website in its original form and was able to set up its successor within a month of its shutdown.
With around $96million of goods having been traded on Silk Road 2.0, White was said to have taken commission of between one and five per cent on each sale conducted by the site’s tens of thousands of users. But he was ultimately brought down after investigators tracked parcels of drugs which he had ordered on the platform and had delivered to a rented mailbox.
When the NCA subsequently searched White’s address, they also discovered a computer containing hundreds of images of child abuse. He was thereafter found to have told his fellow admins that he intended to use Silk Road as a secure site for paedophiles “because there was money to be made from these people”.
His devices meanwhile contained hacked data from the FBI, NASA, user information from Ashley Madison, a website which promoted extramarital affairs, the database of the US Fraternal Order of the Police, the equivalent of the UK’s Police Federation, and customer details of broadband provider TalkTalk. It is not believed that White, who was also reported to have been the administrator of a Grand Theft Auto roleplay site, had personally been responsible for the breaches which saw this information stolen.
Backup copies of the first Silk Road site were also found on his encrypted laptop. He was said to have run the second incarnation of the illegal marketplace between November 2013 and March 2014, when he took a back seat.
Having initially been arrested in November 2014, coinciding with raids by the FBI concerning US-based operations, the case took years to progress to the point of sentencing, with White becoming a well-known privacy activist under the guise of “The Cthulhu” in the intervening period. Having 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.
Drugs sold by Thomas White, 24, who lived in a luxury apartment on the Liverpool waterfront and ran the Silk Road 2.0 website(Image: National Crime Agency)
The NCA’s Ian Glover said following his 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.
“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.”
Former Liverpool John Moores Student Thomas White, 24, was jailed for running the web site “Silk Road 2.0” which traded $96m in drugs, computer hacking tools and other items on the dark web and from which he took a cut. His laptop also contained indecent images of children.(Image: National Crime Agency)
The same court heard on Wednesday afternoon that Chowles, of Southleigh, near Exeter, Devon, was one of nine members of a digital forensics team which conducted investigations into White, who took over Silk Road under a new guise, Silk Road 2.0, after the original website was shut down by the FBI in 2013. This led to the NCA seizing a USB stick containing 97 Bitcoin from his luxury apartment on Mann Island as part of their operation.
But Craig Hassall KC, prosecuting, described how this digital wallet, which White had named his “retirement wallet”, remained in the NCA’s charge for more than two years until May 2017, when Chowles surreptitiously transferred 50 of the cryptocurrency into his own control. The 42-year-old was able to do so using a dark web “mixing service” called Bitcoin Fog, which allowed him to disguise the source of these funds, before he moved the currency into private accounts.
One, which had the moniker “Friendly P”, had used a newly registered email address under the name “P Charles” and was apparently based in the Netherlands. Chowles, the “very technically minded and knowledgeable” arresting officer and lead officer in the initial case, went on to spend around £140,000 of the proceeds of this theft in supermarkets, at “various eating and drinking establishments” and on building work and nursery fees.
But suspicion began to fall upon him in 2022 following White’s release from prison. Having been jailed for five years and four months in 2019, he noticed during linked investigations relating to the Proceeds of Crime Act that a quantity of Bitcoin had been withdrawn from his account.
A portion of this missing cryptocurrency was later recovered from Chowles’ home computer, with further quantities having been cashed in. While the value of 50 Bitcoin at the time of the theft was said to have amounted to £59,409.90, Mr Hassall added: “As of yesterday’s date, 50 Bitcoin had a value of over £4.3million.”
Chowles was subsequently arrested at his workplace in May 2022, with several notebooks which were seized from his office drawers having contained usernames and passwords associated with White’s cryptocurrency accounts. He began working for the NCA as an intelligence officer in 2009 and was subsequently promoted to the role of intelligence analyst and then, in 2020, to a manager within its Bristol-based technical operations unit.
The dad-of-three, who has no previous convictions, was dismissed without noticed from the force on Friday last week. Will Parkhill, defending, told the court: “He is someone who, it seems, was suffering from anxiety and depression at the relevant time. He was dealing with undiagnosed autism. There was a moderate degree of debt.
“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.
“The marriage has broken up. There is not really any other reason that the marriage has broken up. It is as a result of this. She remains close to him and remains supportive of him. That is perhaps an indication that there is very much another side to Mr Chowles. This is behaviour which was not to have been expected, either by himself or those who knew him best.
“The punitive effect of time spent in prison, for him, is going to be more significant then it may well be for others, not least because of his former profession and the personal characteristics he seems to show, the autism, anxiety and depression. There are physical health complainants that will have some impact as well.
“We know that this is an asset which has appreciated massively over the years. This is not something that would have been known to Mr Chowles at the point that he committed that theft and began processing with the laundering of that money.
“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.
“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.”
Chowles admitted theft, transferring criminal property and concealing criminal property. Appearing suited in the dock and sporting glasses, short mousey brown hair and a beard, he showed no reaction as he was handed five-and-a-half years behind bars.
Former National Crime Agency officer Paul Chowles(Image: Crown Prosecution Service)
Sentencing, 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.
“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 court accepts that, in the main, you were spending money on day-to-day familial expenses, and there is no suggestion of high living. But your dishonest and devious concealment had a profound impact on proceedings concerning Thomas White. Inevitably, others would have been subject to suspicion.
“It was you who earlier played a significant role in the investigation of Mr White. It was you who was responsible. It was you who had stolen 50 Bitcoin and thereafter set up the elaborate concealment and transfer exercise for your own ends.
“Whilst you are divorced as a result of the commission of these offences, you remain living in the familial home together with your three children, aged seven, five and two. I have read the impact that your ex-wife believes that it will have upon the children.
“Sadly, you are responsible for the separation from your children that will now occur, a separation that you would have been well aware of since the date of your arrest. I also take into account the fact that the theft occurred, now, a number of years ago, and the fact that a man of your position, having spent a number of years investigating serious crime, will find the custody setting particularly oppressive.
“There was a high degree of trust and responsibility placed upon you. You abused your position of trust and responsibility. The offences were committed over a sustained period of time, and they were sophisticated in nature and implementation.
“I am satisfied you knew it was extremely likely, and you anticipated, that the Bitcoin would have increased in value. Had you not been arrested, you would have continued to reap the rewards of your wrongdoing.
“The gravamen of these offences is your betrayal of trust to the National Crime Agency that you were serving and the betrayal of trust to your colleagues and the public at large, who rightly expect that those in positions such as yours will work with integrity, honesty and in accordance with the law. You were in a position of privilege and power. You abused that privilege and power which had been placed in you.
“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 his own dirty money 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.
“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.”