A Charleston man linked to the first-ever law enforcement seizure of digital bitcoins might have been the victim of mistaken identity, according to a writer who chronicles the so-called "crypto-currency."
The U.S. Drug Enforcement Administration last year drew widespread Internet attention when it posted a forfeiture notice indicating that agents had seized 11.02 bitcoins worth $814 from 31-year-old Eric Daniel Hughes of Charleston for allegedly violating the federal Controlled Substances Act.
The DEA stated that Hughes also went by the name Casey Jones, a moniker that had surfaced on the infamous Silk Road website's forums in connection with alleged prescription pill sales. Silk Road, an off-the-grid marketplace where drugs are bought and sold, relies on bitcoins, an Internet cash equivalent that can be sent directly to other users with no involvement from banks or middle men.
But Brian Cohen, a writer for the Let's Talk Bitcoin! blog, said a more recent DEA seizure raises doubts about Hughes' involvement in the case. The DEA posted a forfeiture notice last week indicating it had seized 17.24 bitcoins valued at $2,099.87 from the same account, or "wallet," that allegedly had been linked to Hughes, Cohen reported.
The difference: This time around, the account was said to be based in California and its owner was listed as "unidentified," Cohen stated. No mention of Casey Jones was made.
"Bitcoin users can create as many addresses as they like but each address is unique to that user. The first seizure and latest seizure use identical wallet addresses and therefore should be owned by the same person," Cohen said. "The DEA appears to have thought that Mr. Hughes was someone using the alias Casey Jones in the first seizure. It is curious that while the latest seizure does not name Mr. Hughes as owning the wallet address that it also does not attribute the address to the alias."
Another oddity is the latest reported seizure actually took place in May 2013 - just a month after the DEA's initial action - but it was kept under wraps until last week, Cohen said.
David Aylor, Hughes' attorney, said his client has strongly denied being Casey Jones or ever using that name online. Hughes has insisted the bitcoins didn't belong to him and that he had no part in buying or selling anything on Silk Road, Aylor said.
Aylor said he reached out to federal authorities with that message last year when Hughes' name first surfaced in connection with the case. He's heard nothing since, and the DEA has not charged Hughes with any crime, he said.
"We had not heard one way or the other, so this is a huge relief for him," Aylor said. "We had always denied those were his to begin with."
The DEA's Los Angeles field office investigated the initial bitcoin seizure. Special Agent Sarah Pullen, the office spokeswoman, did not immediately return an email seeking comment Tuesday. She has previously declined to discuss the case, citing the ongoing investigation.
The DEA moved to seize the bitcoins last year the same month that Charleston police conducted two undercover buys targeting Hughes, according to court documents. He was accused of selling less than a gram of a powerful muscle relaxant and 10.7 grams of marijuana to informants working with police, arrest affidavits said.
Charleston police charged Hughes with distributing marijuana and prescription pills after a June 5 raid on his St. Philip Street apartment, according to county court records. The charges stemmed from 10 bags of the narcotic Suboxone found in Hughes' bedroom during the search and the previous undercover drug purchases, according to arrest affidavits.
His case was referred in December to the county's drug court, which allows non-violent offenders a chance to get their charges dismissed if they complete at least a year of court supervision and treatment, court records show.