In 2012 and 2013, two special agents were investigating the Silk Road website, where users could buy and sell illegal drugs using the web-based currency known as Bitcoins. Federal prosecutors now say those two agents were actually benefiting from the very site they were trying to bring down -- information that is threatening to undermine one of the Justice Department's biggest cases, reports CBS News correspondent Chip Reid.
Carl Force, a Drug Enforcement Administration agent, and Shaun Bridges, a member of the Secret Service, were working undercover to unmask Ross Ulbricht. The government suspected the clean-cut 30-year old was "Dread Pirate Roberts," the creator and operator of Silk Road.
Force and Bridges used fake identities to communicate with Ulbricht. That, federal prosecutors say, was just the start of their deception.
"It's truly more complicated than any spy thriller I can think of," Wired senior writer Andy Greenberg said.
He said Force was essentially doubly undercover.
During his undercover investigation, Force, a 15-year veteran of the DEA, allegedly created several online personas, including "French maid." In disguise, he allegedly sold Ulbricht information about the government's investigation, offered to kill a Silk Road employee and then blackmailed Ulbricht.
"He believed he was as immune from law enforcement as the person he was tracking," Greenberg said.
His payment was Bitcoin, which can be traded and exchanged anonymously -- or so they thought.
"If he was using his DEA computer to do these things, that's probably not very smart," Greenberg said.
In a series of complex transactions, tracked by the government, both agents allegedly moved Bitcoins into their personal accounts. Prosecutors say Bridges stole more than $800,000 worth.
"They it may have succumbed to that temptation of dirty money and the impunity of anonymity, just as everyone using the Silk Road and its drug dealers were," Greenberg said.
Ulbright has already been convicted of running Silk Road and is awaiting sentence. He faces a second set of charges for murder, also stemming from the Silk Road site. CBS News spoke to his lawyer who called these new charges against the agents "strong grounds for appeal."