A former FBI supervisory special agent has been charged after prosecutors accused him of using cryptocurrency seed phrases obtained through FBI investigations to access digital wallets and transfer funds to accounts under his control.
According to a criminal complaint filed in the Eastern District of Virginia, authorities later recovered approximately $925,426 in cryptocurrency linked to the alleged scheme. Prosecutors have not alleged that this figure represents the total amount taken.
Prosecutors say agent used seed phrases from FBI investigations
The complaint charges Patrick Steven Yaroch with interstate transportation of stolen property and receipt of stolen property.
According to the supporting affidavit, Yaroch worked at FBI headquarters in the bureau’s Counterintelligence and Espionage Division after previously serving in the Boston Field Office.
Prosecutors allege he obtained seed phrases associated with cryptocurrency wallets identified during FBI investigations into what court filings describe as “adversarial cryptocurrency accounts.”
Investigators say Yaroch memorised the recovery phrases, created a personal wallet, and carried out approximately 10 to 12 cryptocurrency transfers.
The alleged transfers began in late 2024 or early 2025.
According to the affidavit, Yaroch later told investigators the assets originated from accounts linked to an unnamed foreign adversary.
The complaint does not state that the cryptocurrency belonged to the FBI. Instead, it describes wallets identified during federal investigations.
Authorities recovered cryptocurrency after alleged confession
According to prosecutors, Yaroch met with Justice Department personnel on July 28, during which he allegedly admitted to making “very poor decisions.”
The affidavit states he said frustration over the FBI’s inability to act against the wallets led him to “take matters into [his] own hands.”
The FBI placed Yaroch on administrative leave on July 29 before terminating his employment two days later.
During a search of his Virginia residence, investigators said they recovered electronic devices, a Trezor hardware wallet, and a handwritten seed phrase.
The affidavit also identified cryptocurrency linked to accounts on Kraken, Slush, and the Suilend protocol.
According to court filings, Yaroch consented to transferring approximately $925,426 in cryptocurrency to government-controlled wallets.
Investigators also identified about $165,582 in US dollars held in his Kraken account.
However, prosecutors said the recovered cryptocurrency had been commingled with Yaroch’s personal assets, meaning the recovered balances do not establish the precise value of the funds he allegedly transferred.
Case remains at the charging stage
Yaroch was arrested on July 31.
The allegations have been presented in a criminal complaint, and the case has not yet been tested in court.
As with all criminal defendants, Yaroch is presumed innocent unless and until proven guilty.
Final Summary
- Federal prosecutors allege that a former FBI agent used seed phrases obtained through bureau investigations to access cryptocurrency wallets and execute multiple transfers.
- Authorities recovered approximately $925,426 in cryptocurrency, although court filings do not state that this represents the total amount allegedly taken.
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