A former FBI agent is facing accusations that he stole nearly $1 million in cryptocurrency from wallets connected to federal investigations. Patrick Yaroch, who worked at the bureau until earlier this year, allegedly used seed phrases he obtained through FBI systems to transfer funds from adversarial wallets, according to prosecutors.
How the theft allegedly worked
Court documents unsealed this week lay out a straightforward but troubling scheme. Yaroch, while still employed by the FBI, had access to seed phrases — the master keys to cryptocurrency wallets — that the bureau had seized or obtained during investigations. Prosecutors say he used those phrases to move cryptocurrency out of wallets that were under FBI control or linked to targets of probes.
The total amount is just under $1 million, though the exact figure may shift as investigators trace the transactions. The wallets in question were tied to criminal cases, meaning the funds were evidence or assets the bureau was monitoring.
Insider access, outsider trust
The case cuts at a sensitive issue for law enforcement: how to secure digital assets while using them as investigative tools. The FBI has increasingly seized cryptocurrency in operations against ransomware groups, darknet markets, and fraud rings. But holding those assets requires someone to know the seed phrases — and that knowledge creates a single point of failure.
Yaroch's alleged theft isn't the first time an insider has exploited access to crypto keys, but it's rare for a federal agent to be the one accused. The bureau has not commented on whether it has changed its custody procedures since the alleged theft came to light.
What happens next
Yaroch has not yet entered a plea. The case is being handled by the U.S. Attorney's Office for the District of Columbia. A preliminary hearing is expected within the next two weeks. If convicted, he faces federal charges that could carry years in prison.
The bigger question — one the court won't answer — is how many other wallets might be vulnerable. The FBI has not disclosed how many seed phrases Yaroch had access to, or whether any other agents could have done the same thing.
