Lessons Learnt from the Dread Pirate

OldShip—Rumbi Petrozzello, CPA/CFF, CFE
2016 Central Virginia ACFE Chapter Vice-President

I’m sure that just about every fraud examiner and forensic accountant knows that when Al Capone was finally brought down and sent to prison, it was for simple tax evasion.  Eliot Ness and his Untouchables are famous for doggedly going after Capone and raiding his illegal businesses.  Frank Wilson, the Internal Revenue agent who built the tax evasion case against Capone, is largely unsung.  I thought of Frank Wilson the other day, when a friend shared a New York Times article with me. It was about Gary Alford, the IRS tax investigator who identified Ross Ulbricht as Dread Pirate Roberts, the founder of Silk Road. The piece was particularly interesting because, initially, Alford was brushed aside when he voiced his suspicions about the true identity of Dread Pirate Roberts.  He had to stick to his guns and collect more and more information before the Drug Enforcement Administration (DEA) agents finally took him seriously.

The work of a fraud examiner or forensic accountant is most often not the exciting surveillance, car chases and gun fights that make up action movies. The evidence that’s collected and analyzed can be complex and leave many reviewers cross-eyed, trying to follow the path down which the investigator is trying to lead them.  However, due to the importance of the work we do, it’s important to not give up if, at first, others are not quite finding what you’re proposing to be that compelling. I was struck by how Alford continued to research the leads he’d found, seeking financial and non-financial information to bolster his case and continuing close interaction with his colleagues until he was successful.  I appreciated how the New York Times outlined the various methods that Alford, an IRS tax investigator, employed to collect the evidence that he needed to tie Dread Pirate Roberts to Ross Ulbricht. When I speak to people about the work I do, they’re surprised when I mention the importance and volume of the non-financial information involved, such as chat room posts and the results of Google searches, to corroborate some of the financial information we’re analyzing. When we finally bring together the results of our investigations, if others aren’t quite seeing things as we do, the challenge for us is to figure out how to better communicate our results.

In Alford’s case, to say he was frustrated during his investigation is an understatement. He initially brought forward his theory about the true identity of Dread Pirate Roberts in June 2013. He was excited by his discovery and thought it would be greeted with a degree of enthusiasm equal to his own. He was wrong. But he didn’t give up.  Instead, he went back to work on collecting yet more information and after taking all this to someone else was again rebuffed.  Finally he was advised by a colleague to give it up – essentially that he had done what he could and should do himself a favor and just drop the whole matter.  Fortunately, in September, Alford asked for yet another background check on Ulbricht which, this time, finally led to Ulbricht’s arrest.

In appreciation of Alford’s diligence, his superiors presented him with a plaque with the following Sherlock Holmes quote, “The world is full of obvious things which nobody by chance ever observes.” It’s up to us to be mindful of this and be the nobodies who observe the obvious things, even when others sometimes initially refuse to believe us.

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