Former FBI Agent Accused of Stealing $1M in Crypto From Foreign Intelligence Target
A former FBI supervisory special agent has been accused of stealing roughly $1 million in cryptocurrency from a foreign intelligence target by exploiting seed phrases he accessed during a counterintelligence investigation. Patrick Steven Yaroch, 41, was arrested on July 31 at his home in Ashburn, Virginia, and charged with interstate transportation of stolen property and receipt of stolen property.
According to an affidavit from an FBI counterintelligence agent, Yaroch discovered seed phrases—recovery words that provide complete control over a cryptocurrency wallet—while working on a case involving the foreign target in late 2024 or early 2025. Prosecutors allege he imported those recovery phrases into wallets under his own control and transferred funds from the target’s accounts approximately 10 to 12 separate times.
The alleged theft did not rely on sophisticated blockchain exploits; possession of valid recovery phrases effectively grants ownership in cryptocurrency. Yaroch told investigators he became frustrated watching the government fail to act against the target’s cryptocurrency activity and decided to “take matters into his own hands.” He also claimed he never communicated with anyone connected to the wallets and that most of the funds remained parked in wallets under his control.
The investigation began when Yaroch voluntarily contacted a Justice Department National Security Division employee on July 28, admitting to making “very poor decisions related to cryptocurrency wallets.” He then reported himself to FBI headquarters, where he told security personnel he had “screwed up.” Agents arrived at his residence later that evening to recover government property and place him on administrative leave. He briefly surrendered a written list of wallet recovery phrases before withdrawing consent and invoking his right to remain silent. The FBI terminated his employment two days later, the same day he was arrested.
Investigators traced the alleged proceeds through multiple platforms. Roughly $188,570 sat inside a Kraken account connected to a TD Bank account that prosecutors say Yaroch accessed using facial recognition. Another $1.02 million had been transferred into Suilend, a decentralized lending protocol, through an application called Slush. Yaroch told investigators he chose Suilend partly because he liked its water-droplet logo and deposited the assets there to generate yield. With Yaroch’s consent, the FBI recovered approximately $925,426 from the Kraken and Suilend accounts into government-controlled wallets.
A review of Yaroch’s phone expanded the investigation. Agents recovered ChatGPT conversations from May and June in which he explored how roughly $1 million could fund retirement before age 40 while living on a vineyard in Italy or Portugal. Additional chats asked about obtaining European Union residency, with Portugal discussed based on his family’s circumstances. Investigators also found airline reservations for Yaroch, his wife, and child to travel from Washington to Lisbon on Sept. 3, returning Sept. 11. The phone reportedly contained powers of attorney prepared in mid-June authorizing Portuguese lawyers to handle tax and registration matters. Yaroch denied planning to move the cryptocurrency overseas, telling investigators the Portugal trip was intended only to visit friends.
The case now heads to federal court in Alexandria, Virginia, where prosecutors will seek an indictment. The identity of the foreign intelligence target and the adversarial nation remain sealed, suggesting some details may not emerge until later in the proceedings.