- A former FBI counterintelligence supervisor is accused of memorizing seed phrases from bureau systems
- The agent moved roughly $1 million out of wallets tied to a foreign adversary without having to resort to any sort of hacking
- Investigators recovered ChatGPT conversations in which he asked how to invest the money and how to gain EU residency, and the chatbot’s replies recited his age, wife, child, and property plans back to him
Patrick Steven Yaroch, a supervisory special agent in the FBI’s Counterintelligence and Espionage Division, has been arrested and charged with interstate transportation and receipt of stolen goods.
An affidavit filed in the Eastern District of Virginia, claims Yaroch took roughly a million dollars in cryptocurrency from wallets he encountered while investigating a foreign adversary and then used ChatGPT to determine what to do with it.
The theft, as described, required no technical sophistication whatsoever: Yaroch held a Top Secret clearance with SCI access and had spent 2017 to 2025 on a national security squad at the FBI’s Boston division working against a single adversarial nation, which NBC News reports was Russia.
Latest Videos FromTechRadar
An atypical heist with the alleged mastermind acting out of “frustration”
Patrick Steven Yaroch encountered the cryptocurrency wallets tied to his work in November 2024. He had researched how wallets work, created one of his own, searched the FBI’s holdings for the relevant account information, and memorized the recovery seed phrases.
He then made roughly 10-12 transfers to his own wallet. No encryption was broken, and no protocol was exploited because none was in place for a man with his security clearance; he simply read a phrase off an internal system and remembered it.
The incident is particularly interesting because he self-reported, effectively turning himself in to his colleagues: on July 28 2026, he contacted a Justice Department employee he had worked with in Boston over Signal, asking to meet. They met at FBI headquarters the next day, where Yaroch reportedly began breaking down almost immediately, and the conversation moved to the other man’s office.
He said the situation was “eating him up inside” and that he wanted to give all the money back. He filed an online self-report to the FBI’s Security Division and told headquarters personnel he had screwed up. When agents arrived at his Ashburn home that evening, he told them, unprompted and in blunter terms, that he had messed up.
His defense, as per the affidavit, however, is slightly different from what one would expect: His stated motive was not greed. He told his colleagues he had grown frustrated that the FBI could not or would not act against those accounts, described himself as “spinning out of control” at the time, and said he decided to take matters into his own hands.
Despite this, he seemingly had a change of heart after cooperating earlier, asking for a paper containing his wallet seed phrases, which he had volunteered to agents, while declining to continue the interview without a lawyer while asking for time over the next two days.
This culminated in agents obtaining warrants, executing them on July 31 with SWAT securing the house, and recovering an iPhone, a Trezor hardware wallet, the handwritten seed phrases, a Portuguese power of attorney dated June 15, and three passports, one of them diplomatic.
Ironically, the most potentially damning evidence of his intentions comes from his conversations with AI, still on his phone and directly linked to him.
His conversations with ChatGPT convey a very different thought process: On May 28, he asked how to invest or spend a million dollars to maximize profit and return. On June 4, he asked what someone with about a million dollars should do to leave the United States and become a resident or citizen of an EU country. On June 17 he asked whether an American connecting through Turkey needs a visa. On June 26 he asked for help drafting an email to an executive about a job opening and life in Greece.
There is more evidence that he might already have acted based on the answers he received: prosecutors have found a power of attorney authorizing two Portuguese lawyers to register him with the country’s tax authority and obtain a Portuguese tax identification number, and unreported foreign travel to Germany in May, Portugal later that month, and Grenada in early July, all in breach of bureau reporting rules.
His current investments seem to be equally erratically reasoned: On July 23, five days before he first confessed, Yaroch moved roughly $1.02 million into Suilend, a lending protocol on the Sui blockchain, reaching it through the Slush wallet app, which he then deleted. He parked the funds there to earn interest. When asked why he chose that service, he said he liked its logo, a water droplet.
When agents looked, the position was worth $933,756, roughly 8% below its level a week earlier. His Kraken account held another $188,570, including about $5,000 in a token called Squid and $1.67 in Bitcoin. Agents ultimately swept $925,426 into government wallets, leaving about $165,582 behind because it was dollars and could not be moved to a crypto wallet.
Yaroch is charged under sections 2314 and 2315 of the federal criminal code, the general provisions on transporting and receiving stolen goods. He is not charged with espionage, with computer fraud, or with theft of government property.
The wallets were not the government’s, and that might change how they are treated legally, even as it raises important questions about the security protocols at federal agencies regarding cryptocurrencies, since they both monitor and have seized increasingly large amounts of them over the past few years.
In Yaroch’s case, if the allegations hold, government protocols failed to identify the theft for nearly eighteen months before the person responsible reported himself, making the case for a potential review by federal agencies about how they handle such matters.
Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.
