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I can run flat for a half month before my hands start shaking. I want to see my book. I have an eddy organism. Let me show you another episode.
Me, Tim, Paris, and so. Hello boys and girls, ladies and german's. This is Tim Ferris and welcome to another episode of The Tim Ferris Show. I'm going to skip my usual preamble.
You guys have heard it before and I'm going to get straight to this guest because we are going to run out of time before we run out of material. My guest today is Katherine. That's with an R-Y-N commonly known as Katie Hahn, H-A-U-N on Twitter at Katie, Katie, K-T-I-E, underscore Hahn, H-A-U-N. She is a general partner at Andreessen Horowitz.
Previously, she spent a decade as a federal prosecutor focusing on fraud, cyber, and corporate crime alongside agencies, including the SEC, FBI, and Treasury. She created the government's first cryptocurrency task force and led investigations into the amount box hack. You might talk about what that is and the corrupt agents on the Silk Road task force. I have quite a few questions about that.
While with the US Department of Justice, Katie prosecuted Rico murders. We'll define that. Organized crime, public corruption, gangs, and money laundering. So lots of good guys.
In other words, she also held senior policy positions at Justice Department headquarters in both the National Security Division and Attorney General's Office, where her portfolio included antitrust, tax, and national security. While in the private sector, Katie is testified before both the House and Senate on the intersection of technology and regulation. Katie serves on the boards of Coinbase and Hacker One and has invested in and advised tech companies from SEED to Series E stage. She teaches a management course at Stanford Business School and previously taught Cybercrime at Stanford Law School.
Katie clerked for US Supreme Court Justice Anthony Kennedy and is an honors graduate of Stanford Law School. As a lifetime member of the Council on Foreign Relations, Katie, welcome to the show. Tim, thanks for having me. Great to be here.
I am so excited to chat for so many reasons. And I thought I would just set the tone for people listening with a few lines from our mutual friend of all, Robicon, who is certainly a crowd and listener favorite here on the podcast. I emailed a wall to ask if there might be any questions or subjects. It would be interesting to explore with Katie and, of course, indicating that I would do my own homework.
And he replied with the following. I asked him if I could give attribution and he said, yes, you can cite me. So here's what he said. This was his very concise response.
Quote, she has a concealed carry, group in Cairo, can't set foot in Russia, dealt with a lot of violent criminals, et cetera. But she's also a suburban mom with kids and runs the number one hard-charging VC fund in crypto. She's quite the character. If I'm down to one phone call, instead of calling my lawyer, I'm calling Katie.
All right. So on top of that, you seem to be the child whisperer from another mutual friend, Tsuna. And she talked about how incredible you are with children. So we are going to run out of material, I think, very easily.
And I want to start with you with the Silk Road. So the Silk Road is of great interest to me for a lot of reasons. And the principle among those is the fact that I used to work many days a week out of Glen Park Library in San Francisco. Oh, wow.
Yeah. And so for those who don't know, the founder of the Silk Road, who used the handle Dread Pirate Roberts, of course, an allusion to the character from the Princess Bride, was apprehended in Glen Park Library on a day. I happened just not to be there. So the fact that there is not to be there is not there.
I was not there. But it makes me assume that I must have been sitting right next to this guy many, many, many times. So for those who don't know, just as an introduction, could you explain what the Silk Road was? So if you were not Glen Park that day, Tim, that means you missed the lovers coral that the FBI staged in order to nab DPR's computer.
I did. I did. I did. I did.
I did. And actually Nick built in who ended up writing his hard book about this was also just a few blocks away, lived in the neighborhood. So let's move into this. And you can also explain the, well, maybe the Silk Road, and then the lovers coral, why that was in any way tactically important.
So the Silk Road, as many of your listeners probably already know, but for those who don't, is a darkness site. And it's a site that you can buy anything from fake passports or that you could buy anything from fake passports to heroin, to fentanyl, to drugs, and just all kinds of contraband, right? I was actually not involved in the investigation into Russell Brokton DPR. A lot of people think, Oh, you ran the Silk Road case.
I was actually involved in what I'll call the twist of the Silk Road case. I was involved in some of the agents who were investigating DPR and Russell Brokton the Silk Road. I ended up having to prosecute them. So let me back up before we get to that.
And that, by the way, that started with a tip that someone in the government was up to no good and in cryptocurrency. But before I get into that, that twist piece, just to answer your earlier question about the Silk Road. So there was this, as you mentioned, DPR and the government, the US government for years was trying to find out who is DPR. Where is he or she located?
Are they in the US or elsewhere? And how are they running the Silk Road? And so they spend a number of years trying to find out. And one of the kind of secret weapons that the US government had was an undercover federal agent who I'll call NOB.
And NOB is one of the people who ended up prosecuting. But this undercover federal agent befriended the mastermind of the Silk Road DPR. So I pause for just one second. So usually if someone has a placeholder pseudonym, it's like Jane, John Doe, where is NOB coming from?
And is that with an N or KN? It's with an N, it's NOB. But if you think NOB is a kind of crazy handle, the personas that NOB invented to actually then extort the mastermind of the Silk Road were French made and death from above. So we can get into that moment.
So NOB is just the type of expert. All right. Sorry to interrupt. Please continue.
Well, where were we? So we were at the Silk Road. The government's trying to figure out who's the mastermind. And it has a couple of different task forces on that job.
One, as I mentioned, is outside of Washington, D.C. That's where NOB and others are befriending DPR and getting little clues into who or where is this person? How do they do that? They do that by having NOB, who's an undercover federal agent befriended online DPR, Russell Road.
And so for two years, NOB and DPR are communicating almost daily. And they become actually friends. If you read the chats, their messages on the Silk Road website, which the government leader sees, they become kind of, you know, they engage in friendly banter back and forth. What did you eat today?
Oh, what are you doing? Are you working out? And the reason for that, Tim, is those kind of little clues in inform the government, where is this person at? Like, are they online during hours in the middle of the day?
What kind of workouts are they doing? Are they hiking the hills? What are they eating? Are they eating salmon?
You know, where is that found? Right? So just little clues over two years really can help the government investigation. So NOB was getting these clues by befriending Russell Road.
And NOB's cover story was that he was had connections to the criminal underworld in Latin America because he was a drug cartel leader. And his in to Russell Brook was, Hey, I want to buy your business. You're still good. I like this business.
So that's how the two started communicating. And somewhere along the way, NOB went bad. NOB became a double agent playing both sides and extorting Russell Brook for hundreds of thousands of dollars at the time of Bitcoin, which today would be hundreds of millions of dollars of Bitcoin or of dollars in Bitcoin. But also selling Russell Brook secrets into the government's own investigation using that death from above moniker.
That's just incredible. My understanding, please correct me for wrong, that one of the key elements of the story in apprehending the PR was also the fact. And I want you to fact check this understanding that this wasn't where you kind of entered the scene, but instead he used, he made a bit of a rookie mistake and he used the same handle. It was something like Altoid or something like that in multiple locations with his email address that ultimately allowed agents and law enforcement to triangulate, at least that seems to have been a piece of the puzzle.
I might be misremembering that. But when you became involved, what were the key elements that allowed you to? What was going on and then prosecute effectively? So again, I didn't prosecute Ross, but I remember that case well because as you note, Tim, he was apprehended in San Francisco.
So I actually remember when he came into the federal building at the Justice Department that day. And you are right that there were some mistakes. He was pretty good at obfuscating, but there were some mistakes. And I think there's a New York Times article on this that the IRS agent on the case, Gary Alford, was kind of just on the open web found a reference to his real name on Google somehow.
So I think your memory is correct. But of course, like you say, it's a bigger piece of a puzzle. I mean, it was a multi-year investigation. It involves search warrants from what I understand all over the world and a number of different pieces of the puzzle.
But one piece, indeed, was what you said, which is the kind of rookie mistake of leaving a few digital breadcrumbs in the form of his real name that ultimately led to his apprehension. And I should have been more specific by prosecution. What I meant was in reference to the two federal agents, one of which being knob. So because in this twist, I mean, part is I understand it part of what makes this pretty fascinating is that the technology itself, some of the technology that play made it possible.
Or at least facilitated the tracking of these digital breadcrumbs. Could you speak to that? So actually, I'll go a step further and I'll say in law, we have this concept called but for this, this wouldn't have happened. And I can tell you that but for the blockchain, we would not have caught, by the way, you said knob.
There are actually two federal agents. We'll get into that in a second because it turned out there was another rogue federal agent doing all kinds of other things who was on that Silk Road task force. And but for the blockchain, we would not have caught these two corrupt agents. And I say that if I sound like I say that was certainty, it's because I'm certain of it.
We would not have caught them otherwise. And in fact, the only reason that we were able to investigate and follow the flow of funds was because of the blockchain technology. And without it, we wouldn't have been able to bring these two individuals to justice. In fact, it's still be today federal agents, I'm quite sure of that.
And moreover, they probably have over a billion dollars worth of criminal proceeds in form of Bitcoin, given how the price has gone up. Yeah, they would have been highly resource rich and enabled. Sort of questionable characters. I mean, what alternative universe that would have been in this case, if we could pause for a moment, you seem to have a question.
You seem to have a superpower of getting in front of an audience. And this is certainly shown up in previous profiles of you, CNBC and elsewhere, getting in front of an audience of people who come from all walks of life, such as the members of a jury and getting them to understand a topic they might have not heard of before, or they might be very complicated, possibly complicated. Could you explain for people who have heard the term blockchain, but really don't know what it refers to, what the blockchain is? Well, there are numerous blockchains, but let's just use the example of the Bitcoin blockchain.
And it's essentially to what it is a massive ledger that keeps track of who owns what. And instead of some central entity keeping track, it's instead done by what are called nodes all over the world. And these nodes, in the case of the Bitcoin blockchain, are called miners. And the best way to think of them in my mind is think of miners like the workers who are performing computing work to secure the system that keeps track of this ownership.
So it's kind of this decentralized, not centrally controlled, big, huge ledger that keeps track of who owns what? Does that paint a picture for you? And it's also the key things about the blockchain is it's immutable. No one can change it.
And that turned out to be really important in the case we're talking about because these agents, while I was investigating them, were agents the whole time. So they were hot on my trail. They could look and see what I was learning. They could peak in our investigation.
In other words, the government wasn't able to terminate them just because we thought there was some nefarious conduct afoot. And so the blockchain was actually really necessary because in several instances they were actually able to get banks and financial entities to destroy records, to cover evidence of their crime. They also forged subpoenas and forged court orders and the like, I think, burn bags. And because of flashing the badge, hey, this is an undercover operation bank, so and so delete those records.
And not surprisingly, the banks complied. Here's a federal agent with a subpoenas and delete these records. It's a sensitive undercover operation. So the blockchain was really critical because it was decentralized and immutable, meaning it can't be changed.
We were able to follow the trail. And that's why I say bought for the blockchain. We wouldn't have been able to bring this case or this indictment. In fact, I mentioned knob, but I didn't mention the other agent.
The crazy thing is they weren't even working together. But another agent on that task force who was a secret service agent on detail to the NSA, who was one of the US government's experts in encryption technology, it turns out he had stolen to him 25,000 Bitcoin from Russell, which today. That would be worth just over a billion dollars. And he had staged, by the way, he had made it look like the Silk Road, Russell Brooks, right hand man, who was by the way a grandfather in Utah, if you can believe that, the right hand of the Silk Road, he had staged the whole thing to make it look like that individual had stolen the 25,000 Bitcoin.
So Russell Brooks says, you know, what is my right hand man doing stealing 25,000 Bitcoin from my side? I know it's him. I've got to take care of this. And who does he turn to to do the taking care of?
Knob the other undercover federal agent who he's befriended over two years. So the details are quite crazy, but I will tell you again that without that blockchain technology, we wouldn't have been able to get the records because in the case of the Secret Service agent, one of the things he did was he transferred those 25,000 Bitcoins to an exchange called Mount Gox, which was a Japanese exchange that had gone belly up. Well, we went over to get the Mount Gox records and they didn't have any. They'd been, you know, the exchange had kind of gone under and Mark Carpellus.
I remember meeting with Mark Carpellus in Japan and Mark Carpellus said, you know, those records we don't have. And by the way, you guys did a seizure. You guys being the US government did a seizure warrant for Mount Gox, not just not only were we hacked, the feds seized it. Well, guess who was the affiant on the seizure warrant?
It was none other than our Secret Service agent who had stolen the 25,000 Bitcoin. I mean, really, it is just built for screenplay. This entire story. Now, it seems like if I'm getting my facts straight that there is one other about for possibly, and that is the tip.
Could you speak? I don't know how much of this is public record at this point, but who did it come from or what was the tip? How much did you have to go on? I'll tell you what is public record.
And if listeners want, you can go read. There's a 97, I think, or 90 page criminal complaint that lays out all of the facts of the story online. You can just go Google it, Silk Road agents. It's out of San Francisco.
But what happened was I was sitting in my office in San Francisco on another crypto investigation. And one of the lawyers who used to be an investigative journalist pulls me aside. Can I talk to you about something else? And I said, what?
And he said, you know, you've got, I think you've got a mole or someone up to no good, you know, on your payroll. They're moving cryptocurrency. And I thought, oh, here's sounds like a real conspiracy theory. Which of course, I was in San Francisco.
I hear a lot of them write about governments. It's bad. And you know, I thought, okay, this poor agent, I've got to go clear this person's name because here's this, you know, lawyer, former journalist spreading rumors. And I thought, probably if he's moving Bitcoin, it's probably, you know, a poorly backstopped undercover operation.
So I actually, that was the tip I got. And I actually was really started to look into it more to clear the name and just, you know, then I thought, oh, this information was correct. But I did look into it. Like I said, I got a couple agents and it's not a popular thing to go to agents and say, I want to investigate some other agents, right?
Okay, but not crowd pleaser. No, but I got a couple agents who knew. A thing or two about the blockchain and we hopped on wallet explorer and started looking at some flow of funds and saw, wow, this is a lot of cryptocurrency moving around. And then what flipped in my mind, Tim was the moment where I saw emails that this individual had sent to crypto exchanges saying, please delete these records.
And I thought, now, if this is undercover and you're in the government, you don't want to delete evidence. You want to preserve evidence. So that's how I knew something was amiss. But we only got a tip about one agent.
And of course, that one agent, once we kind of solved, who've done it and we knew he was extorting Ross Elbrook in the Silk Road and we knew he was selling information in the government's case, we thought, oh, that's probably who stole the $25,000. You know, Bitcoin as well. So we were just thinking, that's who did it. It wasn't the Silk Road administrator.
But in fact, I remember on Christmas Eve getting a call from one of those agents and he said, Katie, I don't think it's him. The patterns, the movement of money, the kind of services that they were using to obfuscate, they're not the same person. The MO is different and we've got someone else who stole that Bitcoin. And so then we launched kind of a separate investigation, Tim, who stole a billion dollars worth of Bitcoin, a billion now.
Oh, yeah. If I could pause for a definition, please. Sure. What exactly is a federal prosecutor?
Oh, a federal prosecutor is a lot of people who have district attorneys or DAs, right? That is a local prosecutor. A federal prosecutor is another named for his assistant US attorney and a federal prosecutor takes those kind of crimes that cross state lines or that are of a certain kind of subject matter that the federal government has deemed are also federal crimes. Now, a lot of things could be both.
You could have certain crimes that could be prosecuted at the state level or they could be prosecuted at the federal level and then you have other crimes that could only be done by one or the other. So my job as a federal prosecutor was to kind of investigate and bring to justice where crimes occurred. Now, another important part of the job of being a prosecutor is knowing when not to bring a case where even though the facts support a charge because what I always say is the government wasn't hurting for business. Unfortunately, there are a lot more criminals and there are resources to prosecute.
And so one of the things as a prosecutor that you really want to do is look for what are the worst of the worst? Where are you going to get the most bang for the buck here? What is your theory of punishment? Is it deterrence?
Is it punishment? Like why are we doing this? And so you really need to look for kind of the most important cases. And by important, I don't mean high profile.
I mean important for justice to be served. I would imagine, I mean, this is me knowing nothing about this, but also important possibly as a judge. So important possibly as a setting of precedent or otherwise acting as a domino that knocks over or helps to possibly knock over other dominoes. I'm looking at a letter which is online at a16z.
That's the entries in Horowitz website a16z.com. And this is the hiring announcement by Ben Horowitz. Certainly of the namesake, the reason Horowitz. Ben has been on the podcast as well.
So is Mark for that matter. And I want to read just a portion of this letter. There's a lot to it, including some Nicki Minaj lyrics for people who want to see. Sean Layler.
I'm not going to read those. But here it is. Quote, as I learned more about her career, I was even more impressed. She stood up to murderous motorcycle gangs and cartels.
Shout down organized crime. Nailed Rico murderers. Again, that acronym that I wanted to find uncovered the largest money laundering in cyber crime rings and stop white collar crime and pull a corruption through it all. Her prosecutorial record, not a word I read every day, was whatever in zero.
She never lost a case, not once, not ever. Okay. So bookmark, we're going to come back to it. Okay.
What? And I'm going to hold a couple of possible answers to my fourth kind of question off the table. So the working harder or preparing harder, I understand that you do both. Meaning you work and focus very intensely.
And you've had a reputation for that for a long time. But what do you think you have done differently or how have you approached things differently that has helped you to have this record? Well, that's a great question. If it's easier to kind of swap places, how would your friends who really know you and have seen you over the years?
How would they explain it? If that's easier to answer. Well, let me take a stab at both. And I will put a pin and re-go.
We'll come back to that. I mean, one of the jobs I had as a federal prosecutor is going to before a grand jury. Right. That's a secret jury presenting evidence and seeking an indictment.
Another kind of job of a prosecutor is meeting with the witnesses in a case and trying to maybe get them to flip, bringing, you know, evidence to bear developing evidence. It's also working with agents. And it's to get agents motivated in some cases to go, you know, work nights and weekends to go chase the lead, for example. The other thing that you do as a prosecutor is you go to court, just like you see on TV, you know, on order.
Like the prosecutor stands up and, you know, makes arguments to the judge. If it's a judicial argument or if it's a trial, makes an argument to the jury. So that's a little bit about the job of a prosecutor. I think one of the things as I think about it that I did differently was, well, first of all, I just had an amazing mentor at the Justice Department.
So put a pin in that and we'll come back to him in a minute. But one of the things I did differently is just, I think it's really important to, obviously, you want to be honest with you. Obviously, you want to make sure that you're charging the right case and you know, you have all your evidence because even though 95% of federal cases plead guilty, at least in those days they did, some go to trial. And to me, never know which ones are going to go to trial or which ones are going to plead guilty.
The ones you think, oh, they'll take a plea. They surprise you. The ones you think will go to trial, surprise you and take the first plea. Like you just never know.
And so one thing I always did is I thought to myself, I have to prepare this case as if it's going to go to trial. And I have to convince a jury. And how many can convince that jury that this is the right case to bring, that it's righteous and that the law was violated. And that what I'm asking for is frankly a no-brainer.
One of the things I did was I developed something called, I didn't develop the concept of a reverse proffer, but I'll tell you about what I did. That is sometimes you just felt like maybe there's something lost in translation. Like maybe this defendant doesn't understand the evidence I have against them. Who knows?
Like maybe their lawyers telling them, maybe they're not telling them, maybe they're telling them, but the defendant doesn't really trust their lawyer. And so I did something called a reverse proffer, which is I said, with the permission of the defense counsel and defendant, I said, hey, would you let that defendant come into my office? And if they did, marshals, can you bring the defendant to the office? If the defendant was in custody, they'd come shackled.
If they were out of custody, they'd just show up in a street close with their lawyer. And I would sit him down in the conference room at my office, and I would give them a little snapshot of here is a kind of flavor or sampling of the evidence I have against you. That a jury is going to hear. And here's how I'm going to present it.
And I want you to be aware, like with this evidence staring down the face, do you want to go to trial or not? And I think a lot of times seeing what would be presented and seeing, oh, we do have all of these witnesses who will say X, Y, and Z cause the defendants in some way. Cause the defendants in some cases to say, no, I want to change the circumstances here. I want to stop the bleeding, so to speak.
Because obviously, if you go to trial, the sentences tend to be longer, the judge pronounces always the judge pronounces the sentences. But when you're in a trial setting, you often get a lot longer than if you take an earlier guilty plea. So reverse proffer was one thing. I think another thing that comes to mind is just being able to develop a rapport, not just with the defendant or defense counsel, but with the witnesses.
Witnesses are some of the most important evidence that you can have in an investigation. And in a number of cases, I was doing particularly gang cases. Why is some witness or some member of the gang, like, why are they going to trust you, a government prosecutor? What can you do to build that trust and to really talk to them in a way that is relatable?
And I think that was something that I spent a lot of time trying to develop, is putting myself, I can never put myself in the shoes of some of the folks that I encountered, but trying as best I could to think, what's motivating them, what might they be scared of, what's holding them back from wanting to cooperate with us. And through doing some of those things, I think we were successful in being able to flip some key witnesses. So that could contribute to it, but I would be remiss if I didn't say that I had just an amazing mentor. He was actually my boss at the Justice Department, and he was an incredible prosecutor and just watching him that he was a good person.
And also, I think I counted for a lot of it. And also I had incredible case agents and FBI agents and everything. So I can't really take credit for all the verdict records. There's a lot that goes into it.
Yeah, I would imagine it's a team effort. Just a quick thanks to one of our sponsors, and we'll be right back to the show. This episode is brought to you by LinkedIn Jobs. The New Year is here, and it marks a first start for your small business.
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Terms and conditions do apply. If we take a closer look at this mentor, what were some of the things if different from those you've just mentioned that stand out as making him an excellent prosecutor? Or an unusually good prosecutor? Yeah.
Well, I think the key thing is he did not care. I mean, I'm not suggesting prosecutors, most career prosecutors are not thinking of their next job. So just to be clear on that. But really with him and his name is Will Frontson.
You know, I've worked with a lot of amazing mentors, Tim and my career justice Kennedy, the Attorney General, Tech CEOs and folks in VC. But this guy is not household name. His name is Will Frontson. And I think one of the things that comes to mind when I think of Will is he just didn't care about anything other than just in that moment doing the right thing and doing justice.
And he didn't care about what his next job was going to be. He didn't care about the consequences. He didn't really even care. I'm not endorsing this necessarily.
But he, I remember some judges, I remember being court once, where Judge Judge said, Mr. Frontson, why do you shake your head at me like that? Like I'm stupid. No judge would ever usually say that to a prosecutor.
But he had this. Yeah. And Will had this prosecutorial swagger that was unique to him. He took down MS-13.
I mean, that's what I think there was a news article that described Will's prosecutorial swagger. But in my case, one of the things he did that made him an amazing leader was he first of all threw me into the defense. But he also had my back when I needed it. And he recognized when I was ready to lead.
You know, in fact, I did it by Kermiter Case involving the Mongols and the Hells Angels. And it went to trial. That was the one of the ones that I thought for sure would be guilty. And instead went to trial and it lasted two plus months.
And you know, Will became my second chair. He became my deputy, even though he was my boss. And you know, it was a high-profile murder case. He said second chair during that case.
But I think he also had my back. And when I tell you, he doesn't really care about his next job, can I share a story involving Google? Sure. Yeah, well, there was a murder case.
We were doing a different one than the one I just mentioned. It was a gas station robbery gone on. It's a key track. I'm just kidding.
You have a lot of murders. Yeah, it was a really sad circumstance of a guy who was shot over $250 while he was working a second job at night. And actually, we had some amazing evidence that we knew it was in the defendants in Google mailbox. It was like Google voice records and stuff.
And so we got a search warrant, which is different than a subpoena. We had to go to the court and we had to go to judge, prove probable cause and get a search warrant. And Google just simply put it in the line and basically told us to get in line. And we get to it when we get to it.
And we said, you know, this is a court order. This is now unsealed. So I can say this publicly at this time. It was sealed.
It was a court order. It's a murder case. You know, we need these records. And they basically told us, well, we'll get to it when we can get to it.
And you know, we'll say, you know, that's just BS. I mean, we go around expecting mom and pop stores all the time to comply with search warrants or people, right? Ordinary citizens like, why should Google get a pass? And I said, you're right.
That's BS. We're not going to have to have a fair chance to comply first. But if they don't, like, let's go to the court. They should comply with the same rule everyone else has to.
And we gave them several chances and we said we're going to go to court and they basically ignored us. And we are Google. We will crush you. We went to court.
We got them held in contempt of federal court. If they didn't produce these records, what ended up happening, and this was all under seal at the time, was, I don't name names, but someone at Google, I up called the political appointee who was running our office at the time and basically suggested that we should get this undone. And, you know, we were in the jurisdiction of Google, you know, we're in the Northern District of California and Will and I were both like, no, why should we do that? Like, they didn't, this is a murder case where the victim's family is relying on us to, you know, bring the best case and the best case involves those records.
And we're not going to just stand back because it's Google, you know, calling up and suggesting we undo this motion. So we, we stuck to it. And that was a case where Will and another boss might have said, you know, let's kind of figure out a way to broker a great settlement here and make this go away. And he said, I don't care who they are.
You know, he really just didn't care. So he was fearless. And also he was egoless. Like I said, he let me often, and if we knew I was ready to lead, he would let me first tear a case.
So that really stands out to me. Fearless and ego is, is a formidable combination, right? Rare, rare, rare. Rare.
And I do not want to fight that person on anything. That's going to be very difficult. Now you mentioned fearless. And you also mentioned, you know, how's angels Mongols.
This might be a good place to define Rico. I don't know if that's a direct hearing. You see, you got to be there, a racketeering. It's the racketeering in organized corrupt, I think, institutions or racketeering, you know, and corrupt organizations.
And it's basically a federal statute where it just creates a class of crimes that are more serious if you've done certain predicate crimes. So for example, it often involves cases involving conspiracies and then you allege several predicate acts. So in furtherance of the conspiracy, maybe there was some, you know, gun trafficking. Maybe there was money laundering.
Maybe there was fraud. And so I did a number of Rico. There's also, I'm not going to bore you with acronyms, but there's a VICAR. Those are kind of this class of cases.
Again, where you're talking about a corrupt organization. That's the CO in Rico, RICO. And what it means is basically an organized criminal enterprise. And you have to prove they were organized.
You have to prove they were serving a common goal. You have to prove they did certain things in furtherance of that organization or conspiracy is basically what Rico is. Does that also help you to prosecute people who are in leadership positions who don't necessarily, for instance, carry out a hit or murder themselves, but they issue the order for that hit. Does RICO play a or the, I suppose, not sure if the laws would put it, but does that assist you in any way in prosecuting, thinking about these larger groups, health angels, Mongols?
You mentioned MS-13, for instance. Yeah. It's definitely a tool in a prosecutor or an agent's toolkit to kind of wrap up an organization, like you said, if otherwise the individual might not have been on the hook for actually like a murder. Maybe they just commissioned it, for example.
Now, there are other laws that you can do, Tim. You don't only need RICO. There are conspiracy laws, but RICO is just kind of another tool that one might use. And it also enables you, a trial to get in what are known as, like I mentioned, predicate acts.
So, you know, at the Hell's Angels and the Mongols trial, we included predicate acts like there's, I don't know if you remember the Loughlin River Run Riot and a series of other murders and a whole host of other criminal conduct. Then the jury heard, and we think, you know, not we, but the Congress who passed the law because, of course, prosecutors don't make the law. They just enforce the law. And so Congress passed this law saying that the jury would be able to hear all of these different kind of predicate acts.
Now, standing up to Google is, or a company like Google, a tech company with incredible power, wide reach, shows a level of fearlessness with respect to, suppose many aspects of life, including possible, maybe not career advancement, career options later, who knows, like politics and within the office, et cetera. When you're dealing with, say, prison gangs, right, like in Oyster Familia, one of the world's largest prison gangs, and other groups that are associated with intense violence. How have you thought about personal safety? And I'm struggling to ask a more pointed question, but like, what does the self talk been so that you can operate effectively in a job that entails what I would imagine to have some degree of personal risk?
And that's a meandering question, but I'd love to at least open the door to just hearing your thoughts on that because I don't know if I would have the courage to do it, quite frankly. I think, you know, you might, if you see some of the victims' families and you might, if you kind of saw some of the witnesses that were intimidated or some of the consequences if you didn't. I mean, I completely hear what you're saying, Tim, and I don't dismiss it because it's certainly something that I've thought about, but I also knew that in those moments, there was something really wrong going on, and someone had to step in and do something about it. And it wasn't just me.
It was like I said, a lot of really brave men and women, law enforcement personnel and other prosecutors, and by the way, judges, and even juries. You know, jury, there are plenty of instances of jury intimidation, but it's critical for our system to work because obviously we can't just be running amok with no laws and violence. I think in the case of no one's familiar, you mentioned a prison gang, this is an entire world people don't realize. I mean, and you think, oh, they're in prison.
So therefore, then they're locked up. But the truth of the matter is, and there's actually a great 60 minutes episode on this. It's called Operation Black Widow, by the way. Running criminal enterprises from prison is pretty common.
You know, there's a whole system that goes into taxing criminal activity on the outside in exchange for protection on the inside. And the people who are running these gangs, frankly, a lot of them could be running businesses. I sometimes think if circumstances were different, they're hustlers, they're dedicated, you know, they have a lot of passion. I'm not trying to make it sound glamorous at all because it is criminal.
I'm just saying that they're very organized. They have a whole system for getting messages outside. I remember once a judge said to me, what do you mean that defendant is, you know, under the influence of whatever drug it was? They're in prison.
And I thought, oh, you're on or like, so naive to think that they're not able to get contraband in prison. They're running the prison sometimes. And so this case you mentioned, was familiar, was a really large gang. It was, you know, they affiliate on the outside with the North Tainos on the street.
And then like I said, there's a whole tax system. Some of the street gangs will pay into tax, essentially, into inside the carnalys inside so that if they ever get hooked up and put in prison, then they're protected within prison. But one thing I think that you might think, oh, these dangerous- When you say large, just could you give us an idea of what large means? Well, they're worldwide.
I mean, like in the case of MS-13 or in West Virginia, I mean, it's not just in the U.S. But they're certainly in every city. I mean, you're talking about thousands and thousands, if not tens of thousands of individuals affiliated with these. But I prosecuted West Virginia, I indicted that case.
This was before that Silk Road case. This is in my violent crime days still. And you talk about being scared. I mean, the truth of the matter is a lot of the defendants that, and we extradited many from all over the country.
And these were the kind of carnalys. These were the big chiefs. These weren't like the street level gangs. So the carnalys are the leaders with it?
Yes. And I think we indicted over a dozen. Most ended up pleading guilty. Some did go to trial.
But you think, oh, well, those are going to be the scariest of the scary. But again, like I told you earlier, it's really a human thing. And different people, even if they're in a really violent prison gang, react differently to things. Now, a lot of, I think a lot of the listeners also might sell it, but include myself, and probably even this, like, we think, oh, it would be the worst thing in the world to go to prison.
We don't want to go to prison. The interesting thing is a lot of the people involved in these prison gangs don't necessarily think that way, Tim. It's like, it's not really a threat to say I'm going to put you in prison. That's kind of like where they shine sometimes.
And so talk about trying to deter criminal activity against that backdrop. But I think a lot, because of that, a lot of those individuals sometimes think, this is the cost of doing business. Like, I'm going to get hooked up. Part of the game.
Part of the game. So it's not a personal thing. And the thing I try to do is to just treat the defendants with respect, treat all the subjects with respect, and not make it personal. And we ended up flipping a kind of key witness in that case, a guy who is now in the witness protection program.
So I won't say too much about him, but he did end up testifying. So I can tell you that because it's all public record. He was a hostile and he was a hulking huge guy with tattoos who came in and out of my office for weeks, and as we tried to flip them. And he eventually came around to testify.
But, you know, most of them, I mean, it's kind of violates, I think, an oath to the gang that you would never testify. That is the worst thing you could do in the gang's eyes. So you mentioned earlier that one might imagine that these cases would be the scariest. Is there a moment where case or an incident if you're willing to share where you were actually scared, rightly or wrongly?
You know, I don't really want to get into it because I call it opposite to him. Let's just say I've taken measures and I won't really say much more than that. You mentioned I have a CCW. It's not because I'm a gun nut or I'm passionate about guns.
It's just because you know, you want to make sure you can always protect yourself and I've taken other measures as well. And I'm obviously not going to get into them here. But I think, like I said, it's really just in the moment of that case, you just feel like your job. And I felt like my job was to actually as cheesy or cliché as it sounds, pursue justice.
And what kind of message would that send if I just like walked off the case or walked away? And certainly a lot of people I worked with felt that way too. It wasn't just me bringing these cases. There are a whole lot of other people.
That in some way reflects, well, it certainly reflects, I think, debasque, superior personality. But also just a few chapters in the wild varied life of Katie Hahn and I'd like to switch gears in a sense. And ask you when you first heard about Bitcoin. It was right after that Mongols-Spiker murder trial I told you about with the Hell's Angels ended and that had been a couple months.
And you know, after that, I had just really done a lot of violent crime cases over the course of a decade. And I remember thinking, I'm ready to switch to something else. Like maybe I'll leave. I don't really know what I would do, but maybe I'll do something else.
And my boss came to me and said, you know, let's have you put some of these investigative skills you've brought to use against criminal enterprises to technology and cybercrime. And I said, okay, great. You know, we're here in the Northern District of California. It seems like sensible to do some cybercrime.
And he said, well, here's what we want you to do. We want you to investigate Bitcoin. And you know, Bitcoin is this kind of criminal technology and we need to kind of stop it, basically. And I remember, and so that was around 2012.
And I remember going home and talking to my husband who knew we were about Bitcoin and I did. I had not heard of it at all. That was the first time I ever heard of it was 2012. So I feel like I was kind of lead to the party.
I mean, it was the Sittoshi White Paper was in 2008. This was four years later and I had never heard of it. And my husband told me, you might want to learn what it is before you go around talking about it. You're going to prosecute it because it sounds a little foolish.
And I said, what do you mean? He said, well, look at this wiki page and tell me if you think you could prosecute it after. And the more I learned about it, I pretty quickly realized that it would be like saying, I'm going to prosecute cash or I'm going to prosecute the internet or something like that. Like it's not possible.
Number one, and it's also not desirable. But what instead ended up happening was prosecuting some of the nefarious uses of cryptocurrency. Just like we prosecuted, like I said, like I prosecuted a 25-count indictment for mortgage fraud conspiracy. You know, and they used cash and they used wires.
So to here were some cases like we talked about Mt. Gox. We talked about the Silk Road Twist. There was also the BTCE case.
There, there was criminal use of cryptocurrency. So we prosecuted some nefarious use cases of it. And in the course of that, I ended up starting to get to know some of the early players in the crypto space. Tim, I also started realizing more and more what I had kind of realized early on, which doesn't seem all criminal.
It seems like there were actually a lot of people trying to build some really important products and services that can be used for good. And so that was kind of how I frankly got into the space early days. Now I was in the government. I always joke like I bought Bitcoin earlier than anyone I know.
It was undercover in the government. So I never kept any and I've never bought any one. I was in the government, which is probably a shame because I don't need to tell you what the price was back then. Okay, so feel free.
Like we can always edit later, right? But I'm curious. When you got to know these some of the earlier players in crypto, I mean, I did read one quote that I thought was fantastic from, I mean, we can mention him by name, of course, but he said he was terrified of you. And this was Zuko Wokkak.
And which makes sense. All right. I mean, it does make sense on a bunch of levels, but how many of those early contacts do you think played nice because they in their mind had the sort of maximum of keep your friends close in your enemies close or through other motivation for other reasons, right? You are very good at developing rapport, but I have to imagine that a lot of these people were hesitant or tentative or had some misgivings about engaging.
I'd love to just hear you speak to that. If anything comes to mind. Well, that's the first I thought of it. But it's an interesting way to think about it, but keep your keep your enemies close.
I think what ended up happening though, because I did establish the government's first crypto task force back in those days, which was comprised of a bunch of different agencies. I think what ended up happening, it might have started out that way, Tim, and I can certainly appreciate why now being in the space is like I know encounter people and I'm like, Oh, we don't want to talk to the government. And, you know, I think that's just born of they don't really know that there are a lot of people in the government and not everyone thinks the same thing in the government, right? It's made up of hundreds of thousands of people and some people.
The organization. Right. Right. And then once you actually start making the connections and meeting people, they realize, you know, you're not so bad.
Like it doesn't seem like you want to close everything. Like we thought that you just wanted to close down everything. You know, it turns out that maybe you just want to keep bad actors off X Y or Z platform and, you know, turns out we want that too. Right.
A great example of this is, you know, Coinbase and you know, I'm on the board of directors of Coinbase now, fast forward several years. You know, Coinbase did a great job of this in the early days. Like, I don't think it was about keeping me an enemy away. I think it was more about it's not good for their business to have criminal activity on the platform.
I mean, they don't, you know, it's not like they're cozying up to the government either, but I think it's, you know, every kind of pragmatic and good business leader thinks, why would you want a bunch of nefarious activity on your platform, especially if you're trying to build a business to kind of change the world. So I think you might be right though in the early days, but fundamentally after they saw some of the bridge building that we in the government in those early days started trying to do and we did things like we hosted a summit where we, you know, is invite only, but we invited some of the early folks in the space. I did this with a number of different agencies and then the agencies would come in and talk about what their equities were. And I think that kind of two way street and dialogue is really important because what you want is you want, you know, you mentioned Zuko.
I want Zuko to hear, you know, what are some of the consequences of privacy coins and I want people in the government to hear what are some of the real benefits of privacy coins. And I think it's really important. And I should say, very, very, very smart guy. I mean, very, very, very, very smart.
Absolutely. I remember meeting him actually. I remember exactly what you're talking about because I remember meeting him and I've kept in touch with him since that time. But, you know, I remember, it's damp, which was an early crypto exchange, which is in Slovenia.
They featured in our Silk Road twist case we talked about earlier. And I remember, I needed their cooperation for some records. And I remember them thinking, oh, this US prosecutors are coming. We think it's a trap, you know, and I didn't, the State Department told me, you can't violate the sovereignty of Slovenia.
We can't have you meet on Slovenia ground unless this and this are followed. And I said, what? I'm going to lose the evidence. The guys are willing to meet with me now.
And they said, well, we did just seize a yacht in a DEA case off the coast of Croatia. Maybe we could arrange the meeting there in international waters. I said, okay, if they didn't think I was coming to, if we can do something, I was not coming to trap them. If I suggest a DAC's yacht to meet on, I'm pretty damn sure they're going to cancel the meeting.
Just casually drop that one in. Just meeting offshore guys. I'm really not trying to set you up. But anyway, long story short, we ended up meeting in Slovenia.
I hope we didn't violate any sovereignty or anything there. But we ended up meeting and that was early days. And I think they ended up seeing what we were trying to do and realizing it was actually good for the space and ended up providing us with the records we needed. Amazing.
And it's not just Bitstamp or Coinbase. I think a lot of companies, especially over the last several years, have tried to proactively engage with regulators. But I've also, like I said, I think just as important is that government also for its part keep in touch with the crypto industry. And why do I say that?
One key reason is because this technology is changing so fast. And I think when I talk to my old government colleagues, they're like, God, we just kind of finally had mastered Bitcoin. And then we have each and now we have these other, you know, dozen. And now of course we have over a thousand crypto assets.
It's really hard for government employees with kind of the training available to keep up with this technology. Frankly, it's not just government places, it's hard for any of us, even those of us in the space to keep up with how fast moving this is. So I think there's also just like an important education and training component that benefits the government to have these more open dialogues. Of course, if crypto projects feel like the government's just going to out to shut them down, they're not going to be willing to provide that two way streets.
So I think it's really win-win to have these conversations. I don't want to be naive or Pollyanna. I should have said, I'm not saying one crypto industry in the government should team up and spend every day together. Nothing like that.
But I do think this kind of ongoing dialogue is really important. I agree also because we're not the only country developing blockchain based technologies and cryptocurrencies. I mean, just like artificial intelligence, so it's important to have an informed global perspective and geopolitical perspective when thinking about a lot of these things. Just for context, for people who are interested, Zuko is the, he is still CEO of the electric coin company, ECC, which is a for-profit company leading the development of what is known as Zcash.
Those people who want to look into that. Now, on the pro, let's just focus on crypto and not blockchain explicitly for a second. But on the pro crypto, let's say pro BTC, Bitcoin side, you have kind of true believers who can sometimes paint with broad strokes and miss a lot of nuance and details. Then on the anti crypto side, you find a similar kind of militant anti crypto people who have somewhat, maybe naive or simplistic arguments.
My understanding is that it was in Mexico City of all places, that you debated Paul Krugman. Is that right? Yes, that's right. Who publicly said that you give the best thesis for crypto he had heard.
Now, he's notoriously anti crypto. What was it about your argument that he found compelling, if you remember? Well, I don't want to say he said it was compelling. He said I did the best defense.