SpaceX headquarters in Los Angeles, California.
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A SpaceX engineer has pleaded guilty to a charge of domestic trade, the agency announced Thursday after using information on the dark internet to trade public securities with non-public information.
The DOJ’s criminal case against James Roland Jones of Hermosa Beach, California, comes after an FBI investigation in 2017.
In the government announcement about the plea agreement, Jones is identified as a SpaceX engineer, although the agency does not specify whether he is currently working for the space company or whether he did so at the time of the fraud.
The Securities and Exchange Commission at the same time accused Jones of running a “fraudulent scheme to sell ‘insider tips’ on the dark web in exchange for bitcoin. The SEC did not name SpaceX in its complaint.
The case does not appear to be related to information about or regarding SpaceX.
SpaceX, the DOJ and the SEC did not immediately respond to CNBC’s requests for comment.
The DOJ said Jones used the name “MillionaireMike” to procure information – such as address, date of birth and social security numbers – on the dark web. The dark web, as defined by the SEC, “refers to anything on the Internet that is not indexed by, or accessed through, a search engine such as Google.”
Jones then used this information to conduct financial transactions on material, non-public information, the DOJ claims. In April 2017, a secret FBI agency gave Jones ‘alleged inside information related to a bursary’, the DOJ said.
“From April 18, 2017 to May 4, 2017, Jones and a conspirator conducted several security transactions based on this alleged inside information,” the DOJ said.
The SEC has charged Jones with violations of the Federal Security Act against fraud. Jones agreed to split the agreement with the SEC, and under his plea with the DOJ, he was sentenced to a maximum of five years in federal prison.
“This case shows that the SEC can and will pursue violators of security legislation wherever they work, even on the dark web,” David Peavler, director of the Fort Worth Regional Office, said in a statement.