US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
A HIDDEN website operated by a San Francisco man using an alias from "The Princess Bride" became a vast black market bazaar that brokered more than $1 billion in transactions for illegal drugs and services, according to court papers made public today in New York.
A criminal complaint in New York charged the alleged mastermind, Ross William Ulbricht, with narcotics trafficking, computer hacking and money laundering. A separate indictment in Maryland also accused him in a failed murder-for-hire scheme.
Users of the website, Silk Road, could anonymously browse through nearly 13,000 listings under categories like "Cannibus," ''Psychedelics" and "Stimulants" before making purchases using the electronic currency Bitcoin.
One listing for heroin promised buyers "all rock, no powder, vacuum sealed and stealth shipping," and had a community forum below where one person commented, "Quality is superb."
The website protected users with an encryption technique called "onion routing," which is designed to make it "practically impossible to physically locate the computers hosting or accessing websites on the network," court papers said.
Federal authorities shut the site down and arrested Mr Ulbricht on Tuesday afternoon in a branch of San Francisco's public library.
Mr Ulbricht was online on his personal laptop chatting with a cooperating witness about Silk Road when FBI agents from New York and San Francisco took him into custody, authorities said
The defendant announced in a website forum in 2012 that to avoid confusion he needed to change his Silk Road username, court papers said. He wrote, "drum roll please ... my new name is: Dread Pirate Roberts," an apparent reference to a swashbuckling character in The Princess Bride, the 1987 comedy film based on a novel of the same name.
Mr Ulbricht, 29, made an initial appearance in a San Francisco court today, authorities said. There was no immediate response to messages left with his lawyer.
The court papers cite a LinkedIn profile that says Mr Ulbricht graduated from the University of Texas with a physics degree and also attended graduate school in Pennsylvania. It says he has focused on "creating economic simulation" designed to "give people a firsthand experience of what it would be like to live in a world without the systematic use of force".
Along with drugs, the website offered various illegal services, including one vendor who offered to hack into Facebook, Twitter and other social networking accounts and another selling tutorials on how to hack into ATM machines. Under the "Forgeries" category, sellers advertised forged driver's licenses, passports, Social Security cards and other documents.
As of July, there were nearly 1 million registered users of the site from the United States, Germany, Russia, Australia and elsewhere around the globe, the court papers said. The site generated an estimated $US1.2 billion ($1.28 billion) since it started in 2011 and collected $US80 million by charging 8 to 15 per cent commission on each sale, they said.
Undercover agents in New York made more than 100 purchases of LSD, Ecstasy, heroin and other drugs offered on the site, the papers said.
In July, US customs agents intercepted a package from Canada as part of a routine search that contained counterfeit identifications, all with Mr Ulbricht's photo, the papers said.
When confronted by agents at a San Francisco address where he was renting a room for $US1000 a month, he "generally refused to answer questions .... however volunteered that 'hypothetically' anyone could go onto a website named Silk Road and purchase any drugs or fake identity documents the person wanted."
The Maryland indictment alleges that Ulbricht told an undercover investigator posing as a drug dealer earlier this year that he would pay the undercover to "beat up" a former employee he believed had stolen money from Silk Road.
Later, he wrote to ask whether he could "change the order to execute rather than torture," and agreed to make two payments of $US40,000 each to get the job done.
Re: US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
Re: US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
Three alleged 'Silk Road' employees charged with conspiracy
Three alleged former employees of "Silk Road", the online marketplace prosecutors called a "sprawling black-market bazaar", were accused of conspiring to traffic in drugs, hack computers and launder money.
Andrew Michael Jones, Gary Davis and Peter Phillip Nash were charged in a US federal indictment unsealed on Friday in Manhattan with helping Ross William Ulbricht, the alleged mastermind of Silk Road, to maintain the site.
"During its more than 2 1/2 years in operation, Silk road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to well over 100,0000 thousand buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions," prosecutors said in the indictment.
Ulbricht, who was allegedly known online as "Dread Pirate Roberts," was arrested in October and charged with running Silk Road, where anonymous users paid Bitcoin digital currency for illegal drugs, malicious software designed for computer hackers and other illegal products.
He's being held without bail. While arguing against his release on bail, prosecutors in New York said he tried to arrange the murder of six people to protect his business.
The government claims Jones and Davis worked as site administrators for Silk Road. Nash was the primary moderator on Silk Road discussion forums, prosecutors said. Ulbricht paid his site administrators and forum moderators salaries ranging from $50,000 to $75,000 a year, according to the government.
The three men are charged with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy. Jones was arrested yesterday in Charles City, Virginia. Davis, of Ireland, was arrested in that country yesterday. Nash was arrested in Brisbane, Australia.
Curtis Green, another former Silk Road administrator, pleaded guilty last month to a cocaine conspiracy charge in federal court in Maryland. Green was charged with helping an undercover agent of the Drug Enforcement Administration arrange the purchase of 2.2 pounds of cocaine for about $27,000.
USA Today
Re: US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
Silk Road 'pirate' Ross Ulbricht accuses US government of stealing his $38million Bitcoin booty
THE internet "pirate" accused of running the notorious illegal-drug-peddling website Silk Road claims that the feds are the real buccaneers — robbing him to the tune of $US33.6 million ($38 million) worth of the encrypted, virtual currency Bitcoin.
Ross Ulbricht — who was arrested in October for allegedly masterminding the mysterious "deep web" site — recently filed legal papers in Manhattan federal court admitting he "has an interest as owner" of the more than 173,000 Bitcoins the government seized through forfeiture from Silk Road.
Valued at $US33.6 million, these Bitcoins are assets the government claims were used to facilitate money laundering in support of a host of crimes, including six failed murder-for-hire plots and the sale of cocaine, heroin and other illicit drugs over the internet.
Ulbricht — who allegedly used the workplace alias "Dread Pirate Roberts", a reference to a character in the 1987 cult film The Princess Bride — said in a notarised December 11 statement that he believes the virtual currency should be returned to him because Bitcoins are "not subject to seizure" by federal law.
Ulbricht, 29, now admits the Bitcoin fortune is his — even though he’s previously denied any wrongdoing regarding Silk Road and claimed through his lawyer that the feds arrested the wrong guy.
Ulbricht’s attempt at forcing the government to return the Bitcoins marks the first time the courts have been asked to determine whether the controversial virtual currency is an asset that falls under forfeiture laws, legal experts told The Post.
Daniel Wenner, a white-collar lawyer and former Brooklyn assistant US attorney, called Ulbricht’s argument "very creative and cutting edge," but said he’d be "stunned" if a judge sided with the alleged Silk Road operator.
"I think one would be hard-pressed to convince a court that something you can use to purchase goods, like Bitcoins, isn’t property," he said.
Attorney Jeffrey Alberts, who used to specialise in asset-forfeiture actions as a federal prosecutor for Manhattan US Attorney Preet Bharara, agreed. He said Ulbricht should have "a difficult time" proving his argument because typically "anything of value" can be seized in money-laundering cases.
"Artwork, horses and even intellectual property, such as domain names, have qualified, so there’s no reason to think Bitcoins wouldn’t," he said.
Both Bharara, whose office is handling the Silk Road case, and Ulbricht’s lawyer, Joshua Dratel, declined comment.
Bharara’s asset seizure from Silk Road was the largest-ever by the feds that involved Bitcoins.
News.com
Re: US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
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Re: US authorities shut down alleged Silk Road black market, charge accused mastermind Ross William Ulbrich
