“End Of The Silk Road: FBI Says It’s Busted The Web’s Biggest Anonymous Drug Black Market”

October 3, 2013
Ross William Ulbricht
“Ross William Ulbricht, alleged to be the “Dread Pirate Roberts” behind Silk Road’s drug black market.”

Forbes on October 2, 2013 released the following:

By: Andy Greenberg, Forbes Staff

“After two and a half years running the booming anonymous narcotics bazaar known as the Silk Road, the drug kingpin who called himself the Dread Pirate Roberts has allegedly been unmasked.

On Wednesday, the FBI announced that they arrested 29-year-old Ross William Ulbricht, the Silk Road’s accused administrator, in the Glen Park branch of the San Francisco Public Library at 3:15 Pacific time on Tuesday. Ulbricht has been charged with engaging in a money laundering and narcotics trafficking conspiracy as well as computer hacking. The Department of Justice has seized the website of the Silk Road’s as well as somewhere between $3.5 to 4 million in bitcoins, the cryptographic currency used to buy drugs on the Silk Road.

Earlier this summer, the Silk Road’s administrator calling himself by the Dread Pirate Roberts pseudonym gave his first extended interview to Forbes over the same Tor anonymity network that has hosted the Silk Road and its users since the site’s creation in early 2011.

Forbes estimated at the time that the Silk Road was earning between $30 and $45 million in annual revenue. In fact, the number may have been far larger: The criminal complaint against Ulbricht states that the Silk Road turned over $1.2 billion in revenue since its creation, and generated $80 million commissions for its operator or operators.

“This is supposed to be some invisible black market bazaar. We made it visible,” says an FBI spokesperson, who asked not to be named. “When you interviewed [Ulbricht], he said he would never be arrested. But no one is beyond the reach of the FBI. We will find you.”

The FBI hasn’t yet revealed how it managed to track down Ulbricht in spite of his seemingly careful use of encryption and anonymity tools to protect his identity and those of his customers and vendors who visited Silk Road as often as 60,000 times per day. The FBI spokesperson declined to offer details about the investigation, but told me that “basically he made a simple mistake and we were able to identify him.”

One clue mentioned in the criminal complaint against Ulbricht was a package seized from the mail by U.S. Customs and Border Patrol as it crossed the Canadian border, containing nine seemingly counterfeit identification documents, each of which used a different name but featured Ulbricht’s photograph. The address on the package was on 15th street in San Francisco, where police found Ulbricht and matched his face to the one on the fake IDs.

The complaint also mentions security mistakes, including an IP address for a VPN server used by Ulbricht listed in the code on the Silk Road, mentions of time in the Dread Pirate Roberts’ posts on the site that identified his time zone, and postings on the Bitcoin Talk forum under the handle “altoid,” which was tied to Ulbricht’s Gmail address.

In his conversation with me, which took place on July 4th, the Silk Road administrator calling himself the Dread Pirate Roberts espoused Libertarian ideals and claimed that the use of Bitcoin in combination with Tor had stymied law enforcement and “won the State’s War on Drugs.”

He also said he intended to bring his marketplace into mainstream awareness, and had recently launched the first non-Tor website for the Silk Road known as SilkRoadlink, which remains online. “Up until now I’ve done my best to keep Silk Road as low profile as possible … letting people discover [it] through word of mouth,” Roberts says. “At the same time, Silk Road has been around two and a half years. We’ve withstood a lot, and it’s not like our enemies are unaware any longer.”

One remaining mystery in Ulbricht’s criminal complaint is whether he was in fact the only–or the original–Dread Pirate Roberts. In his July interview with me, Roberts said that he had in fact inherited the Dread Pirate title from the site’s creator, who may have also used the same pseudonym.

As of around noon Wednesday, the Silk Road’s forum for users also remained online, and the site’s loyal users were grieving over the Silk Road takedown and mourning the arrest of Ulbricht, whose apparent persona as the Dread Pirate Roberts was a widely respected figure in the online drug community.

“jesus christ this is TERRIBLE!!” wrote one user named danceandsing. Others suggested that users migrate to other, smaller but similar anonymous black markets such as Black Market Reloaded–another popular alternative to the Silk Road known as Atlantis went offline last week, with its administrators saying only that they shut down the business for “security reasons.”

Another user blamed the Dread Pirate Roberts’ carelessness, including his decision to raise his profile by giving an interview to Forbes. “Sorry, but when he gave the fucking Forbes interview I imagined this would be coming,” wrote a user calling himself Dontek. “Should have kept all this shit on the down low rather than publicly bragging about it.”

Ulbricht’s LinkedIn profile describes his background as a graduate researcher in materials science at Pennsylvania State University, as well as an undergrad degree in physics from the University of Texas at Dallas.

According to Ulbricht’s grandmother, Martha Ulbricht, who was reached by phone, the younger Ulbricht received a full scholarship to UT Dallas. “Ross has always been an upstanding person as far as we know and a rather outstanding person,” she said.

Ulbricht’s half-brother Travis Ulbricht, also reached by phone in Sacramento, described him as an “exceptionally bright, smart kid” who had no criminal history to his knowledge.

Asked what he did for a living before moving to San Francisco, Ulbricht’s grandmother said, “Something on the computer…a little technical for me. He was good with computers.””

Federal Criminal Case 1: New York Federal Criminal Complaint
Northern District of California, Case No.: 3:13-mj-71218-JCS-1 (Proceedings on Out-of-District Criminal Charges Pursuant to Rules 5(c)(2) and (3)) and lists the following case on the docket sheet: Southern District of New York, Case No.: 13-mj-2328

21 U.S.C. 846 – Drug Conspiracy
18 U.S.C. 1030(a)(2) – Computer Hacking Conspiracy
18 U.S.C. 1956(a)(1)(A)(i) and (B)(i) – Money Laundering Conspiracy

Ross William Ulbricht New York Criminal Complaint

Federal Criminal Case 2: Maryland Federal Indictment
District of Maryland, Case No.: 1:13-cr-00222-CCB-1

21 U.S.C. 846 – Conspiracy to Distribute a Controlled Substance
18 U.S.C. 1512(a)(1)(C) – Attempted Witness Murder; 18 U.S.C. 2 – Aiding and Abetting
18 U.S.C. 1958(a) – Use of Interstate Commerce Facilities in Commission of a Murder-for-hire; 18 U.S.C. 2 – Aiding and Abetting

Ross William Ulbricht Maryland Superseding Indictment

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


John F. Williams, an Elected Member of Warner Robins City Council, Indicted by a Federal Grand Jury

October 19, 2011

The Federal Bureau of Investigation (FBI) on October 18, 2011 released the following:

“Michael J. Moore, United States Attorney for the Middle District of Georgia, announced that John F. Williams, an elected member of Warner Robins City Council, has been indicted by a federal grand jury and was today arrested for extortion under color of official right, in violation of Title 18, United States Code, Section 1951(a); false statements to a federal agency, in violation of Title 18 United States Code, Section 1001; and tampering with a witness, in violation of Title 18, United States Code, Section 1512(b)(3).

Count one of the indictment alleges that John F. Williams did knowingly and intentionally attempt to obstruct and affect, in any way and degree, commerce and the movement of articles and commodities in commerce by extortion; that is Williams unlawfully obtained property from another person in the form of $1,720.00 not otherwise due him and as a commission in relation to the sale of a vehicle to the Warner Robins Police Department. The maximum penalty for count one is 20 years’ imprisonment; a $250,000.00 fine; three years’ supervised release; and a $100 mandatory assessment fee.

Count two of the indictment alleges that John F. Williams did knowingly and willfully make a materially false statement to the Federal Bureau of Investigation concerning the sale of the vehicle to the Warner Robins Police Department, stating that he received no payment of money in relation to the sale of the vehicle, when in truth and fact Williams received a payment of $1,720.00 in relation to the sale. The maximum penalty for count two is five years’ imprisonment; a $250,000.00 fine; three years’ supervised release; and a $100 mandatory assessment fee.

Count three of the indictment alleges that John F. Williams attempted to corruptly persuade another person with intent to hinder, delay, and prevent the communication to a law enforcement officer regarding the sale of the vehicle. The maximum penalty for count three is 20 years’ imprisonment; a $250,000.00 fine; three years’ supervised release; and a $100 mandatory assessment fee.

“My office is committed to fighting criminal activity wherever it is found, whether that be on the city streets or in the city hall,” said U.S. Attorney Michael Moore.

Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Mount Pleasant Man Charged with Allegedly Committing Federal Grant Fraud; Charged with His Wife in an Alleged Campaign Finance Fraud

September 20, 2011

The Federal Bureau of Investigation (FBI) on September 19, 2011 released the following:

“United States Attorney Bill Nettles stated today that two indictments previously returned by a federal grand jury were unsealed today. A 36-count indictment charges that Mount Pleasant native Jian-Yun Dong and one of his companies, Vaxima, Inc., committed a number of offenses relating to the fraudulent use and conversion of funds received as federal grants. The indictment charges that the defendants submitted false claims for payment of federal grant monies and that they used grant funds received for scientific research for prohibited purposes. Specifically, this indictment charges that Dong, as the president and chief executive officer of GenPhar, Inc, (1) submitted false claims to federal agencies in violation of Title 18, United States Code, Section 287; (2) converted grant funds to his own use in violation of Title 18, United States Code, Sections 641 and 666; and (3) committed wire fraud, in that he used interstate communications to execute a scheme to defraud the United States, in violation of Title 18, United States Code, Section 1343. The indictment also charges that Defendant Vaxima, Inc, a corporation owned solely by Dong, assisted in the execution of the scheme.

The second indictment charges Dong (54) and his estranged wife, Danher Wang (52) with violations of federal campaign laws. The seven-count indictment charges that Dong and Wang conspired to make illegal campaign contributions in the names of other persons using money from a foreign national, in violation of Title 18, United States Code, Section 371. The indictment further alleges in other counts that Dong and Wang made or caused others to make illegal contributions after they (Dong and Wang) exceeded their maximum contribution allowance, in violation of Title 2, United States Code, Sections 437(g)(1)(D)(I) and 441f. According to the indictment, contributions were made in a way to conceal their true origin from the FEC, campaigns and the public. Finally, the indictment alleges that Dong made false statements to law enforcement agents (in violation of Title 18, United States Code, Section 1001) and that Dong attempted to illegally influence the testimony of a witness in violation of Title 18, United States Code, Section 1512.

As to the grant fraud indictment, the maximum sentences Dong faces for wire fraud regarding the misuse of federal grant funds is 30 years’ imprisonment as to each count, with a maximum fine of $250,000 per count. Dong faces sentences of up to 10 years for the other charges contained in this indictment. Both Dong and Wang face maximum sentences of five years’ imprisonment and a $250,000 fine for each count of campaign finance fraud, and Dong faces an additional maximum sentence of 20 years as to the witness tampering charges in the first indictment.

These companion cases were investigated by agents of the Department of Defense Criminal Investigative Service, U.S. Department of Health and Human Services Office of Inspector General, the Federal Bureau of Investigation, United States Army Criminal Investigation Command, and the Naval Criminal Investigative Service. The cases will be prosecuted by Assistant United States Attorneys Mark C. Moore and Debbie Barbier of the Columbia office.

The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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Danny Harris Jr. and Raymond Thomas Jr. Indicted by a Federal Grand Jury in San Francisco Federal Court

July 22, 2011

The U.S. Attorney’s Office Northern District of California on July 21, 2011 released the following:

“FORMER RICHMOND POLICE OFFICERS CHARGED WITH CONSPIRACY TO TAMPER WITH WITNESSES

One Officer Also Charged With Making False Statements In Order To Purchase Firearms For Other Individuals, Including Two Minors

SAN FRANCISCO – A federal grand jury in San Francisco indicted Danny Harris Jr. of Pinole, Calif., on July 21, 2011, with making false statements in order to purchase three semiautomatic pistols from a San Jose, Calif., firearms dealer. Both Harris and Raymond Thomas Jr. of Fairfield, Calif., were charged with conspiring to tamper with witnesses and obstruct a federal investigation and court proceedings, United States Attorney Melinda Haag announced.

According to the indictment, both defendants were police officers with the Richmond Police Department when the offenses took place. Harris is alleged to have made false statements to a federal firearms dealer in San Jose in connection with the purchase of three semiautomatic handguns. According to the indictment, Harris falsely stated that he was the true buyer of the guns, when he knew that the true buyers were other individuals. In the case of two of the weapons, the true purchasers were individuals under twenty-one years of age. Under federal law, it would have been illegal for the dealer to knowingly sell the handguns to someone under twenty-one.

The indictment also charges that after Harris made the false statements in connection with the gun purchases, he and defendant Thomas conspired to knowingly use intimidation, threats and corrupt persuasion in order to prevent or hinder witnesses from reporting information to federal law enforcement officers. The defendants are charged with conspiring to obstruct, influence and impede a federal grand jury investigation and proceedings in federal court.

The indictment describes a series of acts undertaken by Harris and Thomas to intimidate the two minors for whom Harris purchased the firearms in order to prevent them from reporting possible federal crimes to federal law enforcement and to influence and obstruct a federal investigation. The acts included pressuring one of the minors to change the registration of one of the guns so that it no longer showed up in Harris’ name; using intimidation tactics, including threats of legal action and the filing of a civil suit, in order to get possession of one of the guns from the minor; and hiring a private investigator in Concord, Calif., to conduct a sting operation targeting the two minors for whom Harris purchased firearms. The alleged goal of the sting operation was to have the minors arrested for drunk driving and illegal possession of the guns. The indictment alleges that Thomas paid more than $1,800 to the private investigator in order to conduct the sting operation. The indictment alleges that Harris and Thomas approved of the plan whereby a female employee of the private investigator would meet one of the minors and make overtures in order to engage in future social engagements. The plan was for the woman to encourage the minor to bring his gun to one of those meetings. According to the indictment, the woman did meet the minor and they exchanged cell phone numbers. Through text messages, they set up a social engagement and the woman asked the minor to bring his gun to the engagement.

The defendants are scheduled to make their initial appearances in federal court in Oakland on Aug. 9, 2011, at 9:30 a.m. before United States Magistrate Judge Laurel Beeler.

The maximum statutory penalty for each count of making a false statement in the acquisition of a firearm, in violation of 18 U.S.C. §922(a)(6), as alleged in counts one through three of the indictment, is 10 years imprisonment, a $250,000 fine, three years supervised release, and a $100 special assessment. The maximum statutory penalty for making a false statement in the record of a licensed firearms dealer, in violation of 18 U.S.C. §924(a)(1)(A), as alleged in count four of the indictment, is five years imprisonment, a $250,000 fine, three years supervised release, and a $100 special assessment. The maximum statutory penalty for conspiracy to prevent communication to a law enforcement officer, in violation of 18 U.S.C. §1512(k), as alleged in count five, and for conspiracy to impede an official proceeding, also in violation of 18 U.S.C. §1512(k), as alleged in count six, is 20 years imprisonment, a $250,000 fine, three years supervised release, and a $100 special assessment. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. §3553.

Susan Badger is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rania Ghawi and Cristhian Escobar. The prosecution is the result of an eleven-month investigation by the Federal Bureau of Investigation, Richmond Police Department, and the Contra Costa County District Attorney’s Office.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Mr. Harris and Mr. Thomas must be presumed innocent unless and until proven guilty.

Further Information:

Case #: CR 11-0497 CW”

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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