“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


Douglas McNabb – McNabb Associates, P.C.’s
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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.

Christian Pereira, Daniel Perez, and Sophie Perlmutter Charged by a Criminal Complaint with Conspiring to Affect Interstate Commerce by Robbery (18 U.S.C. § 1951(a)), Use of Interstate Commerce Facilities in the Commission of Murder-for-hire (18 U.S.C. § 1958), and Possession of a Firearm in Furtherance of Crimes of Violence (18 U.S.C. § 924(c)(1)(A))

July 25, 2011

The U.S. Attorney’s Office Southern District of Florida on July 22, 2011 released the following:


Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, Hugo J. Barrera, Special Agent in Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives, James K. Loftus, Director, Miami-Dade Police Department, and Addy Villanueva, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), Miami Operations Center, announced the arrest of defendants Christian Pereira, 22, Daniel Perez, 20, and Sophie Perlmutter, 21, all of Miami-Dade. The defendants are charged in a criminal complaint with conspiring to rob and murder a Miami-based drug dealer. Specifically, the defendants are charged with one count of conspiring to affect interstate commerce by robbery (18 U.S.C. § 1951(a)), one count of use of interstate commerce facilities in the commission of murder-for-hire (18 U.S.C. § 1958), and one count of possession of a firearm in furtherance of crimes of violence (18 U.S.C. § 924(c)(1)(A)).

The defendants made their initial appearance in federal court today. A pretrial detention hearing is scheduled for Wednesday, July 27, 2011 at 10:00 A.M. If convicted, the defendants face a maximum statutory sentence of up to 20 years in prison on the interstate robbery count, up to 10 years in prison on the murder for hire count, and up to life in prison for the firearm count, which carries a five year mandatory minimum.

Today’s charges are the result of the ATF’s Street Terror Offender Program (STOP). STOP is a multi-agency task force specializing in the investigation of violent crime associated with the narcotics trade in South Florida. Using federal narcotics, robbery and firearms laws, STOP members target violent career offenders, with the goal of reducing violent crime in Miami-Dade.

According to the affidavit filed in support of the criminal complaint, a confidential source (CS) alerted ATF/MDPD that he had been asked to assist in the robbery and murder of a marijuana dealer to whom defendant Pereira owed money. During a recorded meeting with the CS, Pereira and Perez discussed the robbery and murder plan in detail. The plan called for Pereira and Perez to meet the targeted victim at the victim’s residence under the pretext of paying their debt, confront the victim with a firearm, and then have the CS strangle the victim with a rope. Pereira and Perez promised the CS money in return for his strangling the intended victim.

According to the affidavit, on the morning of July 21, 2011, the day of the planned robbery and murder, police surveillance units watched as Pereira and his girlfriend Perlmutter picked up the CS and traveled to meet Perez, who was waiting at a Publix near the intended victim’s residence. Before Perez and Perlmutter reached their destination, they were pulled over by police. Police officers discovered a semi-automatic firearm, gloves, plastic tarp and cleaning agents inside the car. Agents then found Perez at the Publix where he was waiting, but Perez attempted to flee on foot. During the chase, Perez tried to discard his cellular telephone. Perez was arrested and his phone was recovered. When Perez’s car was searched, investigators discovered a backpack containing a piece of rope in the front passenger seat.

U.S. Attorney Wifredo A. Ferrer noted, “Drug trafficking does not exist in a vacuum. Rather, drug trafficking breeds other crimes, including, as in this case, robbery, illegal gun use, and even conspiracy to murder. These defendants planned to rob and murder a drug dealer for their own profit. Instead, they now face long prison sentences. It is a good day for law enforcement when violent offenders and their guns are removed from our community before they have a chance to do harm.”

“The removal of violent criminals and their guns from the streets of South Florida is a top priority for ATF. Today’s charges are the result of our commitment to work jointly with state and local law enforcement to do everything possible to ensure that our citizens and visitors are kept safe from harm,” said Hugo J. Barrera, Special Agent in Charge of ATF’s Miami Office. “The message is clear: if you seek to do harm through violence in South Florida, you will be found and you will be prosecuted to the fullest extent of the law.”

Director James K. Loftus of the Miami-Dade Police Department added, “The apprehension of these violent offenders is attributed to the strong working relationship amongst law enforcement agencies and their unified commitment to public safety.”

FDLE Special Agent in Charge Addy Villanueva stated, “The STOP Unit seeks out the “worst of the worst” offenders. This multi-agency Task Force saved a life and the perpetrators was brought to justice.”

Mr. Ferrer commended the investigative efforts of ATF, Miami-Dade Police Department and FDLE. This case is being prosecuted by Assistant U.S. Attorney Anthony LaCosta.

An Complaint is only an accusation, and defendant are presumed innocent until and unless proven guilty beyond a reasonable doubt.”

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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