“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.


Sixteen Individuals in Colletion and Dorchester Counties Federally Indicted as Part of an Alleged Federal Drug Conspiracy

March 27, 2012

The Federal Bureau of Investigation (FBI) on March 27, 2012 released the following:

“COLUMBIA, SC— United States Attorney Bill Nettles stated that Ivory Brothers, Kyedrick Edwards, Jonathan Edwards, Joey Maurice Charles, Tiffany Elliot, Paul Steve Braxton, Edward Bryant, Bryant Davis, Rocky Creel, Elijah Deal, Gerwron Lingard, Jerry Rivers, Charles Youmans, Martin Louis Ballard, Norman Robinson, and Yvette Renee Calvin, of Colleton and Dorchester Counties in South Carolina, were charged in a five-count indictment with conspiring to possess with intent to distribute and distribute five kilograms or more of cocaine and 280 grams or more of cocaine base (commonly known as “crack”), a violation of Title 21, United States Code, Section 846, as well as possessing with intent to distribute and distributing crack cocaine, violations of Title 21, United States Code, Section 841. If convicted, these defendants face a mandatory minimum term of imprisonment of 10 years, a maximum term of imprisonment of life, and a $4 million fine.

The case was the result of a year-long investigation involving agents of the Organized Crime and Drug Enforcement Task Force, which consists of members from the Drug Enforcement Administration, the Federal Bureau of Investigations, the Berkeley County Sheriff’s Office, Charleston County Sheriff’s Office, Charleston Police Department, the Dorchester County Sheriff’s Office, the North Charleston Police Department, the South Carolina Highway Patrol, and the Summerville Police Department. Also involved in the investigation were members of the Walterboro Department of Public Safety. This case is assigned to Assistant United States Attorney Peter Phillips of the Charleston office for prosecution.

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

21 U.S.C. § 841

21 U.S.C. § 846

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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

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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 C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Drug Trafficking Conspiracy Indictment Expanded

January 27, 2012

The Federal Bureau of Investigation (FBI) on January 26, 2012 released the following:

“ANCHORAGE— United States Attorney Karen L. Loeffler announced today, January 26, 2012, that on January 20, 2012, an Anchorage grand jury expanded a previously charged drug trafficking conspiracy involving Kostas Nikolaos Bairamis, Melissa Dawn Cue, BJ Griffith, William Gilbert, and Justin Clayton Ray Lane to charge three additional defendants: Homer resident Timothy Daniel Cissney, age 33; Christopher Sean Kendrick, age 36, from California; and Aaron O’Kito Dyson, aka “Punchy,” age 37, from Washington. The indictment alleges one count of conspiracy to distribute controlled substances, in violation of 21 U.S.C. §§ 846, 841(a)(1), (b)(1)(C).

According to the indictment presented to the court, defendants conspired to distribute oxycodone and methadone between at least June 17, 2010, and October 5, 2010. Bairamis has been convicted of conspiring to distribute methamphetamine during a different time period and has been sentenced to served 11 years on that separate charge. Both Cue and Griffith have been previously indicted by a grand jury in the District of Nevada. Those charges remain pending.

Assistant United States Attorney Kimberly Sayers-Fay, who presented the case to the grand jury, advised that the maximum penalties for conspiring to distribute oxycodone and methadone are 20 years’ imprisonment, a $1,000,000 fine, three years’ supervised release, and a $100 special assessment.

The Federal Bureau of Investigation and Alaska State Troopers conducted the investigation the led to the indictments in this case.

An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilty beyond a reasonable doubt.”

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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

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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.


Thirty-Six Defendants with Alleged Ties to Hells Angels Motorcycle Club Charged in Federal Drug Conspiracy Investigation

September 30, 2011

The Federal Bureau of Investigation (FBI) on September 29, 2011 released the following:

“Keith Slotter, Special Agent in Charge of the San Diego FBI office, announces the arrest of 26 people with ties to the Hells Angels Motorcycle Club. Six defendants were already in custody and four are considered fugitives at this time.

On Thursday, September 29, 2011, over 250 law enforcement officers, deputies, and agents from San Diego County participated in arrests and searches of individuals and locations with ties to the Hells Angels Motorcycle Club.

Twenty-six people were arrested today on federal drug charges, and 19 locations searched. The searches resulted in the seizure of thousands of dollars in U.S. currency, 10 firearms, and quantities of drugs.

The charges in this matter stem from a two-year investigation conducted by the FBI’s Violent Crime Gang Task Force. The investigation focused on the methamphetamine trafficking and violent crimes committed by the Hells Angels Motorcycle Club (San Diego Charter) and their criminal partners. As set forth in the complaint, the defendants are members and associates of the Hells Angels Motorcycle Club. During this investigation agents and detectives prevented a kidnapping.

The complaint charges the following defendants with Title 21, United States Code, Section 841(a)(1), 846-Conspiracy to Distribute Methamphetamine.

  • Michael Edward Ottinger Jr. (1)
  • David Raymond Garcia (2)
  • Ernesto Verdugo Jr. (3)
  • Jonathan Alfredo Garcia-Jara (4)
  • Robert Cota Jr. (5)
  • Martin Francisco Moreno (6)
  • Jaime Mota-Marquillo (7)
  • Hugo Gomez Flores (8)
  • Rory Cruz Flanigan (9)
  • Jason Alex Scanlon (10)
  • Stephan Paul Vukelich (11)
  • Eduardo Andres Sarquiz (12)
  • Juan Antonio Mendez (13)
  • Philip John Castagnola (14)
  • Billy Manuel Castellano (15)
  • Daniel Joseph Seiler (16)
  • Grant Eugent Bisel Jr. (17)
  • Cynthia Marie Stephan (18)
  • Matthew Joseph Mooney (19)
  • Cheryl Marie Frega (20)
  • Darrel Lee Cooper (21)
  • Robert Blaine Hodges (22)
  • Mercedes Nina Cohen (23)
  • Bruce Kevin Lambert (24)
  • Jason Michael Bradford (25)
  • Douglas Edward Witcher (26)
  • Phalen Farber (27)
  • Tina Marie Bray (28)
  • Derek Ralph Low (29)
  • Mary Elizabeth Saber (30)
  • Martin Thomas Forschner (31)
  • Quinton Lynn Koonce II (32)
  • Anthony James Medvec (33)
  • Andre Guy Almarez (34)

Charged in a separate complaint were Patrick James Haggerty and Leo David Garcia, Jr. Both were charged with Title 21, United States Code, Section 841(a) (1), 846-Conspiracy to Distribute Methamphetamine.

Members of the FBI Violent Crime Gang Task Force are as follows: San Diego Police Department, San Diego Sheriff’s Department, Bureau of Prisons, National City Police Department, Chula Vista Police Department, Internal Revenue Service, U.S. Attorney’s Office, San Diego District Attorney’s Office, and San Diego County Probation Department.

Those arrested in today’s operation have been booked into the Metropolitan Correctional Center and will have their initial appearance before a U.S. Magistrate Judge on Friday, September 30, 2011. This case is being prosecuted by the U.S. Attorney’s Office.

An arrest itself is not evidence that the defendants committed crimes charged. The defendants are presumed innocent until the government meets its burden in court of proving guilt beyond a reasonable doubt.”

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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