News Column

Feds Bust Alleged Silk Road Head

October 3, 2013

Tom Hays, The Associated Press

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 Wednesday.

A criminal complaint in New York accused Ross William Ulbricht of being the mastermind and charged him with narcotics trafficking, computer hacking and money laundering. A separate indictment in Maryland accused him in a failed murder-for-hire scheme.

The website, Silk Road, allowed users to anonymously browse nearly 13,000 listings under categories such as "Cannabis," "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, whose other categories included "Erotica" and "Fireworks," protected users with an encryption technique called onion routing, 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 Ulbricht on Tuesday afternoon in a San Francisco library. Ulbricht was online on his laptop chatting with a cooperating witness about Silk Road when FBI agents from New York and San Francisco took him into custody, authorities said.

Ulbricht, 29, made an initial appearance in a San Francisco court on Wednesday, authorities said. A bail hearing was set for Friday.

A criminal complaint said Ulbricht "has controlled and overseen all aspects of Silk Road."

He announced in a website forum last year 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.

Along with drugs, the website offered various illegal services including social network and ATM hacking. 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, the court papers said. The site generated an estimated $1.2 billion since it started in 2011 and collected $80 million by charging 8 percent to 15 percent commission on each sale, it said.

Undercover agents in New York made more than 100 purchases of LSD, Ecstasy, heroin and other drugs on the site, the papers said.

In July, customs agents as part of a routine search intercepted a package from Canada that contained counterfeit identifications, all with Ulbricht's photo, the papers said. When confronted by agents at a San Francisco address, 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."

A criminal complaint in New York accuses Ross William Ulbricht of being the mastermind and charges him with narcotics trafficking, computer hacking and money-laundering. A separate indictment in Maryland links him to a failed murder-for-hire scheme.

(c) 2013 ProQuest Information and Learning Company; All Rights Reserved.

Original headline: Feds bust alleged mastermind of Silk Road online black market


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Source: (c) 2013 ProQuest Information and Learning Company; All Rights Reserved.


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