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Wednesday, October 2, 2013

Silk Road Shut Down: Drug Marketplace Founder Arrested at SF Public Library

Posted By on Wed, Oct 2, 2013 at 12:17 PM

click to enlarge Twitter/OliverSmithEU - SO MUCH FOR ALL THAT
  • So much for all that
  • Twitter/OliverSmithEU
$1.2 billion in sales and hundreds of kilograms of drugs later, Silk Road is closed.

The alleged founder and operator of Silk Road -- the Deep Web marketplace where illegal drugs were bought and sold using Bitcoin -- was arrested on Tuesday at a public library in Glen Park, according to Reuters.

Ross Ulbricht, 29, ran Silk Road from a series of locations in New York and in San Francisco -- including a coffee shop in Hayes Valley and, evidently, the library -- under the handle "Dread Pirate Roberts" from January 2011 until Tuesday, when FBI agents nabbed him at the Glen Park library, according to the Chronicle.

In addition to drugs, $3.6 million worth of Bitcoin was also seized, according to authorities. How'd they get him, you ask? It all began with him using a Gmail account with his real name.

click to enlarge Ross Ulbricht, drug kingpin - GOOGLE+/QUARTZ
  • Google+/Quartz
  • Ross Ulbricht, drug kingpin

As Quartz reported and as detailed in the criminal complaint, it appears Ulbricht made a few key missteps: he promoted Silk Road on other drug users' Web sites -- and provided a Gmail email address, rossulbricht@gmail.com. His LinkedIn and Google+ accounts all shared an affinity for an Austrian economist -- an affinity which Dread Pirate Roberts shared online under that handle.

Investigators kept tabs on the Gmail account, which was accessed from the same Comcast IP address as logins to Silk Road admin functions, according to the complaint. Investigators also intercepted a shipment of fake IDs ordered by Dread Pirate Roberts -- which were shipped to an address on 15th Street, where Ulbricht subletted a room for $1,000 a month under the fake name "Josh."

That was in July. When confronted by the FBI, Ulbricht denied knowing anything about the IDs or Silk Road (but did say that "hypothetically" "anyone" could use TOR to get onto Silk Road) according to the complaint, but by that time the FBI apparently knew who he was and where he lived. It's unclear why the search warrant was not signed by a judge in New York until Sept. 27, or where Ulbricht was living when he was arrested, but Silk Road was up and running until this week.

Ulbricht alone maintained the site, according to the criminal complaint, from which he gleaned $80 million in commissions in Bitcoin. Hundreds of kilograms of drugs were shuffled about the globe, including LSD, cocaine, methamphetamine, and marijuana.

At its peak, the Web site had 950,000 users and conducted 1.2 million transactions.

Ulbricht Criminal Complaint

A few weeks ago we wrote that despite their best efforts, law enforcement had yet to close the net on Silk Road despite years of trying. However, law enforcement sources also said they were getting close -- and now it appears they were very close indeed.

Investigators tracked Ulbricht's movements to Hayes Valley in June, where he lived with a friend on Hickory Street, and apparently logged into the Internet from a cafe on Laguna Street.

Silk Road was simple: using the The Onion Router, or TOR, users could anonymously access the Deep Web, where Silk Road was located. Transactions could then be made on a sort of illicit eBay or Amazon from user to user using Bitcoin as currency. Almost anything could be bought and sold -- including illegal items like fake IDs, drugs, guns, and even -- supposedly -- murderers for hire.

Ulbricht apparently took advantage of the hitman services, according to reports, hiring a supposed killer to take out a user of the site who was threatening to reveal its "sacrosanct" secrets. He may have been had: the FBI is not currently investigating any deaths, according to reports.

As of Wednesday, the Silk Road Web site is shut down, London's CityAM reported. On its homepage is an image proclaiming "THIS HIDDEN SITE HAS BEEN SEIZED," with seals and badges from five law enforcement agencies stamped as an imprimatur.

Ulbricht, who holds a master's degree from Penn State, was taken into custody at about 3:15 p.m. Tuesday at the Glen Park Library on Diamond Street. He had a laptop on him at the time.

FBI Agent Christopher Tarbell called Silk Road "the most sophisticated and extensive criminal marketplace on the Internet today."

Well, yesterday, anyway.

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About The Author

Chris Roberts

Bio:
Chris Roberts has spent most of his adult life working in San Francisco news media, which is to say he's still a teenager in Middle American years. He has covered marijuana, drug policy, and politics for SF Weekly since 2009.

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