Rare News Desk
Over the last two years, the federal government has slowly built their case against the founders and dealers of the online marketplace Silk Road. The anonymous site quickly developed a reputation as the go-to site for illegal drug and arms purchases, all paid for with Bitcoin — the anonymous electronic currency.
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Though Silk Road was recently shutdown by the federal government, the story of its fall seems more like the plot of Hollywood thriller than reality.
In 2011, the Department of Homeland Security received a tip concerning a massive online drug marketplace, where narcotics could be bought and sold in an almost undetectable manner. The tip was for Silk Road, where one could purchase a gram of methamphetamine online as easily as they could buy season two of the “West Wing” on Amazon.com.
An intrepid Internet thief could buy some marijuana and maybe a stolen credit-card number for good measure.
From Bitcoin.org:
Bitcoin is a consensus network that enables a new payment system and a completely digital money. It is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. From a user perspective, Bitcoin is pretty much like cash for the Internet. Bitcoin can also be seen as the most prominent triple entry bookkeeping system in existence.
Early on in the saga of Bitcoin and Silk Road, Gawker.com wrote about the highly illegal website that the government was somehow not stopping.
From Gawker:
Once you’re there, it’s hard to believe that Silk Road isn’t simply a scam. Such brazenness is usually displayed only by those fake “online pharmacies” that dupe the dumb and flaccid. There’s no sly, Craigslist-style code names here. But while scammers do use the site, most of the listings are legit.
Following the Gawker article, other agencies around the country began looking into Silk Road with the Department of Homeland Security’s Maryland outpost leading the charge.
Wired explains:
They focused on identifying and nabbing two groups connected to Silk Road: the top 1 percent of sellers and the moderators and system administrators, whose computers and credentials, once seized, could open the door to the site’s private communications and account details.
“Moderators and admins were our main objects,” one law enforcement official says. “We identified some of them. That led to some information to help us understand the inner circle of Silk Road. We also took down drug traffickers and those selling IDs and guns. From there we gained a lot of intelligence about the people involved.”
Shortly after the investigation began, authorities zeroed in on two users who seemed to be profiting the most from Silk Road: Ross Ulbricht and Jacob George IV.
George was a top dealer, sending free samples to would-be purchasers. He was known for his high quantities and quality of drugs, operating out of his home in suburban Maryland. After several run-ins with police, George was arrested in January 2013.
George’s arrest would set in motion a coordinated effort between law-enforcement agencies around the country to track down top users and ultimately lead to the sites founder.
Ross Ulbricht, otherwise a mild-mannered investment advisor and Penn State grad, was harder to find.
Officials made a number of initial arrests that were kept quiet from the media or handled in ways to prevent co-conspirators from learning of the arrests. They won’t say how they did this, but it’s known that in some of the cases they refrained from filing charges against some suspects until after Ulbricht was arrested in October 2013. Other known law-enforcement tactics include sealing documents, eliminating key information from public documents that point to the investigation — for example, the name Silk Road — or filing state charges instead of federal ones to keep a suspect’s records out of the more-easily searched federal-court database.
Over the next year, authorities would continue building their case against Ulbricht. Through the testimony of noted Bitcoin sellers, they were able to track down Ulbricht’s source email and shipments he had made for fake IDs. Along the way, they learned that not only had Ulbricht run the illegal site, he may have also put on multiple contract hits on uncooperative users.
They finally arrested Ulbricht in October in San Francisco, charging him out of New York with conspiracy-drug and money-laundering charges. Ulbricht also faces a grand-jury indictment in Maryland for conspiracy to commit murder, the most serious charge against him. Following Ulbricht’s arrest, four other suspects were arrested in the U.K. — one in his 50s and the others in their 20s. Two others were arrested in Helsingborg, Sweden, on suspicion of selling pot.
Ulbricht now remains locked in a Brooklyn jail awaiting trial.
Related articles
- Justice Department still searching for Silk Road Bitcoins (rare.go-vip.net)
- Bitcoin Comes to Washington: Monday’s Hearing Is Just The Beginning (swampland.time.com)
- Silk Road Vendor Sent Ricin To President Obama (bitcoinblogger.com)
