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Special Case File
The Underground DarkNet Emporium
"We are going to reach out and touch you."
In October 2013, the FBI announced the closure of the infamous online black market known as the ‘Silk Road’, as well as the arrest of the founder and owner who went by the pseudonym ‘Dread Pirate Roberts’. The dark web marketplace had operated since February 2011, and was known as a platform for the sale of illegal drugs and other contraband, which online users could browse and purchase anonymously.
Amongst those who sold their illegal wares on the website was a Dutchman known as the Pablo Escobar of Silk Road, who ran a lucrative virtual drug cartel, two corrupt federal agents responsible for extortion and other crimes, a boyfriend and girlfriend drug selling partnership who were known as Silk Road’s Bonnie and Clyde, and a gynaecologist who allegedly moonlighted as an underground drug dealer.
With several of the Silk Road administrators and its biggest sellers arrested, it wasn’t long before another version, Silk Road 2.0, appeared on the internet in November 2013. Unlike its predecessor, this new iteration was involved in many other illegal acts, including the distribution of child pornography. In response, the FBI launched Operation Onymous, in order to apprehend those who had resurrected the most notorious online marketplace.
The Silk Road of the Dark Web
In July 2013, a package from Canada was intercepted at the border as part of a routine mail search, and found to contain nine fake IDs, each with a different name but all bearing a photograph of the same person. Homeland Security was notified and duly dispatched agents to the address the parcel was headed towards, San Francisco’s 15th Street. When they knocked on the door, they were met by a young man named Ross Ulbricht, the same man in the photographs.
He told officers that the people he lived with knew him simply as ‘Josh’, and one housemate described him as “always being in his room on the computer.” During this same time, the FBI had launched an investigation into an illegal online marketplace that had sprung up in February 2011. Agents working the case identified the founder of the Silk Road website by his username, ‘Dread Pirate Roberts’, and they were getting closer to learning his real identity because of a series of mis-steps by the owner of the online drug bazaar.
Launched in February 2011, the Silk Road was operated by a Tor hidden service as part of the dark web. It was named after the historical ‘Silk Road’ network of trade routes that began during the Han Dynasty of China in 206BC and operated throughout Europe, China, India and many other countries until AD220. The website was founded and owned by an anonymous individual who went by the username ‘Dread Pirate Roberts’.
This individual was named after the fictional character from the 1973 fantasy romance novel The Princess Bride, who was known for his libertarian ideals and for criticizing regulation. Two other anonymous individuals who were closely associated with the growth and success of the site went by the pseudonyms Variety Jones and Smedley. Development of the marketplace had begun some six months prior to the launch, and initially there were a limited number new seller accounts, with prospective sellers having to purchase an account in an online auction.
The original url of the website, silkroad60wnowfk.onion, had been designed using the Tor operating system, a free and open-source software that enabled anonymous communication which could conceal a user’s location and usage from anyone conducting network surveillance or traffic analysis. The primary purpose of the Tor Project was to protect the personal privacy of its users, as well as their freedom and ability to conduct confidential communication by keeping their Internet activities unmonitored.
This could be achieved through the use of onion routing, which is implemented by encryption in the application layer of a communication protocol stack, that is nested like layers of an onion. Using this method, the Silk Road became the first modern darknet market, hidden on the dark web, through which private computer networks allow people to communicate and conduct business anonymously without having to divulge any identifying information.
Silk Road administrators eventually changed the way new seller accounts were set-up, discarding the old system of auctioning accounts and instead establishing a fixed fee that was charged for each new seller account. The website grouped every item listed for sale under specific categories, such as books, digital goods, forgeries, forged money and Drugs, which were the most popular and widely purchased items sold.
Drugs were also categorized under different headings, such as Psychedelics, Stimulants, Dissociatives, Opiods and Other. Despite the illegal nature of the items for sale, the creator and administrators instituted a terms of service that prohibited the sale of anything whose purpose was intended to “harm and defraud”. This included child pornography, stolen credit cards, hitmen for sale and weapons of any type. In 2012, a sister site called ‘The Armoury’ was launched, but later shut down due to a lack of demand.
By March 2013, the Silk Road marketplace had over 10,000 products for sale by anonymous vendors, 70% of which were drugs. Buyers were able to leave reviews of sellers products, while an associated forum existed where crowdsourcing provided information on the best sellers and those considered the worst scammers. Based on data later provided, investigators estimated that between February 3, 2012 and July 24, 2012, an estimated $15 million in transactions were made annually on Silk Road.
Buyers and sellers could conduct all sales through the use of Bitcoin, the cryptocurrency that offered a certain degree of anonymity. Silk Road held all buyers’ Bitcoin in escrow until the order had been received and a hedging mechanism that allowed sellers to opt for the value of Bitcoins held in escrow to be fixed to their value in US$ at the time of the sale in order to mitigate against the volatility of the value of Bitcoin. Any changes in the price of Bitcoin during transit of the items were covered by ‘Dread Pirate Roberts’.
During the FBI investigation and subsequent trial of Silk Road administrators, it was determined that between February 6, 2011 to July 23, 2013, the market had conducted and completed approximately 1,229,465 transactions on the site, with the total revenue generated from these sales estimated at around 9,519,664 Bitcoins, equivalent to roughly $183 million. This involved 146,946 customers and 3,877 vendors.
The total commission collected by Silk Road and ‘Dread Pirate Roberts’ was believed to amount to 614,305 Bitcoins, roughly $11.8 million. According to information provided by users when signing up to the illegal service, around 30% originated from the United States, a further 27% chose not to declare their country of origin, and the remaining users were from every corner of the globe including, the United Kingdom, Australia, Germany, Canada, Sweden, France, Russia, Italy and the Netherlands.
On March 13, 2012, the website opened the Vendor Roundtable, a part of the forum that was only accessible to Silk Road sellers. Over the two years it was in operation, Silk Road became the eBay of online drug dealing, with hundreds, perhaps thousands, of vendors. The dealers sold MDMA, mephedrone, nitrous oxide, ketamine, weed, cocaine and much more, and people from all over the world were able to buy any type of drugs. But everything that flowed through Silk Road, did so under the watchful eye of the creator, founder and owner who attempted to remain both anonymous and one step-ahead of the FBI.
The Hunt for Dread Pirate Roberts
In order to identify the user known as ‘Dread Pirate Roberts’, FBI investigators undertook a painstaking process by piecing together the suspect’s digital footprint, sifting through years of his online history and communication with other users. The search was started by ‘Agent-1’, the codename given to the computer expert cited in court documents, who undertook an “extensive search of the Internet” and sifted through thousands of pages of information that dated back to January 2011.
The trail began with a post made on a web forum where users discussed the use of magic mushrooms. With a post entitled “Anonymous market online?”, a poster going by the username ‘Altoid’ started to publicize the site. “I came across this website called Silk Road,” Altoid wrote. “Let me known what you think.” The post accompanied a link to a site hosted by the popular blogging platform WordPress. In turn this contained another link to the Silk Road’s location on the so-called “dark web”.
Records obtained by Agent-1 through WordPress revealed, unsurprisingly, that the blog had been set up by an anonymous user who had hidden their location. It wasn’t long before Altoid appeared on another discussion site, this time on bitcointalk.org where he talked about virtual currency. It appeared Altoid was using a “common online marketing” tactic, and was attempting to make Silk Road go viral through word of mouth.
Months later, in October 2012, Altoid appeared again, but this time he made a slip-up, granting investigators their first major lead. With a post seeking to find an IT expert with knowledge of Bitcoin, he asked people to contact him via email@example.com. With an email address at hand, Agent-1 linked it to accounts on the Google+ social network and YouTube video site, where he discovered some of Mr. Ulbricht’s interests.
He found after scrolling through his viewing history that economics was one such topic, in particular, Mr. Ulbricht’s account had ‘favourited’ several clips from the Ludwig von Mises Institute, a renowned Austrian school of economics. By the following year, on the Silk Road discussion forums, ‘Dread Pirate Roberts’ would make several references to the Mises Institute and the work undertaken there.
Through records “obtained from Google”, Agent-1 was able to locate details of IP addresses, and therefore the locations, used to log into Mr. Ulbricht’s account which focused the search to San Francisco, specifically to an Internet Café on Laguna Street. Furthermore, detailed analysis of Silk Road’s source code highlighted a function that enabled the restriction of who was allowed access to login and control the website, locking it down to just one IP address.
However, investigators found that as would be expected, ‘Dread Pirate Roberts’ was using a VPN, a virtual private network, that generated a “false” IP address which was designed to cover his tracks. In an effort to circumvent this, the FBI subpoenaed the provider of the VPN. Although ‘Dread Pirate Roberts’ had taken steps to delete data, the VPN server’s records showed a user had logged in to the account from an Internet café just 500 yards from an address on Hickory Street, known to be the home address of a close friend of Ross Ulbricht’s, and was also the location that had been used log in to the Gmail account.
With this information, FBI investigators concluded that the clues uncovered by Agent-1 were enough to suggest that Mr. Ulbricht and ‘Dread Pirate Roberts’ were, if not the same person, at the very least residing in the same location at the exact same time. In March 2012, it was discovered that further activity had taken place on the coding Q&A site Stack Overflow, where a user by the name of ‘Frosty’ had asked questions about complex coding that later became part of the source code of Silk Road.
The user had registered on the question-and-answer website for programmers with Ulbricht’s email address, and initially posted under the username ‘Ross Ulbricht’ to post the question “How can I connect to a Tor hidden service using curl in php?”. The username was quickly changed moments later to the username ‘Frosty’. Prosecutors would explain that this was done to conceal his association with the message he had posted just one minute previously.
Lead prosecutor Christopher Tarbell said “The computer code on the Silk Road web server includes a customised PHP script based on ‘curl’ that is functionally very similar to the computer code described in Ulbricht’s posting on Stack Overflow, and includes several lines of code that are identical to lines of code quoted in the posting.” He added, “The posting was accessible to anyone on the Internet and implicated him in operating a Tor hidden service.”
Despite his apparent success at building ‘the eBay of hard drugs’ through anonymous servers and a hidden identity, the man known as ‘Dread Pirate Roberts’ began to leave a trail of traceable activity on social media. Ulbricht boasted about running his international multimillion dollar drugs marketplace on his LinkedIn profile, by making veiled references to his present activities.
Tarbell said, “Ulbricht elaborates, obliquely, that he has since focused on ‘creating an economic simulation’ designed to ‘give people a first-hand experience of what it would be like to live in a world without the systemic use of force’ by ‘institutions and governments’… I believe that this ‘economic simulation’ referred to by Ulbricht is Silk Road”. In order to presumably to work out how to best ship things from his international multimillion dollar drugs marketplace, Ulbricht sought contacts in courier firms on Google+, where his real name, real photographs and real YouTube profile were visible.
“Anybody know someone that works for UPS, FedEX, or DHL?”, asked Ulbricht on Google+. Meanwhile on his YouTube profile, linked to from that page, Ulbricht saved a couple of videos for later, including one from the ultra-libertarian Mises Institute titled “How to Get Away with Stealing”. This would later be used as evidence against him. Tarbell explained that “DPR’s user ‘signature’ in the [Silk Road] forum includes a link to the ‘Mises Institute’ website… moreover… DPR has cited the ‘Austrian Economic theory’ and the works of Ludwig von Mises… as providing the philosophical underpinnings for Silk Road.”
Operation Dime Store and Marco Polo
When some letters containing drugs are seized at O’Hare Chicago airport by Homeland Security agent Jared Der-Yeghiayan in October 2011, an investigation is launched by Chicago authorities codenamed “Operation Dime Store”, with the objective of documenting the discovery and seizures of letters. The Department for Homeland Security soon began a larger investigation of the online drug market Silk Road after an offhand tip from an informant to agents in Maryland in mid-2011.
In conjunction with agents of a multi-agency Baltimore taskforce, Homeland Security agents conducted several interviews with the informant, who told DHS investigators about an online drugs bazaar where international sales of illicit drugs and other contraband were conducted anonymously and with impunity. “You guys are in law enforcement. You might want to look at this,” the informant told DHS agents.
The informant directed investigators to the website, accessible only through the Tor anonymizing network, and went on to explain how transactions for drugs worked using the digital currency Bitcoin. He further explained that Silk Road also sold stolen credit and debit cards, counterfeit currencies, fake ID’s, login credentials for hacked accounts and hacking software tools.
The informant had conducted several drugs sales on Silk Road, and then provided agents with access to his account which gave them information on different buyers. Agents then assumed the online identity of the informant and began conversing with other vendors using the informants account. The tip had been given roughly six months after Silk Road had launched, and coincided with the growing notoriety of the emporium.
This jump in website traffic followed an article by Gawker published in June 2011, which would spawn a multi-agency investigation and task force based out of Baltimore and codenamed “Marco Polo”, in reference to the drug market’s historical namesake. It would eventually include investigators from the FBI, DHS, DEA, the IRS, U.S. Postal Inspection, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Secret Service.
Other investigations were simultaneously launched in New York and Chicago. In the aftermath of the Gawker story, Democratic Senators Charles Schumer of New York and Joe Manchin of West Virginia sent a letter to the Attorney General Eric Holder, as well as the head of the DEA, urging them to crack down on Bitcoin exchangers and Silk Road. With this, the FBI and DEA launched their investigation.
Meanwhile DHS Customs, U.S. Postal inspectors and Border Protection agents were already seizing suspicious packages from an international mail centre which was later connected to Silk Road buyers and sellers. As investigators in New York focused on gathering evidence centred on the drug sales, law enforcement in Maryland began mapping the operation.
They concentrated on identifying two groups associated with Silk Road, the top 1% of sellers, and the moderators and system administrators, whose computers and log in details, once seized, would provide evidence of the site’s private communications and user account details. “Moderators and admins were our main objects,” one Maryland law enforcement official said.
“We identified some of them. That led to some information that help us understand the inner circle of Silk Road. We also took down drug traffickers and those selling ID’s and guns. From there we gained a lot of intelligence about the people involved.” In order to apprehend the mysterious and brazen ‘Dread Pirate Roberts’, investigators decided to make a number of initial arrests that were kept secret from the media and handled in ways that prevented co-conspirators from learning of the arrests.
Investigators refused to explain how this was achieved, but it is known that they sealed court documents, removed key information from public documents that would point towards an investigation, filled state charges instead of federal ones to keep a suspect’s records out of the more-easily accessible federal court database and held back from filling charges against some suspects until after the arrest of the Silk Road owner. Around six months after the investigation began, agents swooped on their first target.
The “digitalink” of Silk Road
Baltimore resident Jacob Theodore George IV had first appeared on the Silk Road forums in June 2011, shortly after the Gawker story and began trading under the username “digitalink”, quickly becoming one of the top sellers on the site, thanks in part, to his clever marketing gimmicks such as free drug samples and special offers of “buy to get one free”.
The 32-year-old’s alleged inventory included methylone, a synthetic drug known on the streets as bath salts, that he imported from China, as well as heroin and ‘scramble’, a mix of heroin and quinine, that he bought from local dealers. George was no stranger to drugs and it wasn’t the first time he had been accused on committing illegal activities. He had previously been arrested in 2005 for operating an eBay scam, for which he was sentenced to 27 months in prison.
On July 5, 2011, shortly after law enforcement in Baltimore began looking into the Silk Road drug emporium, digitalink revealed in a post in the forum that a U.S. Postal inspector had contacted him about a package addressed to him that contained a suspicious white powder, which was in fact methylone, that was spilling out. Because of this, the postal authorities refused to deliver it.
Other Silk Road users warned George he should ignore the agent and write the package off as a loss. But he refused to listen, and reasoned that methylone wasn’t strictly a banned substance if not used for human consumption, and felt confident he could get it back. It was the principle of the matter, he reasoned, arguing that seizing his package was illegal.
“It is not banned from where I’m from… so they have no right to discard our shit correct? Wouldn’t it be against the law?,” he wrote. “It’s not about losing a small amount of methylone, this is about standing up for my rights and making it clear in the future they will not hold any of my methylone shipments without a piece of me.” In another post on the forum, he described how he had smooth-talked the agent into the retrieving his package.
He said, “I apologized sincerely and talked about how bad the world is and sorry for this mishap, explained that’s the reason why I called to make sure they didn’t worry that it was toxic and told them it was Methylone, we are going to use it for our garden,” he wrote. “Almost to a point they were relieved to know what it was and was told they will be re-packaging it up and sending it shortly if that is what it was.”
“Well that’s that.” digitlink added, “As to my address being watching, no worrys gentlemen/women, I guess I’m lucky my gf lives about a five minute drive from me.” The following day he claimed victory, asserting that he was so “slick” and his methylone had arrived as promised. Some of his fellow Silk Road members were not so impressed. “Oh wow, the idiocy is unmatched!,” wrote a user by the name of itmux.
“It seems very possible that digitalink will be busted sometime soon… Judging by his behavior so far it wouldn’t surprise me at all if he rolls over and gives them full access to his accounts her. It also wouldn’t surprise me if he keeps the addresses of past customers around.” He was soon to encounter more problems, when in early 2012, some digitalink customers posted complaints that their orders never arrived.
Apparently fed up with the ingratitude of Silk Road buyers, ditigalink wrote on January 14, 2012 “I have been burned 4 times, robbed once and put up with Silk Road drama and all the trolls on the boards. We put our freedom on the line to bring you our products. You known, I have a family, children and I’m not a pixel.” On January 19, some six months after he joined the site, he announced that he was taking a break from the marketplace.
Just six days later, he was arrested in Maryland. Law enforcement officials admitted they were not yet investigating George at the time when he said postal inspectors contacted him concerning the suspicious package in July 2011, and refused to confirm if postal inspectors had actually made contact with him. With his arrest, investigators had removed him as a main drug seller on Silk Road, however the real value lay in their ability to amass more intelligence that allowed them to penetrate deeper into the illegal drug site and one step closer to ‘Dread Pirate Roberts’.
With full access to George’s Silk Road seller’s account, investigators now had their foot in the door, and wielded control of the many emails, shipping records and the financial details of his drug transactions, which would help in identifying other potential targets. Agents posed as drug buyers, and gathered even more evidence. In order to keep his arrest secret, investigators refrained from filling charges until a later date.
The First Dominos Falls
Meanwhile law enforcement in the U.S. and abroad continued to hunt Silk Road’s top sellers. In July 2012, Australian officials arrested 32-year-old Paul Leslie Howard, who had only been active on the site a few months, but had been trafficking in methamphetamine, cocaine, MDMA, LSD and marijuana when he was caught. “Hey guys, I’m just starting out here,” he posted after registering as a vendor. “I’m Aus based and only shipping to Aus as not to roach on anyone’s turf.”
“I’ll be basically doing Dutch speed and Peruvian Charlie to start and branch out into more as I get coin back in my pocket,” He explained. Packages were intercepted by Customs and Border agents in Australia that had been sent to Howard’s home from the Netherland’s and Germany, and when caught, they found A$2,300 in cash, a money counter, digital scales, marijuana and 35 stun guns disguised as mobile phones. They also found a digital trail of his activities in the form of nearly 20,000 messages on two real phones that were seized from him.
“I got 5 grand worth if you want,” read one text message. “… promote the LSD I got more in. I sold 200 cubes last week,” read another. “no cubs left atm but some other ‘things’ u might like!.” Howard’s attorney later told an Australian court that his client had joined the black market site after a business website he was running failed. In order to support his he family he made the “naïve, stupid and foolish” decision to import and deal illegal drugs.
Howard pleaded guilty in January 2013, to possessing a controlled weapon and importing and trafficking in controlled substances, and in February his was the first conviction in the Silk Road case. Before Howard’s arrest, in April 2012, an undercover agent on the taskforce in the US had been working towards building a relationship with ‘Dread Pirate Roberts’ (DRP), the owner of Silk Road.
Anonymity had been something Ulbricht had taken great steps to ensure, and so his numerous mistakes gave investigators the clues that helped connected together the pieces of the Silk Road puzzle, leading directly to Ross Ulbricht. But possibly the most damning charge against him was the alleged plot to murder a former employee of his international multi-million dollar drugs marketplace, by a man who turned out to be an undercover cop.
The arrest of a Silk Road Admin
In December that year, the agent had told DRP that he was looking to sell large quantities of cocaine, and DRP referred him to a Silk Road administrator who was tasked with helping the ‘seller’ locate a vendor who could handle the scale. The vendor eventually did purchase a kilo of cocaine from the undercover agent, but the delivery address he gave the agent led to the home of Curtis Clark Green, who authorities believe was the Silk Road administrator who had been tasked with finding a vendor for the deal.
Green, a 47-year-old grandfather in Utah, had joined the site in 2011 and went by the usernames “Flush” and “chronicpain”. Green acknowledged to authorities that he received a salary beginning in November 2012, to take on customer service duties for Silk Road. He was only in the role for two months when federal agents raided his home on January 17, 2013. This was the first arrest of a Silk Road administrator, something that was a major success for investigators, who then gained access to private messages that Silk Road users had sent to each other.
They also had the details of transactions and information about the Bitcoin accounts of administrators and users, including the account of Silk Road’s alleged owner, Ross Ulbricht. It is not known exactly how, but DRP found out about his former admin’s arrest. Officials say it was possible the admin had told DPR out of a sense of loyalty, but it would eventually lead to a bizarre murder-for-hire plot.
Fearing his former admin would provide details about their operation, and claiming he had stolen money, DPR contacted the undercover agent posing as a drug dealer and initially asked him to torture “chronicpain”, but later decided this was not enough. Through court documents from the state of Maryland, it is alleged that Ulbricht “communicated with the UC [undercover cop] via the internet, and told the UC that the employee had been arrested by law enforcement and that the employee had stolen funds from other Silk Road users”.
Ulbricht had apparently told the cop “I’d like him beat up”, before changing the order the next day “to execute rather than torture”. He initially agreed to pay $80,000 for the admin’s death, and apparently “agreed to make two payments of $40,000 each for the murder of the employee, ‘half down now and half after the job is done.’” Investigators staged the torture and murder, which included mock waterboarding, and sent Dread Pirate Roberts.
About half a dozen of these pictures, included photographs depicting what they claimed was his corpse. Upon being shown staged photos of the employee being tortured, Ulbricht wrote confessing that he was “a little disturbed”, and that “I’m new to this kind of thing”. With the apparent evidence, he duly paid up. Law enforcement officials refused to confirm if Green was the admin that Ulbricht allegedly paid to have killed, but when asked to describe how the “dead” admin, “chronicpain,” looked in the staged images, one official said, “he looked very pale.”
The Nebraska Gun Smuggler
While most sellers traded exclusively in drugs, others were open to branching out into other illegal avenues. On June 28, 2013, a federal search warrant was executed at a residence in Lincoln, Nebraska, which belonged to 23-year-old Sheldon Kennedy. Agents recovered ten firearms, ammunition and various controlled substances, including Barbital powder, Phenazepam, Ethylphenidate, Ketamine, Etaqualone, Xanax, Valium, and Heroin. The trail that led to Kennedy was a USPS express mail package from China that was intercepted on January 6, 2012 and opened in San Francisco during a border search.
The package was being sent to Kennedy in Nebraska and was found to contain 55 grams of 4-fluoroamphetamine, a psychoactive drug and research chemical similar to MDMA, also known as ecstasy. As a result of this, agents began actively investigating Kennedy as part of the Silk Road inquiry, and in February 2013, undercover agents of the Baltimore taskforce bought contraband from Kennedy on Silk Road, who used the alias “edgarnumbers” to sell cocaine and a pistol.
Further investigation found that Kennedy was not licensed to sell firearms. Despite the anonymity afforded to users of Silk Road, he was known to post pictures of himself online, using social media such as on Facebook and Google+, where he advertised firearms, firearm accessories and large amounts of U.S. currency for sale. Kennedy also admitted selling at least 38 grams of cocaine, all of which were bought using Bitcoin. Soon Kennedy began co-operating with law enforcement.
He voluntarily provided agents with access to his Silk Road account, email accounts, and the electronic records that detailed shipping information, including names and addresses, for the sale of his drugs and firearms. Kennedy also provided control of his financial accounts used to conduct his criminal activities, including an account on the online Bitcoin exchange mtgox.com. For his involvement with Silk Road, Kennedy was sentenced in November 2015 to two years in prison.
The Fall of the Silk Road Empire
Additional arrests soon followed, including that of Steven Lloyd Sadler and Jenna White in July 2013, who were described as Silk Road’s ‘Bonnie and Clyde’. Under the nickname “Nod”, Sadler was in the top 1% of sellers on the site, and during the last four months of Silk Road’s existence, he sold more than 2,600 grams of cocaine, nearly 600 grams of heroin and 105 grams of methamphetamine.
After investigators performed a controlled purchase of drugs through the “Nod” account, Sadler’s home in Bellvue, Washington was raided and searched in July 2013, and there they seized cocaine, heroin, methamphetamine, a .45 caliber pistol and other contraband. Arrested alongside Sadler was his girlfriend and roommate Jenna White, who was also charged with drug offences. Initially Sadler had co-operated with investigators and was let out on bail pending charges.
One of the biggest sellers on Silk Road was a vendor who went by the username “SuperTrips”, and who was responsible for selling 104 kilograms of powder MDMA, 566,000 ecstasy pills containing MDMA, 4 kilograms of cocaine, 3 kilograms of Benzodiazepine and “substantial quantities of amphetamine, LSD and marijuana,” during the 18 months he operated on the marketplace. Due to the prolific nature of his drug operation, he soon became known as the Pablo Escobar of Silk Road.
In August 2013, 22-year-old Netherlands-born Cornelis Jan “Maikel” Slomp was picked up by federal agents in South Beach, as he was driving in his newly rented Lamborghini. Found to be in possession of a stash of ecstasy, he was clearly ready to party when he was apprehended. According to the FBI, the Dutchman, known by his online pseudonym “SuperTrips” had received approximately 385,000 bitcoins as payment for his drug sales, roughly $170 million. On May 29, 2015, Slomp was sentenced in Chicago to a 10 year prison sentence. Authorities were now closing in on ‘Dread Pirate Roberts’.
When Homeland Security agents arrived at San Francisco’s 15th Street in July 2013, after intercepting the package from Canada, they came face-to-face with Ulbricht without knowing his affiliation to Silk Road. The package contained nine fake ID’s, each with a different name but all bearing a photograph of Ulbricht. Investigators wondered why he would need nine fake ID’s, the answer to which would be answered through an earlier posting on the Silk Road forums.
Dread Pirate Roberts explained that he “needed a fake ID [to] rent servers”. Tarbell adds that “server hosting companies often require customers to provide some form of identity documents in order to validate who they are”. This was yet another mistake by Ulbricht, because in order to post a photocopy of a fake ID to a server hosting company, he was not required to put a photograph bearing his real face on it.
This mistake coupled with his use of the “Altoid” username to post messages advertising Silk Road on another forum, and then using the same nickname to post on a Bitcoin forum seeking workers for a start-up, had confirmed their suspicions that Ulbricht was DPR. In the latter message, “Altoid” told would-be job applicants to contact him at firstname.lastname@example.org.
In July 2013, authorities identified an overseas hosting company used to host the Silk Road site and obtained an image of the server, giving them access to all the private messages on the site. FBI agents finally arrested Ulbricht in October 2013, in the science fiction section of the Glen Park branch of the San Francisco public library system. He was charged with conspiracy drug and money laundering charges. He would also face a grand jury indictment in Maryland for conspiracy to commit murder, the most serious charge against him.
With the arrest of the eponymous ‘Dread Pirate Roberts’, the Silk Road marketplace was shut down permanently. After more than two years and $1.2 billion in transactions, the more than 950,000 registered users were locked out. Investigators now doubled down on their efforts to find the main dealers that operated on the dark web emporium. Four other suspects were arrested in the UK, one in his 50’s and the others in their 20’s.
Investigators announced that there are at least half a dozen other arrests currently underway, and U.S. Postal Inspectors and Customs and Border Protection agents had intercepted at least 3,000 suspicious packages they say can be connected to Silk Road users. In addition to the arrests, investigators also turned their attention towards Bitcoin exchangers, not just major exchangers such as Tokyo based Mt. Gox, but also individual sellers on Silk Road who provided exchange services to buyers and sellers on the site, using them as unregistered money transmitters.
Meanwhile, Steven Lloyd Sadler had been actively co-operating with law enforcement until November 2013, when he went on the run. After being kicked out of the condo where he’d lived for the previous seven years, and facing charges relating to his affiliation as one of the top sellers on Silk Road, Sadler said he “felt betrayed” by police and believed his co-operation should warrant better treatment.
Sadler had been in contact with Daily Dot. Reporter Patrick Howell O’Neill several times after his release on bail, and according to O’Neill, the last time was when he called him from his cellphone while driving his car, Sadler was, for all intents and purposes, a fugitive. “I hope I don’t get pulled over,” Sadler told him. It wasn’t long before Sadler was back in police custody. He was eventually sentenced to five years in prison.
That same month, DEA agents arrested 32-year-old Olivia Bolles, a doctor in Delaware who was accused of operating on the site under the moniker “MDPRO”, and making over 600 sales in 17 countries through Silk Road of Xanas, Adderall and Oxycontin, among other controlled substances. Bolles, who worked as a chief OBGYN resident at a Delaware Hospital, was arrested along with her roommate/fiancé Alexandra Gold, an OBGYN instructor as Johns Hopkins University.
The drugs sold by Bolles were hidden in packages called “Samples Unlimited” that contained candy. However, DEA investigators had been closely watching the MDPRO vendor, and an undercover DEA agent in Miami posed as one of her customers. He ordered a large consignment of pills, a THC e-cigarette and hash oil from the seller, which came in four different shipments, along with Sour Patch watermelon candy, Jolly Ranchers, Airheads and Lifesaver gummies.
The anonymous nature of Silk Road, with seller and buyer identities hidden through IP masking with Tor, along with the financial anonymity of Bitcoin, helped keep the criminal vendor of the site a closely guarded secret. However, the process of actually sending physical goods from one place to another meant that identities could leak. This is how DEA agents were able to connect MDPRO’s identity to Bolles.
When the agent received his first package of four Oxycontin tablets and Sour Patch candy, it had a USPS tracking number and a return address for Samples Unlimited’s P.O. Box. All other shipments came from the same address. The box was rented from PostNet, a business center, and a worker there told the agent it had been rented by Olivia Bolles, and it possessed copies of her driver’s licence and vehicle registration, as well as her phone number and VISA credit card information.
The P.O. box contained a package intended for Sacramento that had been returned to the sender. It was found to contain Xanax and Swedish Fish, and also contained a tracking number, which revealed it had been sent from an Automatic Postal Machine, which takes photographs and keeps them for 30 days. As part of the process, if the camera doesn’t manage to take a clear photograph of the user, it denies the payment for the postage.
When the postage inspector provided the DEA agent with the image, he compared it with Bolles’ license and with publicly available photos from her Facebook and MySpace page. He also managed to find an eBay account under the username “oBolles” which was used to purchase Breaking Bad-style laboratory equipment and chemicals useful for making THC and MDMA, including 2 litres of chloroform.
The VISA card led the agent to M&T Bank, where Bolles had made several Bitcoin deposits and had an account with Bitcoin exchange Coinbase. She had signed up with the email address oBOLLES@tormail.org, and with the exception of a seven Bitcoin purchase from Coinbase in March 2013 for $311.16, all the other transactions were in incoming. It was established that over a five months period in 2013, Bolles had cashed in 265.5 Bitcoin for $29,587.72. The price of Bitcoin which has risen considerably since.
Several other methods were used by the DEA in identifying Bolles and collecting information on her criminal activities. Gold later admitted to the DEA that she helped package the drugs. “Dr. Bolles was a respectable doctor by day and a drug trafficker by night when she went incognito on the underground website Silk Road to illegally sell highly abused pharmaceutical medications,” the DEA said in a statement. With the fall of Silk Road, investigators would make roughly 130 arrests in connecttion with the illegal online marketplace.
The Rise of Silk Road 2.0 and the Fall of the Pacific Northwest Syndicate
On November 6, 2013, administrators from the closed Silk Road market, and who were still at large, relaunched the site. Led by a new pseudonymous ‘Dread Pirate Roberts’, it was named Silk Road 2.0, and the newly appointed administration recreated the original sites set-up and promised that increased security had been improved. In another move to ensure the longevity of the resurrected Silk Road, the new DPR took the precaution of distributing copies of the site’s source code.
This was given to other users in order to allow the website to be quickly recreated in the event of another shutdown. The newly established trading post was similar to the original, in which it allowed traders to sell drugs, counterfeit goods, hacking tools and other illegal products, while each transaction to anonymized, to a degree, through the use of the cryptocurrency Bitcoin during exchanges.
Federal agents had previously seized six website servers from locations that included Romania and Latvia, which gave them a digital roadmap in identifying several of Silk Road’s higher-volume distributors. One such vendor, who was the biggest methamphetamine seller on the site, was known by the username “Hammertime”, who engaged in 3,169 transactions selling roughly 17.6 pounds of methamphetamine.
He and his associates, who became known as the Pacific Northwest Syndicate, sold the drug in small increments, typically a half-gram at a time, and hid them inside DVD cases labeled, ‘South Beach Workout’. “The quartet masked their IP addresses and used false identification including driver’s licenses to aid in shipping small amounts of the drug at a time through the mail to Oregon, Washington, Montana and Maryland as well as internationally in Canada, Czech Republic, Italy, Australia, the U.K. and other countries”, the indictment said.
The group’s customers eventually included several undercover federal agents who paid $1,400 in Bitcoin to buy just over 17 grams of meth. After the seizure of Silk Road’s servers, federal agents were able to identify 40-year-old Jason Weld Hagen as the significant drug vendor known as “Hammertime”, who operated on Silk Road between August 2012 to December 2013. Hagen, along with Chelsea Reder, Richard Webster and Donald R. Bechen were accused of selling methamphetamine which generated thousands of dollars in profits for the group.
“Bitcoins collected were converted into cash via Western Union, PayPal and other electronic money transfer systems. The group made more than $600,000 in nearly 3,200 transactions”. At Hagen’s residence in Portland, Oregon, federal agents found details for a number of bank accounts, cash cards, fake ID’s and PayPal accounts. Hagen had used a VISA card from Bak Zachodni in Poland, which he explained to investigators had been used to anonymously convert Bitcoin into cash. There were also 32 pre-paid debit cards and ten burner phones located during the property search.
An informant, a former Silk Road seller recently arrested, had tipped off the DEA about Hagen, who was arrested along with Chelsea Reder, Richard Webster and Donald R. Bechen, the other members of his online syndicate. The group earned roughly $607,220 from their drug trafficking activities on the Silk Road website. Hagen was facing a potential life sentence, however he requested a plea deal, at which he pleaded guilty to conspiracy charges of exporting meth and money laundering.
At a later court hearing in November 2015, Hagen and his three co-accused would received lighter sentences, owing to the actions of two corrupt federal agents who had been working on the Baltimore Silk Road Taskforce. One of these agents, Shaun Bridges, had been involved in the raid on Hagen’s home address, and was responsible for taking two encrypted USB storage devices, but failed to gain access to the information contained on the drives.
The sentencing recommendations to the Judge for the four defendants called for a reduced punishment, after authorities acknowledged the taint of corruption from the Baltimore agents. “In the spirit of fairness and an abundance of caution”, Hagen received a three year sentence instead of the roughly six years prosecutors ordinarily would have sought under federal sentencing guidelines. His three co-defendants also received reduced sentences because of the agents’ corruption.
Operation Onymous and the Fall of Silk Road 2.0
With the newly launched iteration of Silk Road up and running, investigators began Operation Onymous, in an effort to bring down the latest version of the market. By December 2013, detectives had identified two administrators who had been part of the original sites hierarchy, and who had been instrumental in setting up Silk Road 2.0. One of the men known by the username “Inigo” was identified as Andrew Jones, who was arrested that month along with forum administrator Peter Nash, who went by the online username “Samesamebutdifferent”.
By the new year, the second target known as “Libertas,” was arrested after being identified as Gary Davis, who along with Jones had continued their work on Silk Road 2.0. Jones received a sentence of 5 and half years, Nash would serve 17 months and Davis was handed a 6 and half year prison sentence. Around this same time, the new Dread Pirate Roberts abruptly surrendered control of the site and froze its activity, including the Silk Road’s escrow system. Then, a new temporary administrator going by the username “Defcon” took over and promised to return the site back to working order.
The new overseer of Silk Road announced on February 13, 2014, that the site’s escrow accounts had been compromised through a vulnerability in Bitcoin protocol called “transaction malleability”. Defcon claimed that although the site remained online, all the bitcoins in its escrow accounts, valued at $2.7 million, were reported stolen. It was later revealed that the vulnerability stemmed from the site’s “Refresh Deposits” function, and that the Silk Road administrators had used their commissions on sales since February 15, to refund users who lost money, with 50 percent of the hack victims being completely repaid as of April 8, 2014.
Officials with the Federal Bureau of Investigation, Europol, and Eurojust announced the arrest of Blake Benthall on November 4, 2014, who was allegedly the owner and operator of Silk Road 2.0, who went by the pseudonym “Defcon”. His apprehension happened the previous day in San Francisco and was part of Operation Onymous. With Benthall’s arrest, Silk Road 2.0 was effectively shut down, almost exactly one year after it was launched. Following the closure of Silk Road 2.0 in November 2014, Diabolus Market was rebranded by its admin staff as ‘Silk Road 3.0’, in order to capitalize on the Silk Road notoriety. Eventually, this site would also be shut down.
Around this same time, police forces in the UK arrested Thomas White, who they later said was the alleged creator of the relaunched website, and who went by the on usernames “Cthulhu,” and “Dread Pirate Roberts”. The arrest of the English computer programmer was not made public until he pleaded guilty in April 2019, to charges of running the website. Among the various charges, to which White admitted, was creating child pornography, something that went against the terms of service of the original Silk Road website. Chat logs recovered by police showed White discussing the possibility of launching a website to host such material. He was sentenced to five years and four months in prison.
One of the last high profile arrests associated with Silk Road 2.0 came in January 2015, when Brian Farrell was arrested in Seattle, and described at the time as the right-hand man of Blake ‘Defcon’ Benthall, the previously arrested administrator of the resurrected market. Farrell had originally used Silk Road 2.0 to purchase drugs for his own personal use, however after joining the site, he led a denial-of-service-attack on the Tor Market, a rival and competitor of the new Silk Road.
After this, Farrell, who went by the online psudonym “DoctorClu”, became the 2nd-in-command and also acted as the informal spokesman for “Defcon”. The tip-off that led to Farrell came from the Carnegie Mellon University’s Software Engineering Institute’s (SEI) investigation and attack on the Tor network. SEI researchers managed to identify the real IP addresses of a number of Tor hidden services, including that of Silk Road 2.0, along with hidden service users. The FBI then subpoenaed SEI for the information.
The FBI found that SEI had identified 78 IP addresses that had accessed the vendor .onion address for the Silk Road 2.0 website, and one of these led directly to Farrell. In December 2014, two men from Ireland were identified in the same attack, and later jailed for drug offences. In February 2016, another man was arrested after his IP address was obtained. Gabriel Peterson-Siler, a pedophile, later pleaded guilty to one count of possession of child pornography.
When 27-year-old Farrell was interview by FBI agents shortly before his arrest, he reportedly said “You’re not going to find much of a bigger fish than me.” Farrell eventually accepted a plea agreement in a district court in the Western District of Washington in March 2016, and was later sentenced in June 2016 to an 8 year prison sentence. Meanwhile, owing to his plea bargain, Benthall would serve no jail time, and only faced fines for avoiding taxes.
The Trial of Dread Pirate Roberts
Ulbricht’s trial began on January 13, 2015, and was charged with running a multi-million dollar online illegal marketplace. The specific charges including engaging in a continuing criminal enterprise, narcotics trafficking, money laundering, and computer hacking. At the start of the trial, Ulbrich admitted to founding the Silk Road marketplace, but claimed that soon afterwards he transferred control of the site to other people. The question of whether Ulbrich was Dread Pirate Roberts was an integral part of the case against him.
His defence alleged that Dread Pirate Roberts was not Ulbricht, but Mark Karpeles, who himself had been arrest in August 2015, several months prior to Ulbricht. Karpeles was the former CEO of Bitcoin exchange Mt. Gox., and had been arrested by Japanese police on suspicion of having accessed the exchange’s computer system in order to falsify data on its outstanding balance. He was later re-arrested, and charged with embezzlement. Karpeles had previously been suspected of being DPR in 2012-23 by the Deaprtment of Homeland Security.
The claim that Karpeles had set up Ulbricht as his fall guy was publicly denied by him on Twitter. Judge Katherine B. Forrest then ruled that any speculative statements regarding who ran Silk Road, whether it was Ulbricht of Karpeles would not be allowed, and any statements already made on that subject were stricken from the record. During the second week of the trial, prosecutors presented chat logs and documents from Ulbricht’s computer that they said, demonstrated how he had administered the site for many months.
Ross Ulbricht made a point of logging all of his encrypted, Tor-hidden chats, and kept a diary along with accounting spreadsheets that recorded all the financial transactions undertaken on his Silk Road account. In one of the many logged chats, Dread Pirate Roberts is shown making sure that his employee, Andrew Michael Jones, also known as Inigo, isn’t logging his Torchats. Inigo confirms that he wouldn’t do something so stupid.
At the time of his arrest, Ulbricht was caught in a public library, connected to the library wi-fi, with his laptop open, allowing investigators access to the files on his computer. His defence attorney suggested that the documents and chat logs had been planted there through use of BitTorrent, which had been running on Ulbricht’s computer at the time of his arrest. This attempt failed to sway the jury, and on February 4, 2015, the verdict was handed down.
On basis of the charges against him, Ulbricht was facing a maximum of 40 years in prison for possessing with the intent to distribute more than a kilogram of cocaine. The jury convicted Ulbricht of seven charges, including Money laundering, conspiracy to commit computer hacking, and conspiracy to traffic narcotics. On May 29, 2015, he was sentenced to double life imprisonment plus forty years, without the possibility of parole. According to sources, before the trial Ulbricht had been offered a plea deal which would have given him a decade-long sentence, but he turned it down, deciding instead to fight the case in court.
Ulbricht would appeal his conviction and sentence to the U.S. Court of Appeals for the Second Circuit in January 2016, based primarily on the claims that the prosecution illegally withheld evidence of the DEA agents’ malfeasance in the investigation of Silk Road, for which two agents were later convicted. The decision was issued in May 2017, with Ulbricht’s conviction and life sentence upheld. In December 2017 Ulbricht filed a petition for a certiorari with the United States Supreme Court, and this was later declined on June 28, 2018.
In 2019 Ulbricht attempted one last bid for freedom by requesting to vacate his life sentence, based on a claim of ineffective assistance of counsel by his defense lawyers. This attempt was rejected in August 2019. The following year, it was reported that President Trump considered commuting Ulbricht’s sentence before leaving office, but decided against such an action. Although the infamous Dread Pirate Roberts was behind bars, the Silk Road story had not quite reached its conclusion.
The Corrupt Silk Road Investigators
One month after Ulbricht’s sentencing in March 2015, authorities announced the arrest of two federal officers in connection with the Silk Road investigation. DEA agent Carl Mark Force IV and Shaun Bridges, an agent of the Secret Service, were both arrested on charges of corruption, money laundering, obstruction of justice and extortion. Force and Bridges had been part of the Silk Road Taskforce, a multi-agency and multi-jurisdictional law enforcement effort to bring down the darkweb marketplace and arrest the individual known as ‘Dread Pirate Roberts’.
As part of the Silk Road investigation, both federal agents had committed numerous crimes in what would prove to be deeply a embarrassing situation for the Government and yet another bizarre episode in the downfall of Silk Road. Only during the sentencing hearings in October 2015, did some of the details become known about the investigation into agents Force and Bridges, and those were only the crimes which authorities were certain they had committed.
Their involvement with the case began in June 2011, when the Silk Road Taskforce was established in Baltimore, Maryland, to investigate and bring down the administrators and moderators of the website. Starting in 2012, and continuing until late 2013, Force used a variety of aliases to access the Silk Road forums and alternated between extorting ‘Dread Pirate Roberts’, and selling him information on the taskforce investigation.
He was accused of seizing Bitcoins as part of the DEA enquiry, and then laundering it into his own personal accounts, rather than handing it over to the authorities. His involvement with these criminal actitivies began in January 2012, with the arrest of Jacob Theodore George IV who went by the username digitalink. With his seller account seized, investigators gained access to the Silk Road forum.
But it wasn’t until the January 2013 arrest of Silk Road admin Curtis Clark Green, who went by the names “Flush/chronicpain”, that authorities had control of an administrator account with access to private messages and seller information. This gave the taskforce direct access to the inner-workings of the Silk Road marketplace, and brought them one step closer to discovering the identity of Dread Pirate Roberts.
Ranked 72 out of 276 vendors on Silk Road, Green under the username chronicpain had 100% positive feedback from 101 transactions as of January 25, 2012. Green was invaluable to investigators not because of his role as a seller, but rather as a result of his position as a salaried employee under Dread Pirate Roberts. He became an administrator in November 2011, after he gained the trust of Ulbricht by mediating problems on the site. Upon hearing of his arrest, Ulbricht assumed that Green had stolen money and feared he would tell authorities about their business, and sought out someone to punish his former admin.
Unbeknown to investigators and Ross Ulbricht, the theft he accused Green of committing was actually carried out by Shaun Bridges, another corrupt federal agent on the taskforce. Agent Bridges stolen Bitcoin from Silk Road users, something Green would take the blame. Ulbricht reached out another member who used the username “Nob”, who was in fact Carl Mark Force, and requested the undercover agent help him find someone to torture Green. Just a few days later, Ulbricht changed his order to “execute rather than torture.”
He cited personal issues if a punished employee were to approach and inform authorities. Nob/Force agreed, asking the Silk Road leader to pay two instalments of $40,000 for the murder for hire plot. The first payment was made on February 4, 2013, wired from an account with the now-defunct Technocash Limited in Australia to a Capital One Bank account in Washington, D.C. Around that same time, authorities informed Green of the murder plot.
While Agent Force continued to engage with Dread Pirate Roberts concerning the details of the planned torture and murder of Green, other agents worked with the former Silk Road employee to stage the results. On February 16, the fabricated photographs of Green’s “torture” were sent to Roberts. Less than a week later, a faked photograph of Green, appearing to show his dead body, was also delivered to which Ulbricht.
The Silk Road owner allegedly replied, “I’m pissed I had to kill him… but what’s done is done.” The second $40,000 instalment was sent to the Capital One Bank account on March 1, 2013. According to court document unsealed from his trial, prosecutors believe they known how Ulbricht paid for the murder-for-hire plot. Despite his insistence on anonymity and security through Tor, PGP encryption, and Bitcoin, Dread Pirate Roberts used a bank wire transfer to pay for his murder-for-hire plot.
At his later trial, his lawyer Ivan Bates described how Force had experienced a troubled childhood, along with his “broken family”, drinking problems, mental health issues, the stress of his job, and the death of his father in April 2013, had all contributed to the decisions he made with regards to his criminal activities. Around the same time as his father’s death, Force created the account “DeathFromAbove,” with which he began using in an attempt to extort DPR.
In his attempt to blackmail Dread Pirate Roberts from the Silk Road account DeathFromAbove, Force claimed he knew his real identity, and provided proof. The “real identity” that Force tried to use against DPR was taken directly from the investigation’s internal files. The name provided to Ulbricht by Force was that of “Anand Athvale”, a person with Indian citizenship, which was clearly not DPR. Force signed off the extortion message, “So, $250,000 in U.S cash/bank transfer and I won’t give you identity to law enforcement. Consider it punitive damages. DeathFromAbove”
During the trial it was revealed that Anand Athavale is the real life identity of mises.org poster “libertystudent”. It is unexplained as to why Silk Road investigation thought this person was DPR. But it is believed by using a language analysis, investigators learned that both occasionally spelled certain words the same way, such as “a lot” as “alot,” “labor” as “labour,” “real time” as “real-time,” “let me” as “lemme,” “phony” as “phoney,” and “route” as “rout.”
Additionally, both preferred to end sentences with “, right?”, and both used terms like “intellectual laziness,” “agorism,” agorist,” “counter-economics,” “altruistic,” “phoney,” “paleo-human,” and “anarcho-capitalist.” Athavale and Ulbricht also both occasionally used all capital letters for emphasis, didn’t capitalize the first word in a sentence when in a hurry, and used “the symbol for backslash on the computer to split words with similar meaning.” Lastly, they also discussed authors Murray Rothbard and Samuel Konkin.
In August 2013, Force attempted to sell information to DPR under the name French Maid, yet another account he created on Silk Road. At one point, Force accidentally signed off as “Carl,” then had to follow up with “I am sorry about that. My name is Carla Sophia and I have many boyfriends and girlfriends on the market place.” This bizarre mistake is perhaps more indicative of the serious drinking problem and mental health breakdown that Force was undergoing at that time. Meanwhile, the two corrupt agents continued to steal from Silk Road.
The money Force and Bridges had stolen and extorted from Silk Road were processed through a number of bitcoin and payment companies. However, because of the suspiciously large amounts of money being processed, Force kept triggering anti-money laundering / Know Your Customer checks, exactly the same kind of regulation that he himself was enforcing in his capacity as a DEA agent. In the case of both Venmo and BitStamp, he tried to bypass any account blocks or KYC checks by waving around his status as a DEA agent.
It is unclear how many companies he did this to, and investigators only became aware of Venmo and BitStamp because these companies resisted. In April 2014, representatives of bitcoin exchange BitStamp messaged Force, asking him why he was accessing his account through use of Tor. He responded through the support ticket: “I utilize TOR for privacy. Don’t particularly want NSA looking over my shoulder :)” This reply naturally raised a red flag with BitStamp management.
At this point his account was blocked, and later unblocked and blocked again repeatedly for the rest of the month. At some point, BitStamp notified law enforcement of the situation, and the investigation into Force began. Ross Ulbricht was arrest on October 1, 2013, after a series of blunders online gave his identity to Silk Road investigators. Only a few weeks prior, Curtis Clark Green had been offered a plea agreement based on legal documentation. He would, however, face a maximum of 40 years in prison for possessing with the intent to distribute more than a kilogram of cocaine.
The following month, Silk Road 2.0 was established, and Operation Onymous was set-up and tasked with bringing down the new incarnation of the marketplace. It wasn’t until March 30, 2015 that Carl Mark Force IV and Shawn Bridges, the federal agents who had worked undercover in the Baltimore Silk Road investigation were both arrested. They were held on wire fraud and money laundering charges, which were part of a much larger corruption investigation that had been on-going for several years.
Force pleaded guilty in July 2016 to money laundering, obstruction of justice, and “extortion under color of official right” He was charged alongside Bridges, and their sentencing was scheduled for later in the year. No mention of Force or his corrupt partner Shawn Bridges had made it into Ross Ulbricht’s trial, due to the spree of crimes they committed as Silk Road investigators having been under the seal of a grand jury at the time. After Ulbricht’s arrest, Force continued to seize bitcoins under the aegis of his DEA authority, and up to the time of his arrest, the two men had stolen $607,000 from Silk Road.
In October 2016, Force was sentenced to 6 and half years, while his partner Shaun Bridges received a 2-year-sentence. At his sentencing hearing, he announced before the court, “I would like to publicly apologize to the American people, to the US government, to my friends and family. I’m sorry. I lost it. I don’t understand a lot of it.” Force will be required to pay $337,000 in restitution to “R.P.,” an individual whose bitcoins he seized unlawfully under the guise of official DEA business. In addition, he was ordered to pay $3,000 in restitution to “C.G.,” who is almost certainly Curtis Clark Green, the informant whose death Force helped to fake in order to fool Ross Ulbricht.
“The extent and scope of Mr. Force’s betrayal of the public trust is quite breath-taking,” Judge Seeborg said. He called Force’s actions “an extended, complex—one might even say, devious and clever—scheme. You can’t blame that on ‘I lost my father,’ or ‘I had a lot of stress.'” Assistant US Attorney Kathryn Haun said “The Carl Mark Force affair is an astounding instance of corruption, and it very nearly compromised the entire Silk Road investigation. “Had it not been for the New York investigation, the government’s ability to prosecute Ulbricht would have been severely impaired.”
After several years of inactivity, observers of the bitcoin blockchain noticed that two transactions, totalling 69,370 bitcoin and bitcoin cash, worth approximately $1 billion in total at the time of transfer, had been made on November 3, 2020, from a bitcoin address associated with the defunct Silk Road. At the time of the transfers, the bitcoin was worth 58 times the value of what it was in 2015. It was later revealed that this transfer had been made by the United States government as part of a civil forfeiture. According to government sources, the bitcoin wallet belonged to an anonymous “Individual X,” who had originally acquired the bitcoins through hacking the Silk Road.
Despite the shutting down of Silk Road, there is already a cornucopia of new sites that serve the same function, something that has called into question whether the government can ever truly prevent dealers from selling online. In May 2014, the FBI held a cyber security summit to discuss the future of rooting out criminals online. According to Reuters, Robert Anderson, the FBI’s top cyber security agent, told the conference that the FBI is getting more aggressive in “pursuing cyber criminals”. “If we can reach out and touch you,” Anderson said, “we are going to reach out and touch you.”
Websites similar to Silk Road have existed both before and after its demise. The Farmer’s Market, another dark web Tor site was shut down by the FBI in 2012, having been in existence for around two years prior. Other sites operating at the same time as Silk Road include ‘Atlantis’ and Project Black Flag, which were shut down in October and November 2013 respectively, and both of whom each stole their members Bitcoins. In October 2013, the Black Market Reloaded closed down temporarily after the site’s source code was leaked online.
Although the actions of the Silk Road marketplace were illegal and harmful, advocates of the dark web have cited the peaceful nature of buying banned narcotics from the safety of your home, rather than purchasing them from criminals in the street, as a better alternative in relation to the chaotic and deadly global drugs war that claims the lives of thousands each year. One thing, however, is certain. Silk Road was a milestone for the sale of illegal wares online, and the internet has not the seen last of the dark web bazaars.
In 2021, a pre-recorded telephone interview with Ross Ulbricht was broadcast at a conference for Bitcoin investors, at which he spoke about the potential of the cryptocurrency, his motivations for creating Silk Road, as well as his imprisonment. He said, “The irony is that I made Silk Road in the first place because I thought I was furthering the things I cared about: Freedom, privacy, equality. But by making Silk Road, I wound up in a place where those things don’t exist.”
Written by Nucleus
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