Eight months after Ulbricht’s conviction, his legal team argues that the actions of DEA agents Carl Force and Shaun Bridges, both found to be stealing bitcoins from Silk Road during their investigation, were not disclosed to the court during Ulbricht’s trial, nor was the investigation into the two agents made known to the defense team.
The 145-page appeal asks that the higher courts to expunge Ulbricht’s conviction for all seven charges – narcotics trafficking, computer hacking, money laundering, conspiracy to traffic fraudulent IDs and engaging in continuing criminal enterprise – arguing that the court deliberately withheld information regarding the investigation into Force and Bridges.
“To a significant degree the extent, and in some respects the nature, of Force’s misconduct – as well as Bridge’s participation altogether – was hidden by the government from the defense (and the court) in this case until after the trial,” writes Lead attorney Joshua Dratel.
“The life sentence imposed on 30-year-old Ross Ulbricht [now 31] shocks the conscience,” Dratel adds, “and is therefore substantially unreasonable. Accordingly, Ulbricht should be re-sentenced before a different judge to avoid the irremediable taint from the improper factors the court considered.”
In the wake of the Paris terror attacks, French police has submitted proposals to ban anonymous web browser Tor and block Wi-Fi networks in public places to President Francois Hollande (pictured), according to French newspaper Le Monde (via Business Insider). La Monde has acquired documents that show the French government is taking the proposal very seriously and it could be included in France’s new anti-terrorism bill, which could come into effect as early as January.
According to Vice Motherboard, French authorities want “to block or forbid communications of the Tor network” and “Forbid free and shared wi-fi connections” when a state of emergency is declared, similar to mobile phone networks being taken down during such a time.
If France does introduce a ban on the Tor browser, it has two options with which to enforce it: a legal ban, which would outlaw its use at risk of prosecution, and a technological ban, which would require the installation of a China-esque national firewall that blocks Tor entry nodes. The latter is sure to worry free speech and civil liberties activists.
Shaun Bridges, a former US DEA agent who was investigating the online drug marketplace Silk Road, has been charged with obstructing justice and money laundering. He has since admitted the charges that were levelled against him.
So, how did Mr Bridges nick quite so many Bitcoins with a huge resale figure? According to the US Department of Justice (DoJ), Bridges was granted as part of the investigation to the rights to an administrator account on the notorious deep web black marketplace Silk Road. He misused his account by resetting the passwords and pocketing around 20,000 in Bitcoins from numerous wallets on the service, he then transferred the digital currency into his own wallet. Having quite a lot of Bitcoins in a virtual wallet is fun and all, but, Mr Bridges envisaged a big financial reward and subsequently sold off the stolen Bitcoins on the Mt Gox exchange between March to May 2013, which netted him a combined figure of $820,000 in cash.
When the net closes tightly around you, Shaun Bridges decided to admit all as part of a plea deal, he also admitted that during the investigation of Silk Road he had lied to investigators and also tried to obstruct them in their duties.
This is why government law enforcement is unable to take the moral high ground in cases like this. Yes, what Ross Ulbricht and co operated was illegal, but the actions of the former agent in question weren’t exactly saint like either. It’s difficult to convey the evils of this type of behaviour to would-be cyber criminals when the supposed “good side” have also been charged with theft.
A perfect summary of this case arrives courtesy of US Attorney Melinda Haag who Stated the following
“Mr. Bridges has now admitted that he brazenly stole $820,000 worth of digital currency while working as a U.S. Secret Service special agent, a move that completely violated the public’s trust. We depend on those in federal law enforcement having the highest integrity and unshakable honour, and Mr. Bridges has demonstrated that he utterly lacks those qualities.”
A part of preventing crime is trust in those who defend the law-abiding, if trust is disappearing after scandal upon scandal, it’s difficult to regain it.
Thank youtechworm for providing us with this information.
The head of the Baltimore task force that was investigating the Silk Road black market website has pled guilty to using the site to extort money, and even admitted to agreeing a $240k deal for the movie rights to his investigation with a major Hollywood studio. Carl Mark Force has admitted to charges of extortion, money laundering, and obstruction of justice – all conducted while he was investigating Silk Road – in front of US District Judge Richard Seeborg in San Francisco.
Under the online pseudonym ‘Nob’, the government-sanctioned account through which the investigation was conducted, Force interacted with Dread Pirate Roberts, the username of Silk Road creator Ross Ulbricht, over Silk Road, during which he took bitcoin payments from Ulbricht that he did not declare to his superiors, instead diverting the funds into his personal accounts. Ulbricht was sentenced to life imprisonment earlier this year for his involvement in Silk Road.
Force set up a second Silk Road account, ‘French Maid’, through which he accumulated around $100,000 in bitcoins by selling law enforcement “counter-intelligence”. A third account, ‘Death From Above’, was used, unsuccessfully, by Force for further extortion.
The court also found that Force was operating under two conflicts of interest, having agreed to sell the film rights to the Silk Road investigation to 20th Century Fox for $240,000 in 2014, unbeknownst to his bosses at the DEA, and using his company CoinMKT to confiscate money by using his law enforcement credentials. Force took $370,000 from a single user, depositing $37,000 in a DEA account and pocketing the rest.
Force will be sentenced in October.
Thank you Ars Technica for providing us with this information.
The conviction of Ross Ulbricht for creating and running the online black marketplace Silk Road has elicited some heated reactions, with many attacking the case’s judge for ignoring Ulbricht’s plea for leniency in favour of making an example out of him in the war against drugs in her sentencing. Now, in the wake of the trial, prosecutors are seeking to prosecute a number of people who made comments online about the judge.
The US Department of Justice is attempting to trace the identities of certain commenters on Libertarian website Reason.com, as revealed by Popehat, a legal blog that published the grand jury subpoena outlining the DoJ intent to find the posters of derogatory comments regarding US District Judge Katherine Forrest.
“Why is the government using its vast power to identify these obnoxious asshats, and not the other tens of thousands who plague the internet?” Ken White, blogger for Popehat wrote. “Because these twerps mouthed off about a judge.”
After Ross Ulbricht’s sentencing, Reason.com published a blog, sympathetic to Ulbricht, calling Silk Road “a revolutionary website that made it easier and safer to buy and sell illegal drugs” and lamenting that Ulbricht’s plea for leniency went ignored. The post garnered over 100 comments, the majority of which were extremely negative toward Judge Forrest.
Prosecutors have taken exception to eight comments in particular, and are seeking “any and all identifying information” related to them. Here are the eight comments that have cause such ire:
Agammamon: Its judges like these that should be taken out back and shot.
Alan: It’s judges like this that willbe taken out and short. FTFY.
croaker: Why waste ammunition? Wood chippers get the message across clearly. Especially if you feed them in feet first.
Cloudbuster: Why do it out back? Shoot them out front, on the steps of the courthouse.
Rhywun: I hope there is a special place in hell reserved for that horrible woman.
Alan: There is.
Product Placement: I’d prefer a hellish place on Earth be reserved for her as well.
croaker: F**k that. I don’t want to oay [sic] for that c**t’s food, housing, and medical. Send her through the wood chipper.
The subpoena was issued to Reason.com, demanding identifying information related to the above commenters on the grounds of “interstate threats”, a violation of Federal law 18 USC Section 875.
Is this just a case of hyperbolic internet idiots, or should such comments be taken seriously as threats?
Thank you Ars Technica for providing us with this information.
Have you heard of the Silk Road? It’s been pretty big news recently. The website was the core of “the dark web” – a side of the internet that was only accessible to the uppermost of criminals.
The main person behind the Silk Road (Ross Ulbricht) was convicted for Life this week, after being prison since the 1st of October 2013. Ars Technica have published an article telling us what happened on that day:
On October 1, 2013, the last day that Ross Ulbricht would be free, he didn’t leave his San Francisco home until nearly 3:00pm. When he did finally step outside, he walked ten minutes to the Bello Cafe on Monterey Avenue but found it full, so he went next door to the Glen Park branch of the San Francisco Public Library. There, he sat down at a table by a well-lit window in the library’s small science fiction section and opened his laptop.
From his spot in the library, Ulbricht, a 29-year-old who lived modestly in a rented room, settled into his work. Though outwardly indistinguishable from the many other techies and coders working in San Francisco, Ulbricht actually worked the most unusual tech job in the city—he ran the Silk Road, the Internet’s largest drug-dealing website.
Shortly after connecting to the library WiFi network, Ulbricht was contacted on a secure, Silk Road staff-only chat channel.
“Are you there?” wrote Cirrus, a lieutenant who managed the site’s extensive message forums.
“Hey,” responded Ulbricht, appearing on Cirrus’ screen as the “Dread Pirate Roberts,” the pseudonym he had taken on in early 2012.
“Can you check out one of the flagged messages for me?” Cirrus wrote.
“Sure,” Ulbricht wrote back. He would first need to connect to the Silk Road’s hidden server. “Let me log in… OK, which post?”
Behind Ulbricht in the library, a man and woman started a loud argument. Ulbricht turned to look at this couple having a domestic dispute in awkward proximity to him, but when he did so, the man reached over and pushed Ulbricht’s open laptop across the table. The woman grabbed it and handed it off to FBI Special Agent Thomas Kiernan, who was standing nearby.
Ulbricht was arrested, placed in handcuffs, and taken downstairs. Kiernan took photos of the open laptop, occasionally pressing a button to keep it active. Later, he would testify that if the computer had gone to sleep, or if Ulbricht had time to close the lid, the encryption would have been unbreakable. “It would have turned into a brick, basically,” he said.
Then Cirrus himself arrived at the library to join Kiernan. Jared Der-Yeghiayan, an agent with Homeland Security Investigations, had been probing Silk Road undercover for two years, eventually taking over the Cirrus account and even drawing a salary from Ulbricht. He had come to California for the arrest, initiating the chat with Ulbricht—who had been under surveillance all day—from a nearby cafe.
Looking at Ulbricht’s computer, Der-Yeghiayan suddenly saw Silk Road through the boss’ eyes. In addition to the flagged message noted by Cirrus, the laptop’s Web browser was open to a page with an address ending in “mastermind.” It showed the volume of business moving through the Silk Road site at any given time. Silk Road vendors concealed their product in packages shipped by regular mail, and the “mastermind” page showed the commissions Silk Road stood to earn off those packages (the site took a bit more than 10 percent of a typical sale). It also showed the amount of time that had been logged recently by three top staffers: Inigo, Libertas, and Cirrus himself.
Ulbricht was soon transferred to a New York federal prison; bail was denied. In addition to charges of drug dealing and money-laundering, prosecutors claimed that Ulbricht had tried to arrange “hits” on a former Silk Road administrator and on several vendors. Though Ulbricht had in fact paid the money, the hits themselves were all faked—in one case, because a federal agent was behind the scheme, in another because Ulbricht appears to have been scammed using the same anonymity tools he championed.
Despite having been caught literally managing a drug empire at the moment of his arrest, Ulbricht pled not guilty. His family, together with a somewhat conspiracy-minded group of Bitcoin enthusiasts, raised a large pool of money for his defense. With it, Ulbricht hired Joshua Dratel, a defense lawyer who has handled high-profile terrorism trials.
Dratel did not reach any sort of plea deal with the government, as is common in such cases. Beyond a general insistence that his client was not, in fact, the Dread Pirate Roberts, Dratel offered no public explanation of what had happened in the Glen Park library—until January 2015, when the case went to trial at the federal courthouse on Pearl Street in lower Manhattan.
“Ross is a 30-year-old, with a lot at stake in this trial—as you could imagine,” Dratel said in his opening statement, addressing the jury in a low-key voice. “This case is about the Internet and the digital world, where not everything is as it seems. Behind a screen, it’s not always so easy to tell… you don’t know who’s on the other side.”
Ulbricht, he said, was only a fall guy, the stooge left holding the bag when the feds closed in; the “real” Dread Pirate Roberts was still at large. But would the jury buy this unlikely story?
The Silk road was a massive network of servers that provided a website to be able to buy almost every drug and illegal substance known to man. Upon login, users could see pictures of the substances and be able to access other tools such as hacking tools, fake ID’s and an illegal coupon scheme. All of which were held against Ulbricht in his trial. The site operated with a simple interface and had extensive user forums, providing a similar experience to Ebay and Craigslist. The website itself had no contact with drugs; it linked buyers and sellers together then taking a percentage of each transaction.
To access the website you had to use two technologies. Tor and Bitcoin. Tor was developed by the US navy originally and now managed by a nonprofit organization. It helped anonymize traffic by routing between several servers and encrypting the traffic on its way through.Bitcoin is known as a cryptocurrency; also an anonymous method for paying money to other anonymous people.
In July 2013, Der-Yeghiayan scored a bigger prize, taking over the account of a Silk Road staffer named “Cirrus.”
“Cirrus has always been dedicated to our community at large,” Dread Pirate Roberts explained in a private message introducing Cirrus to his small group of administrators shortly before Der-Yeghiayan took over the account.
Adopting Cirrus’ identity, Der-Yeghiayan earned 8 bitcoins a week—about $1,000 at the time—for moderating forum posts. After several weeks, he got a raise to 9 bitcoins a week. He was paid right up until the Silk Road site was shut down in October 2013.
For two years, Der-Yeghiayan worked the case without ever knowing DPR’s real name; he learned about “Ross Ulbricht” from another office just days before the arrest.
Homeland Security Investigations began making purchases from Silk Road, many of them under an account taken over from an existing site user called “dripsofacid.” (Various law enforcement agencies created their own accounts on Silk Road during its existence, but they also took over others after arresting their owners.)
When HSI made their controlled buys, they had the shipments sent to a name and address they used specifically for undercover purchases. Investigators compared the product received to the listing on Silk Road to confirm its origin. One purchase shown to the jury was 0.2 grams of brown heroin, bought from a seller in the Netherlands. The packaging was professional—the heroin tucked inside several plastic bags, which were themselves contained in a vacuum-sealed pouch, which was invisible behind a bluish sheet of paper.
Ultimately, HSI made 52 undercover buys from more than 40 distinct Silk Road dealers in 10 different countries. The drugs were all tested, and all but one purchase resulted in genuine goods. Silk Road, whatever one thought of it, worked as a market.
On the darknet, drugs are still available. But nowhere near the Silk Road has been seen, before or since. “Silk Road 2.0,” launched within a few months of Ulbricht’s arrest, lasted less than a year until its alleged creator, 25-year-old Blake Benthall, was arrested in San Francisco.
The most popular Silk Road successor, a darknet site called Evolution, shut down without warning in March—when its founders apparently emptied out the $12 million in its escrow system and ran. This sort of “exit scam” was the type of large-scale theft that users of such markets always knew was possible.
Any sense that the darknet could be a safe haven has now been shattered but Silk Road began years earlier, when the dream of creating a cryptographically protected libertarian utopia right in the midst of conventional society still seemed a reasonable proposition. But it was never likely to succeed for long—a fact that Ulbricht has now learned the hard way.
Thank you to ArsTechnica for providing us with this information
The jury in the Silk Road court case has ruled that Ross Ulbricht is guilty of all seven charges in a Manhattan court on Wednesday. The jury were convinced that Ulbricht was Dread Pirate Roberts, Silk Road’s shadowy mastermind, returning their verdict in just three-and-a-half hours.
The evidence against Ulbricht appeared overwhelming: when he was arrested in a San Francisco public library, Ulbricht was logged into the Silk Road admin account on his laptop. Law enforcement found thousands of pages of evidence spanning many years on the seized laptop linking Ulbricht to the Dread Pirate Roberts alter ego.
Though Ulbricht’s legal team admitted that Ulbricht had created Silk Road, they claimed that he had done so as an “economic experiment” and had handed the site over to others before it became the black market it was notorious for. “The real Dread Pirate Roberts is out there,” Joshua Dratel, Ulbricht’s lead attorney said.
The legal team is to appeal the decision, citing frequent grounds for a mistrial and questioning the decisions of the judge during the trial.
Amongst Ulbricht’s convictions is two charges – one for continuing criminal enterprise, the other for narcotics conspiracy – that could land him with a minimum jail sentence of 30 years, up to life imprisonment.
Ross Ulbricht, the man being tried for masterminding darknet black market Silk Road, has admitted to creating the site, but, according to his defence attorney Joshua Dratel, has denied that he is the site’s shadowy manager Dread Pirate Roberts.
Dratel made the distinction in his opening statement on the first day of precedings in a Manhattan federal court on 13th January. He claims that his client set up Silk Road as an “economic experiment”, but handed the site over to others months after. The new owners, says Dratel, then used Ulbricht as the “fall guy” once law enforcement took an interest in the site.
“After a few months, he found it too stressful for him, and he handed it over to others. At the end, he was lured back by those operators to […] take the fall for the people running the website.,” said Dratel. He then stressed, “Ross was not a drug dealer. He was not a kingpin.”
According to the prosecution, Ulbricht was “literally caught with his fingers at the keyboard, running the Silk Road.” When Ulbricht was arrested in San Francisco Public Library, law enforcement found him logged into the site with related chat logs open. Assistant U.S. Attorneys Serrin Turner and Timothy Howard seem confident they can prove that Ulbricht is the real Dread Pirate Roberts.
The trial of Ross Ulbricht – accused of drug trafficking, computer hacking, conspiracy to traffic fake IDs, money laundering, and continuing a criminal enterprise – is set to continue for the next four to six weeks.
Alleged founder and manager of the Bitcoin based black-market website Silk Road, Ross Ulbricht, reportedly pleaded not guilty to all charges raised against him by the US government. The charges against Mr Ulbricht are incredibly serious including trafficking in narcotics, computer hacking, money laundering and engaging in continuing criminal enterprise. The “continuing criminal enterprise” charge is often reserved for the largest Mafia/Cartel-like bosses.
Previous speculation had suggested that Ross Ulbricht would cooperate with his prosecutors for a more lenient sentence by facilitating the arrest and prosecution of other figures in the “dark web” drug industry he was apparently a key figure in. This speculation was based on the recent arrest of three more alleged Silk Road employees in December and the arrest of Bitcoin foundation Vice Chairman Charlie Shrem last month, who was charged with money laundering related to Silk Road.
Mr Ulbricht’s trial isn’t due to take place until November 2014 and in the mean time the defence and prosecution will be able to review are prepare their evidence for the expected 4 to 6 week trial. Ross Ulbricht’s defence is expected to attack the enforcement methods used by the prosecution citing illegal or improper surveillance techniques.
Silk Road, the illegal drug and services website that was operating on the Tor network, was taken off-line last week. This was shortly after the sites founder was arrested and questioned by the FBI.
Now we see the story developing as four more men have been arrested in the UK for their role in the online marketplace. Three men in their early 20’s from Manchester, plus a man in his 50’s from Devon have been detained on suspected drug offences. Further arrests are expected later in the week.
Given that The Silk Road was one of the world’s largest (if not the largest) websites for the sale of illegal drugs and related products and services, this marks a big step for the UK’s newly setup National Crime Agency (NCA), effectively the UK equivalent of the FBI.
Of course it is only the first step in fighting online money laundering, drug trafficking and more as there have been numerous other sites fighting to fill the void that the site closer left. Customers are simply going elsewhere and the arrest will have little effect on the customers and distributors related to the site, even with a few arrests.
Keith Bristow, the NCA’s director general said “These arrests send a clear message to criminals; the hidden internet isn’t hidden and your anonymous activity isn’t anonymous. We know where you are, what you are doing and we will catch you.”
With site owner Ross Ulbricht arrested and a few other people now taken in for questioning, it is becoming clear that the so-called anonymous service that is the Tor network, isn’t so anonymous any more.
Thank you BBC for providing us with this information.
Ross Ulbricht, the alleged mastermind of Silk Road, the infamous online drug marketplace was arrested earlier this week as the site was taken offline from the Tor (onion network) that it operated on. Tor is a network like the internet which operates outside of the normal world wide web we typically use day to day, it provides a (supposedly) anonymous service that has become a magnet for organised crime.
Ross Ulbricht, 29, has been deemed too dangerous to be bailed. He has been accused of arranging the killing of one of the sites users in which the FBI stated that Mr Ulbricht had sought to pay another Silk Road user to kill another user for threatening to expose details of many of the sites users.
“We deny all charges and that is the end of the discussion at this point,” Mr Ulbricht’s lawyer said.
This is a landmark case given that Tor has been the play ground of many illegal activities and it just goes to show that police are closing in on many of the illegitimate uses of the site. With Silk Road being one of the most popular and well-known services on the network shut down it is likely copy cat sites will take its place.
A request from his legal team for a bail hearing to be pushed back was granted and will now take place on October 9th.
Given the scale of the site which is said to have generated $1.2 billion, we suspect that this case will spawn quite a lot of extra investigations and charges in the coming months.
Thank you BBCfor providing us with this information.