After spending months trying to infiltrate an underground website that made buying and selling recreational drugs nearly as easy as shopping online for a book or TV, half a dozen FBI agents shuffled into the science fiction section of a San Francisco library and grabbed a young man working on a laptop.
Authorities say the man was San Francisco resident Ross William Ulbricht, and they accused him of being ‘‘Dread Pirate Roberts,’’ the once-anonymous mastermind behind the online drug marketplace known as Silk Road.
Ulbricht, who US authorities claim ran the ”Silk Road Hidden Website” from January 2011 until last month, had called himself ”Dread Pirate Roberts” or ”DPR,” after a character in the 1987 film The Princess Bride. Before venturing into the illicit online retail business, which prosecutors described as ”the most sophisticated and extensive criminal marketplace on the Internet” he spent more than five years as a student.
The federal complaint accuses him of computer hacking, narcotics trafficking and money laundering. The government also said he spent $US150,000 on a hit man to try to get rid of a blackmailer who threatened to expose users of the site.
The FBI said Ulbricht ran Silk Road from San Francisco, where he had been living for the past year, including at an internet cafe not far from his home. They said that since at least 2011, he has generated tens of millions of dollars worth of commissions by facilitating the sale of heroin, cocaine, LSD and other drugs.
He had graduated from the University of Texas with a physics degree in 2006, then attended graduate school at the University of Pennsylvania School of Materials Science and Engineering from 2006 to 2010. After graduate school, Ulbricht wrote on his LinkedIn profile, his goals had ‘‘shifted,’’ prompting him to create an ‘‘economic simulation 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,’’ the FBI said.
That ‘‘simulation,’’ the government alleges, was Silk Road.
On the Silk Road operation, Ulbricht allegedly ran a tight ship, employing a small staff of administrators, whom he paid an average of $US1000 to $US2000 a week to help operate the site, according to investigators. The administrators filed weekly reports on their activities, asked him for guidance in dealing with user inquiries and sought permission before taking leave.
On September 23, Silk Road had almost 13,000 listings for illegal drugs, under categories including cannabis, dissociatives, ecstasy, intoxicants, opioids, precursors, psychedelics and stimulants, according to the complaint. Under its ”services” heading, users could hire computer hackers, buy instructions for hacking cash machines or obtain a list of black-market contacts to get anonymous bank accounts, counterfeit money, guns, stolen credit card information and hit men.
A ”seller’s guide” on the site advised users to vacuum seal packages containing drugs to avoid detection by police dogs and drug-detection machines.
To hide his illegal activities from authorities, Ulbricht ran Silk Road on ”The Onion Router” or ”Tor” network, an Internet network designed to hide the identities of users by making it almost impossible to identify computers used to access or host websites, prosecutors said.
Yet a beginner’s error may have brought him undone. According to a Slate blogger Ulbricht visited Stack Overflow, a website which invites users to answer questions about coding problems, in March 2012 to ask two questions. One of those questions, ”How can I connect to a Tor hidden service using curl in php?” caught the attention of the FBI.
Ulbricht had posted the question using his own name, and having noticed his mistake less than a minute later, quickly changed it to his username ”frosty”. The careless error would prove costly. It was picked up by the FBI and cited as a key piece of evidence against him in the criminal complaint filed in a federal court in Manhattan this week.
Beginning in November 2011, undercover agents made more than 100 drug purchases, including ecstasy, cocaine, heroin and LSD, from Silk Road vendors, according to the complaint.
On August 5, 2011, DPR notified users of a new category of illegal items for sale on the site.
”We are happy to announce a new category in the marketplace called forgeries,” he said in a message posted on the site. ”In this category, you will find offers for forged, government issued documents including fake IDs and passports.”
The legal documents made public Wednesday provided a window into an enterprise that, according to the government, generated $US1.2 billion in illicit sales and took in $US80 million in commissions in less than three years.
In March, a Silk Road vendor known as FriendlyChemist told DPR (Ulbricht) through the site’s private message system that he had a list of the real names and addresses of Silk Road vendors and customers, which he obtained by hacking into the computer of another vendor, according to the complaint. FriendlyChemist threatened that he would publish the information on the Internet unless DPR paid him $500,000, which he said he needed to pay off his drug suppliers.
DPR corresponded with a Silk Road user called redandwhite who said he represented the people owed money by FriendlyChemist.
”In my eyes, FriendlyChemist is a liability and I wouldn’t mind if he was executed,” DPR said on March 27, according to the complaint. DPR provided FriendlyChemist’s name and address in White Rock, British Columbia, with ”Wife +3 kids.” DPR later paid $US150,000 to redandwhite to have FriendlyChemist killed, according to the complaint.
Canadian law enforcement authorities told the FBI they had no record of any Canadian resident with the name DPR passed on to redandwhite nor any record of a homicide in White Rock at the time. Ulbricht wasn’t charged in the alleged murder-for-hire scheme.
Ulbricht is charged with narcotics-trafficking conspiracy, computer-hacking conspiracy and money-laundering conspiracy. If convicted he faces as long as life in prison. He made an initial appearance in a five-minute proceeding today in federal court in San Francisco. Ulbricht said he can’t afford an attorney and was assigned a federal public defender. He remains in custody.
Bloomberg, San Francisco Chronicle