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Silk Road Shut Down, and Dread Pirate Roberts Arrested

He was originally indicted on three counts: narcotics trafficking, computer hacking, and money laundering; but a new and superseding indictment also charges him with conspiracy to commit murder. 

Silk Road was an online marketplace, bringing together buyers and sellers primarily for drugs (narcotics) but also malware (hacking) and using bitcoins for payments (money laundering). The prosecution alleges that nearly a million registered users spent 9.5 million bitcoins (around $1.2 billion at current rates) generating 614,304 bitcoins (nearly $80 million) in commission for the Silk Road.

The charge document for the first indictment provides a brief history of the FBI's infiltration of Silk Road and participation in the market while trying to discover the identity of its owner. He was known on Silk Road as Dread Pirate Roberts (DPR), but also used the alias 'altoid' elsewhere on the internet.

This was ultimately his downfall. Early online 'promotion' for the Silk Road on forums and blogs involved a user named 'altoid'. Agents were able to trace this name to a gmail address registered to Ulbricht. 

At one point Ulbricht posted a query to stackoverflow.com asking for help on 12 lines of code that were generating an error. He briefly, but for too long, used his own name before changing it to the alias 'frosty'. Those 12 lines of code were later found within the source code on the Silk Road.

The court document also notes, in a section titled "DPR's Willingness to Use Violence to Protect His Interests in Silk Road" an episode involving a Canadian Silk Road vendor named 'FriendlyChemist'. This vendor was threatening to disclose the "usernames, ordr amounts, addresses" of thousands of Silk Road users.

DPR allegedly approached another customer, 'redandwhite' and asked him to take care of the problem. Some time later redandwhite communicated, "Your problem has been taken care of. . . . Rest easy though, because he won't be blackmailing anyone again. Ever."

But according to the document, no evidence for a homicide was found. "I have spoken with Canadian law enforcement authorities, who have no record of there being any Canadian resident with the name DPR passed to redeandwhite as the target of the solicited murder-for-hire," writes special agent Christopher Tarbell. "Nor do they have any record of a homicide occurring in White Rock, British Columbia on or about March 31, 2013." DPR is not charged with attempted murder in this indictment.

But he is charged with attempted murder in the superseding indictment. Here a slightly different story is told. In this account, both the target (who is described as the 'Employee' rather than FriendlyChemist) and the assassin (described as 'UC' – an agent in an 'undercover capacity' rather than redandwhite) appear to be FBI agents who had infiltrated Silk Road in what is clearly a sting operation.

"Via the Internet," states the indictment, "the UC transmitted a staged photograph that purported to depict the Employee's dead body. After receiving the photograph, ROSS WILLIAM ULBRICHT, a/k/a 'Dread Pirate Roberts,' a/k/a 'DPR,' stated that "I'm pissed I had to kill him ... but what's done is done."

It seems likely that the two indictments are describing the same event – but this should become clear as the case proceeds.

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