January 14, 2015 11:46 pm
An undercover agent told a court on Wednesday that within a few minutes of watching Ross Ulbricht enter a California library, the moniker of Dread Pirate Roberts — the alleged mastermind of an online marketplace for illegal drugs called Silk Road — flashed to life on his computer screen.
Posing as one of the support staff members of Silk Road, the agent sent a private internet message asking Dread Pirate Roberts, or DPR, to “check out one of the flagged” messages on a forum tied to the website.
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When DPR replied “OK which post?” signalling he had logged in, agents with the Federal Bureau of Investigation, already inside the Glen Park library, approached Mr Ulbricht and arrested him, the New York court heard.
We were “trying to get him online as Dread Pirate Roberts in the marketplace,” testified Jared Der-Yeghiayan, the special agent with the Department of Homeland Security who had gone undercover. Authorities, working on a lead they had gleaned a few weeks earlier, say they matched Mr Ulbricht, a 30-year old living in San Francisco, to DPR, the mastermind they had been tracking quietly for nearly two years.
Prosecutors with the US attorney’s office in Manhattanhave charged Mr Ulbricht with operating a global marketplace where heroin, hacking services and fake passports were sold. Prosecutors allege that more than $200m of illegal goods were sold using an anonymous web browser and Bitcoin, an untraceable virtual currency.
Mr Ulbricht’s lawyer has conceded that Mr Ulbricht created Silk Road as an “economic experiment” but said he had relinquished control to unnamed others who acted as DPR. Mr Ulbricht became the “fall guy” once DPR learned authorities were closing in, the lawyer said on Tuesday. He will begin questioning Mr Der-Yeghiayan on Thursday.
Profile: Ross Ulbricht
Philanthropist or criminal?
A geeky tech entrepreneur and philanthropist — or the criminal mastermind behind a multimillion-dollar online drug trading operation? These are the two contrasting versions being presented of Ross Ulbricht, the 30-year-old who has been accused of creating and running the Silk Road online marketplace, whose trial began in New York this week. At the opening of the trial on Tuesday, Mr Ulbricht’s defence lawyer Joshua Dratel said that while his client had created the Silk Road website as an “economic experiment”, he then turned it over to an anonymous individual known only as “Dread Pirate Roberts” who ran the illegal site.
Mr Der-Yeghiayan was the government’s first witness in the closely watched criminal trial. He described a two-year investigation that began in late 2011 with suspicious drug-filled envelopes seized at O’Hare International Airport in Chicago and led them through a “dark” marketplace to the San Francisco area that afternoon in October 2013.
Mr Der-Yeghiayan testified that he took over several accounts on Silk Road as the result of interviews or arrests of users, including one in late July 2013 under the name Cirrus. As Cirrus, the agent became a support employee for the website and was paid $1,000 a week in Bitcoins for monitoring chat forums. He testified that he reported to DPR.
Prosecutors showed online postings to attempt to prove that DPR was in control of the website. They showed the jury a January 2012 message where DPR discussed setting new commission rates, drawing the ire of some users on the site, and another where he writes “who knew a softie could lead an international narcotics operation. But yea, I love you guys.”
Still, as late as mid September 2013, nearly two years after the discovery of the envelopes at O’Hare, Mr Der-Yeghiayan had not known the identify of DPR. After receiving a tip from an agent with the Internal Revenue Service working on a drug task force that month, he said Mr Ulbricht “looked like a pretty good match”.
That set in place an arrest plan to track Mr Ulbricht to a public setting where authorities could initiate an online chat with him logged in as DPR. Agents in street clothes swarmed the California neighbourhood laying in wait.
With just 22 per cent battery power left on his laptop, Mr Der-Yeghiayan testified he watched from a bench across the street from the library. Mr Ulbricht, wearing a small shoulder bag, left his home, crossed the street and entered a café that was too crowded, causing him to head to the library.
Within minutes, DPR’s named flashed “available” on Mr Der-Yeghiayan’s laptop screen. After the quick exchange, a signal was given, Mr Ulbricht was arrested and the agents had seized his laptop.
The trial continues.
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