By Bob Van Voris and Patricia Hurtado, Bloomberg
(Bloomberg) — The founder of the Silk Road website faces life in prison for running an underground Internet emporium that catered to hackers and drug traffickers.
Ross Ulbricht, 30, who used the moniker “Dread Pirate Roberts,” offered people the chance to anonymously buy illegal merchandise and services with bitcoins. On Wednesday, a jury took just three and a half hours to find him guilty on all seven federal charges.
Wearing a navy jacket, blue shirt and tan pants, Ulbricht didn’t have a visible reaction to the verdict. His parents, Lyn and Kirk Ulbricht, both dropped their heads, while some of Ulbricht’s supporters wept.
“Ross is a hero,” a courtroom observer, Derrick Broze of Houston, shouted as U.S. District Judge Katherine Forrest was wrapping up the proceedings.
Ulbricht’s lawyer, Joshua Dratel, said his client will appeal. Dratel said Forrest blocked him from calling witnesses supporting the defense.
Prosecutors claimed Ulbricht ran Silk Road from 2011 to 2013, armed only with a laptop and a Wi-Fi connection. When he was arrested, his computer was filled with evidence showing he conceived the site, ran it and even tried to arrange the murder of five people who threatened the anonymity of buyers and sellers. Prosecutors told jurors that $213 million in bitcoins were used to buy drugs and other illegal items on the site.
Ulbricht faces as long as life in prison when he’s sentenced May 15. One of the counts carries a mandatory 20-year minimum.
Dark Web
“The supposed anonymity of the dark web is not a protective shield from arrest and prosecution,” Manhattan U.S. Attorney Preet Bharara said in a statement after the verdict.
Ulbricht claimed he was set up as a “fall guy” by Mark Karpeles, the former head of the bankrupt Mt. Gox Co. bitcoin exchange, or by someone else who was the real Dread Pirate Roberts. A six-man, six-woman jury in Manhattan federal court rejected Ulbricht’s claim that he only ran Silk Road for a few months.
Charges against Ulbricht included trafficking drugs on the Internet, narcotics-trafficking conspiracy, running a continuing criminal enterprise, computer-hacking conspiracy and money-laundering conspiracy.
At the start of the trial on Jan. 13, Dratel told the jurors that his client started Silk Road as an “economic experiment,” then passed it to someone else after a few months.
Ulbricht’s online name was taken from a character in the 1987 film “The Princess Bride,” prosecutors said.
Texas Native
The Texas native was arrested in a San Francisco public library on Oct. 1, 2013, “caught red-handed” after logging onto his computer as “Dread Pirate Roberts,” prosecutors said.
Federal agents seized Silk Road, along with bitcoins worth $3.6 million, and shut down the site.
The agents testified they found on Ulbricht’s computer online chat transcripts, Silk Road maintenance logs, to-do lists, weekly reports, accounting entries and a computer journal detailing the beginnings and growth of Silk Road. The government also found more than $13 million in bitcoins, most of which they traced back to Silk Road.
PreTrial Ruling
In a key pretrial ruling, Forrest in October rejected Ulbricht’s request to bar electronic evidence seized from the laptop, his Gmail and Facebook accounts, and a Silk Road computer server in Iceland. Forrest ruled that because Ulbricht didn’t claim any personal connection to the material, he lacked the ability to complain that police had seized it illegally.
During the trial, Forrest blocked Dratel from presenting an expert in computer-based currencies and another in cybersecurity, saying he’d failed to give prosecutors the required time to prepare.
Outside court Wednesday, Ulbricht’s parents blamed the judge for the verdict, saying they were “outraged.”
“I think it would have been a very different outcome if the jury had been permitted to hear all the evidence,” Lyn Ulbricht said.
The jurors heard evidence that Ulbricht paid $150,000 to someone claiming to be a member of the Hells Angels motorcycle gang to kill a Silk Road user who called himself FriendlyChemist. The government claimed FriendlyChemist sought to extort Ulbricht by threatening to publish a list of names and addresses of Silk Road sellers and buyers unless he was paid $500,000.
Ulbricht didn’t face murder solicitation charges in the trial and prosecutors said they don’t believe any murders were carried out. Forrest said the government could use the evidence to show Ulbricht’s connection to Silk Road.
Ulbricht faces one murder solicitation charge in Baltimore.-BLOOMBERG
