Federal Prosecutors Charge Alleged Proprietor of Online Marketplace for Illegal Drugs

The United States Attorney’s Office has filed a sealed indictment against a man that they are accusing of operating “Silk Road,” described as an anonymous online marketplace where people can buy and sell illegal drugs. United States v. Ulbricht, No. 13 MAG 2328, sealed complaint (S.D.N.Y., Sep. 27, 2013). The charges include computer fraud, money laundering, and conspiracy to to violate federal drug laws. The case is notable because of the high levels of cybersecurity and anonymity associated with Silk Road, as well as the fact that most of the funds seized by the government were in the form of Bitcoins, an internet-based currency. Many users of the service reportedly view the system as impregnable by law enforcement, leading to some discussion of how far law enforcement may go to infiltrate online communities, and how much online anonymity might be too much.

Silk Road was reportedly a website that enabled the sale and purchase of illegal drugs like methamphetamine, cocaine, and heroin. The site used Tor, a global computing network that masks the identity of users by routing data all over the world, making it nearly impossible to trace. Tor also enables website operators to hide the identity and location of their sites. All transactions through the Silk Road site used Bitcoins, an online currency that is also very difficult to trace. The FBI alleges that Silk Road generated revenue of more than $1.2 billion, yielding commissions of about $80 million for the defendant, who operated the site under the pseudonym “Dread Pirate Roberts.”

The complaint, which was filed under seal and recently made available to the public, was based largely on an investigation conducted by the FBI’s cybercrime division. It asserts three counts against the defendant: conspiracy to traffic narcotics, 21 U.S.C. § 846; computer hacking conspiracy, 18 U.S.C. § 1030; and conspiracy to commit money laundering, 18 U.S.C. § 1956.

The Silk Road case has brought attention to the “dark web,” the parts of the internet that users can only access through the Tor network. Some users of the dark web might simply place a high value on privacy, but others may use it for illegal activity. Tor allows website administrators to hide their sites from Google and other services that “crawl” the web in order to index websites. Users can only reach sites on the dark web if they use the Tor network and know the exact address of the site. The high level of security offered by Tor has led to some concern regarding how law enforcement made their case against Silk Road, but the FBI may have simply engaged in traditional police work using modern technology. The complaint states that officers bought drugs through Silk Road at least one hundred times. Errors by the Dread Pirate Roberts, who reportedly accessed the Silk Road server without using Tor sometimes, might have given the FBI the information it needed to catch him. The case offers a glimpse into an interesting future for the investigation and prosecution of cybercrime.

A person facing charges for an alleged criminal offense should consult an experienced criminal defense attorney, who can help them understand their rights, guide them through the process, and work to ensure that police, prosecutors, and courts respect their Constitutional and procedural rights. Criminal defense attorney Michael J. Brown has represented defendants in west Texas defendants for over twenty years. Contact us today online or at (432) 687-5157 to schedule a confidential consultation to discuss your case.

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