FBI Seizes Online Black Market Bazaar Silk Road, Arrests Ross William Ulbrecht

[MuffyBee]

http://money.cnn.com/2013/10/02/technology/silk-road-shut-down/index.html
FBI shuts down online drug market Silk Road
October 2, 2013



From Wikipedia
Silk Road, the online drug marketplace, is now under FBI control. The agency also arrested Ross William Ulbricht, who they say created it.


NEW YORK (CNNMoney)
The FBI has shut down the online drug bazaar Silk Road -- and arrested the man who they say created it.
According to the sealed complaint filed by the FBI, federal agents arrested Ross William Ulbricht on Tuesday afternoon, charging him with narcotics trafficking, computer hacking and money laundering.
The FBI also seized the Silk Road website, replacing its homepage with a banner noting as much, according to agency spokeswoman Kelly Langmesser.
Since its 2011 inception, Silk Road has been the go-to black market for all sorts of illegal products and services. Its draw? The online marketplace offered an easy way to find goods and services -- and transact the money in secret. The site had 957,079 registered users, according to the FBI.
"Based on my training and experience, Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," FBI Special Agent Christopher Tarbell said in the complaint.
More...

Video at Link

[MuffyBee]

http://www.forbes.com/sites/andygreenberg/2013/10/02/end-of-the-silk-road-fbi-busts-the-webs-biggest-anonymous-drug-black-market/
End Of The Silk Road: FBI Says It's Busted The Web's Biggest Anonymous Drug Black Market
October 2, 2013

After two and a half years running the booming anonymous narcotics bazaar known as the Silk Road, the drug kingpin who called himself the Dread Pirate Roberts has allegedly been unmasked.

On Wednesday, the FBI announced that they arrested 29-year-old Ross William Ulbricht, the Silk Road’s accused administrator, in the Glen Park branch of the San Francisco Public Library at 3:15 Pacific time on Tuesday. Ulbricht has been charged with engaging in a money laundering and narcotics trafficking conspiracy as well as computer hacking. The Department of Justice has seized the website of the Silk Road’s as well as somewhere between $3.5 to 4 million in bitcoins, the cryptographic currency used to buy drugs on the Silk Road.

arlier this summer, the Silk Road’s administrator calling himself by the Dread Pirate Roberts pseudonym gave his first extended interview to Forbes over the same Tor anonymity network that has hosted the Silk Road and its users since the site’s creation in early 2011.

Forbes estimated at the time that the Silk Road was earning between $30 and $45 million in annual revenue. In fact, the number may have been far larger: The criminal complaint against Ulbricht states that the Silk Road turned over $1.2 billion in revenue since its creation, and generated $80 million commissions for its operator or operators.

“This is supposed to be some invisible black market bazaar. We made it visible,” says an FBI spokesperson, who asked not to be named. “When you interviewed [Ulbricht], he said he would never be arrested. But no one is beyond the reach of the FBI. We will find you.”

The FBI hasn’t yet revealed how it managed to track down Ulbricht in spite of his seemingly careful use of encryption and anonymity tools to protect his identity and those of his customers and vendors who visited Silk Road as often as 60,000 times per day. The FBI spokesperson declined to offer details about the investigation, but told me that “basically he made a simple mistake and we were able to identify him.”

One clue mentioned in the criminal complaint against Ulbricht was a package seized from the mail by U.S. Customs and Border Patrol as it crossed the Canadian border, containing nine seemingly counterfeit identification documents, each of which used a different name but featured Ulbricht’s photograph. The address on the package was on 15th street in San Francisco, where police found Ulbricht and matched his face to the one on the fake IDs.

The complaint also mentions security mistakes, including an IP address for a VPN server used by Ulbricht listed in the code on the Silk Road, mentions of time in the Dread Pirate Roberts’ posts on the site that identified his time zone, and postings on the Bitcoin Talk forum under the handle “altoid,” which was tied to Ulbricht’s Gmail address.

In his conversation with me, which took place on July 4th, the Silk Road administrator calling himself the Dread Pirate Roberts espoused Libertarian ideals and claimed that the use of Bitcoin in combination with Tor had stymied law enforcement and “won the State’s War on Drugs.”
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[MuffyBee]

http://www.statesman.com/news/news/local/man-with-austin-ties-charged-with-running-vast-und/nbDm4/
Man with Austin ties charged with running vast underground drugs website
October 2, 2013

NEW YORK — FBI agents found him in the science fiction section of a small branch of the San Francisco public library, chatting online.
The man known as Dread Pirate Roberts — 29-year-old Ross William Ulbricht — was on his personal laptop Tuesday afternoon, authorities said, talking about the vast black market bazaar that is believed to have brokered more than $1 billion in transactions for illegal drugs and services.
When a half-dozen FBI agents burst into the library in a quiet, blue-collar neighborhood, they abruptly ended Ulbricht's conversation with a cooperating witness, pinned the Austin, Texas, native to a floor-to-ceiling window and then took him off to jail, law enforcement and library spokeswomen said.
Ulbricht was later charged in criminal complaints in federal courts in New York and Maryland. He's accused of making millions of dollars operating the secret Silk Road website and of a failed murder-for-hire scheme, all while living anonymously with two roommates whom he paid $1,000 to rent a room in a modest neighborhood.
Federal authorities shut down the website.
Ulbricht has not entered pleas to any of his charges. His federal public defender in San Francisco declined to comment Wednesday. Ulbricht is due back in San Francisco federal court Friday morning to discuss bail and his transfer to New York, where the bulk of the charges have been filed.
He is charged in New York with being the mastermind of Silk Road, where users could browse anonymously through nearly 13,000 listings under categories like "Cannabis," ''Psychedelics" and "Stimulants."
Ulbricht also is charged in Maryland with ordering first the torture, and then the murder, of an employee from an undercover agent. He feared the employee would expose his alias as Dread Pirate Roberts, a fictional character. Court records say he wired the agent $80,000 after he was shown staged photos of the employee's faked torture.
His arrest culminated a two-year-investigation that painstakingly followed a small trail of computer crumbs Ulbricht carelessly left for the FBI to find, according to court documents.
 
Ulbricht first came to the attention of federal agents in 2011 when they figured out he was "altoid," someone who they say was marketing Silk Road on other drug-related websites the FBI was watching. In October 2011, "altoid" posted an advertisement for a computer expert with experience in Bitcoin, an electronic currency, and gave an email address.
From there, investigators began to monitor Ulbricht's online behavior closely, according to the court records. Investigators said Ulbricht was living within 500 feet of a San Francisco Internet cafe on June 3, 2013, when someone "logged into a server used to administer the Silk Road website."
Court documents show investigators slowly connected Ulbricht to Silk Road by monitoring his email and picking up on some slipups, including using his real name to ask a programmers' website a highly technical question about connecting to secret sites like Silk Road.
His final mistake, according to the court papers, was ordering fake identification documents from a Silk Road vendor from Canada. One of the nine documents was a California driver's license with Ulbricht's photograph, birthdate but a different name. The package was intercepted at the border during a routine U.S. Customs search.
On July 26, Homeland Security investigators visited Ulbricht at his San Francisco residence. He "generally refused to answer questions," the agents said.
The investigators left that day without arresting Ulbricht, who holds a bachelor's of science degree in physics from the University of Texas at Dallas and a master's degree from Penn State University.
They returned Tuesday and arrested him at the library. He faces the prospect of life in prison if convicted of all the charges.
The Silk Road website protected users with an encryption technique called "onion routing," which is designed to make it "practically impossible to physically locate the computers hosting or accessing websites on the network," court papers said. One listing for heroin promised buyers "all rock, no powder, vacuum sealed and stealth shipping," and had a community forum below where one person commented, "Quality is superb."
The defendant announced in a website forum in 2012 that to avoid confusion he needed to change his Silk Road username, according to court papers released Wednesday. He wrote, "drum roll please ... my new name is: Dread Pirate Roberts," an apparent reference to a swashbuckling character in "The Princess Bride," the 1987 comedy film based on a novel of the same name.
As of July, there were nearly 1 million registered users of the site from the United States, Germany, Russia, Australia and elsewhere around the globe, the court papers said. The site generated an estimated $1.2 billion since it started in 2011 and collected $80 million by charging 8 to 15 percent commission on each sale, they said.

[MuffyBee]

http://www.npr.org/blogs/alltechconsidered/2013/10/03/228579712/the-man-behind-the-shadowy-illicit-drug-market-silk-road
The Man Behind The Shadowy Illicit Drug Market, Silk Road
October 3, 2013

You can listen to the story (Morning Edition) 3:27 at link

Link to full criminal complaint against Ross William Ulbrect
http://www.scribd.com/doc/172766650/Criminal-Complaint-Against-Alleged-Silk-Road-Proprietor-Ross-William-Ulbricht

[MuffyBee]

http://abcnews.go.com/International/wireStory/british-police-arrest-silk-road-investigation-20503899
British Police Arrest 4 in Silk Road Investigation
LONDON October 8, 2013 (AP)

British police say they have made four arrests as part of the U.S.-led investigation of Silk Road, until recently the Internet's most notorious illegal drug site.

The newly established National Crime Agency said Tuesday that the men were arrested only hours after American officials detained Ross Ulbricht, the site's alleged mastermind, on Oct. 1. Officials promised "many more to come."

Three of the men, identified as being in their 20s, were described as being from the northern English city of Manchester. Another man was described as being in his 50s and from southwestern England.