So, how did the authorities caught the people behind Silkroad and Silkroad 2.0? In this article, we are going to explore that question.
Before we address the main question, it’s best that we cover a few important details. Otherwise, you could end up backtracking on some information you might need to get grasp the entire picture.
At its core, the Silkroad was basically just like any other online store. However, what mainstream online stores can’t do is sell illicit merchandise or services.
There are basically two major problems when selling or purchasing items online. Let’s tackle the first one.
The first problem is identity. The mainstream internet is being monitored by the authorities. Everyone knows this. Hence, selling or purchasing illegal items may prove to be tough. Then, the solution came.
At some point, the Tor network was invented. The exact mechanism how the Tor network system works is beyond this article.
Yes, it can be very complex. For now, let’s just say that Tor can help you surf a special network, which is known as the Dark Web, anonymously.
With anonymity, you can free yourself from the worry of someone monitoring your surfing history. But here’s the second problem.
Money trail! Whenever you do a transaction, there’s always a money trail. This is particularly the case with digital money that came from the bank.
Even if you are anonymous when you purchase something illicit, the money can be traced back to you. That means that you could end up with a new cellmate. Then, the breakthrough came along.
Bitcoins! Bitcoins was the last piece of the puzzle that allowed Silkroad 1 and 2 to flourish.
Bitcoin is a form of online currency that allows anonymous currency transaction. After these two issues were solved, Silkroad was born, and the rest is history.
Now the question is – if the Tor network and Bitcoin currency provided the security by being anonymous, how did the Silkroad founder get busted?
Silkroad and Silkroad 2.0 Bust
First of all, nothing in this world is completely secure. Even the most secure network in the planet can be hacked.
It’s just a matter of allocating enough time and resources. Once we have that on the table, we can tackle the question a bit further.
The man behind the Silkroad was Ross Ulbricht a.k.a. “Dread Pirate Roberts” (DPR). He was the genius or the mastermind (depending on how you look at it) that married the idea of anonymous surfing and anonymous currency, thus creating an anonymous marketplace.
With Silkroad, one can actually sell anything. It’s just that the site was popularly used as a marketplace for illegal merchandise.
The idea of an anonymous currency and an anonymous network may be impressive, but the real reason Ross Ulbricht got busted was the plain old human error.
Months before Silkroad got popular, Ross Ulbricht was trying to spread the news of his new site; which was Silkroad. He did it by visiting forums sites.
In the forum posts, he left his email so anyone can contact him if anyone is interested. Here’s the thing – he publicly left an email with his name on it! This was the initial scent that the authorities followed, which eventually led to the fall of Silkroad 1. Now, how about Silkroad 2?
Silkroad 2.0 officially went up a month later after the shutdown of the original Silkroad. The man supposedly running Silkroad 2.0was Blake Benthall, also known as “Defcon.” Here’s the thing – someone obviously didn’t learn their lesson.
When Silk Road 2.0 went up, the site can be traced to an anonymous server. In the server details, the authorities found out that the server was registered to a [email protected]! From then on, it’s Silk Road 1 all over again.
There is no such thing as a 100% secure network on this planet. Even if you can create something that is truly secure, which is close to impossible, you still need humans to access it.
And that is the biggest security hole – human error. Just like Silk Road 1 and 2. Everyone thought that it would be a supercomputer doing complicated stuff to crack the site’s security.
When in fact, it’s actually a human error, like leaving an email unintentionally that will cause the first domino to fall down.
Ross thought of himself as a libertarian, believed in personal freedom to do as each one pleased with minimal interference from others.
Therefore, his supporters saw him as a hero who attempted to tame a truly rough and unruly trade.
The Silkroad founder Ross Ulbricht admitted in the courtroom of the “little things” he missed from behind bars, like throwing a Frisbee to a dog in the park and Thanksgiving dinner with his family.
During an interview, the Silkroad creator stated that despite his present circumstances, he was thankful to his family, friends, and supporters.
Those who chose to believe in him. He said that they were a source of encouragement to him and words simply cannot describe that feeling of in-depth gratitude that he felt.
In 2013, Ross Ulbricht, the founder of Silkroad, noted that the other thing that he was truly grateful for was that finally after one and a half months in the Special Housing Unit, (SHU), he was now in the general inmate population with other inmates.
The SHU was specially designed to isolate and punish the most chronic and dangerous of prisoners. It was a grim jail with maximum security.
The Silkroad founder was released from the SHU a day to his bail hearing.
Actually, his lawyer argued that Ross was non-violent and his confinement in the maximum security facility was not a necessity.
Now Ross was grateful that he could breathe fresh air, look out of a window, interact with people and even play a game of chess.
Isolated as he was from the outside, the numerous letters and messages the Silkroad creator got from his supporters gave him hope.
Those who advocated for his release and stood up for freedom were his source of encouragement. The Silkroad founder actually said that prison wasn’t as bad as he had fathomed.
One inmate actually gave him a piece of soap, another lent him a book to read and ward off the boredom and nostalgic feeling.
The Silkroad creator said that the inmates were given a treat of chicken and cranberry source on Thanksgiving, just to make the day festive for them, too.
The Silkroad founder Ulbricht shared that, just like life on the outside, there were acts of kindness and compassion in the prison, amidst the periodical harshness and power trips.
Ulbricht said he was grateful and that he would not blame anyone for his choices in life. The founder of the Silkroad was also grateful that now he could talk to his visitors over a table and not through a plexiglass like before.
Life had taught him to be grateful for the little things he once took for granted when he was a freeman. He said the things we take for granted matter a great deal in prison.
The Silkroad creator sends his “thank you” message to his family, friends, and supporters who have given and dedicated their time, resources, and love which meant the world to him, even from behind bars.
It is important to note that ZCoin is not affiliated in any way with Zcash, which also adopts the Zero-Knowledge technology on its network.
Other notable users of the Zero-Knowledge technology include the Komodo Project.
ZCoin Pledges $25,000 To the Silkroad Founder’s Cause
Le and Insom are known avid supporters of what the Silkroad founder, Ross Ulbricht, represented.
They firmly believe in liberty and free market enterprise and hold on to their strong opinions concerning the unfair trial of the Silkroad founder.
According to the ZCoin founders, Ulbricht’s Silkroad was a herald to the era of free commerce and promoted individual liberty.
Therefore,it comes as no surprise that ZCoin has officially pledged to commit to donate 100 ZCoins every month for the next four years to support the Silkroad founder’s cause and also to finance his latest appeal.
They made the statement on their blog and mentioned that the donations to the various charities supporting Ulbricht’s cause would facilitate the Silkroad creator’s quest for freedom via an appeal.
They also went ahead to do a quick calculation of the accumulative amount of ZCoins, their donations would garner over the course of four years based on its current exchange rate ($25,000).
The donations received by the Ross Ulbricht charities look to cover any legal expenses including the cost of funding his lawyers as they embark on the appeal.
“The war on drugs is a complete failure” – ZCoin Founders
Le and Insom feel strongly about the war in history, especially as the government paints it, and were not afraid to term it “a complete failure” on the government’s part.
In their opinion, the government has turned the war on drugs into a business venture, funded mostly by the asset seizure policy that allows drugs, money and other assets obtained in a raid to be stolen by government “bandits.”
They believe that Ulbricht’s Silkroad was the first to try and curb the government’s exploits using technology to beat the system and keep Ulbricht and various Silkroad traders away from the government’s sights.
The ZCoin founders believe that if it were not the government’s self-serving motives, Ulbricht would not only have been exempted from such a strict sentencing, he would also not have been sent to prison at all.
Silkroad created a peaceful environment where consenting individuals of age could conduct various trades, according to the two ZCoin founders.
Life imprisonment without parole for the Silkroad founder was unwarranted and a punishment that was generally deemed excessive, especially considering the fact that drug offenders rarely get slapped with sentences that harsh.
ZCoin’s Quest for an Ideal World in the Wake of Silkroad
The ZCoin founders believe that their creation continues what Silkroad had started before being abruptly dismantled by the government three years ago.
They believe that by combining the innovativeness of the Bitcoin protocol with the privacy-centric Zero-Knowledge technology, they will eventually achieve total non-interference from governments and other authorities that impact on individuals’ competitive processes.
The ultimate goal, according to the blog post on their website, is to create individual liberty, a free market and, most importantly, bring peace to the world.
New trends in Technology industry are like daily events, because of the high number and quality of people working in this domain, innovation is almost a routine task – while doing the impossible or unthinkable is a near-future target.
Every now and then, the “regular” population adopts one of the new trends in the business, moving it from a curiosity to a world-changing idea.
In 2008, the most widely-accepted technological breakthrough was the Bitcoin. However, one of the biggest pieces of regarding the Bitcoin connected the currency to Silkroad – a famous online black market.
ANNOUNCEMENT: Silk Road 3.0 is BACK ONLINE and open for business. The team did a massive security overhaul on the site to try and make it more secure and anonymous.
After the appearance of the Bitcoin, people have often wondered why a cryptocurrency took so long to appear in our lives.
The idea behind the Bitcoin is simple, it is a transfer of authority and a virtual currency which you can use to pay anything and everything online.
Although the idea went exceptionally well on paper, thereality was a bit slower to react.
Even in 2015, the number of merchants accepting payments in Bitcoins just passed the 100,000 mark – not enough to be called a full-fledged “revolution.”
The U.S. Government and security agencies didn’t give the currency lots of attention at the beginning either, but that all changed in 2011 when they targeted the above-mentioned Silkroad.
Since the currency was more-or-less completely anonymous and impossible to track, it quickly became the preferred way to pay for certain goods or services which were illicit.
This paired exceptionally well with the now-defunct website, the Silkroad.
It was owned by an individual called Ross William Ulbricht, which was a standard online marketplace – except for the fact that the goods that were traded in Silkroad were highly illicit.
Silkroad made a small fortune functioning as an online black market for drugs – but Ross Ulbricht quickly caught the attention of the authorities.
The founder of Silkroad was arrested in October 2013 and was charged with several accusations – ranging from drug trafficking to money laundering conspiracies.
Basically, he was charged to have conspired with every illicit dealing that took place on the Silkroad.
The FBI took the entire scene one step further, and at the end of that month, made its biggest Bitcoin confiscation in history, from various members of the Silkroad.
The FBI seized just over 144,000 Bitcoins, an amount equivalent to roughly $28 million.
Along with this operation, the U.S. authorities also shut down Silkroad and sentenced Ross Ulbricht to no less than life in jail.
The size of the undertaking was the impressive part of the story, along with bringing the Silkroad to nationwide public’s attention.
It’s not an everyday occurrence you see a government take hold of $30 million in Bitcoins, especially for online transactions involving websites like Silkroad.
The size of the action also showed the world the downsides of having a currency such as the Bitcoin: having it used to its fullest for wrongdoings.
Since Bitcoin transactions are hard to track, especially when using anonymity tools like Tor, they are the perfect method of committing online frauds or crimes.
While Silkroad was closed, there is no exact quantity of how many of these websites functions in the U.S. alone, not to mention worldwide, where information security isn’t treated as seriously as in the United States.
Ross Ulbricht’s trial was relatively short and easy. His only defense was that while he had indeed found Silkroad, he gave up its administration to other people – a fact which was quickly proven false by prosecutors.
He was quickly sentenced to life in prison and was turned into one of the most famous examples of 21st-century criminals.
Silkroad was quickly shut down after his conviction, proving that he was indeed one of the main players on the website.
Smart, using technology to his advantage and always on top of his game, Ross Ulbricht has been a great example of what can happen when crimes update themselves to get in line with 21st-century technology.
To sum up, the 28th of October will be remembered as the day in which the largest-ever Bitcoin confiscation was made.
This confiscation marked the end of the Silkroad and a lifetime conviction of its owner, founder, and administrator, Ross Ulbricht.
Privacy and power are great additions to everyday life for normal people, but if they fall into the wrong hands, we all know what they’re capable of.
The IMB was taken down through a joint international police operation.
The two key members of the organization, Filip Simion, and Leonardo Cristea were arrested by the police back in May 2016 during simultaneous early morning raids in Bucharest, Romania.
Filip and Leonardo are two among the six members of the Italian Mafia Brussels who have been arrested this year.
This collaboration between the Federal Bureau of Investigation and Europol was carried out in the United States, France, Belgium, and Romania.
The operation also led to the arrest of Ymran Djavatkhanov and Andy Nestor, who were suspected to be members of the illegal dark net organization and have been named in the US indictment.
Filip Simon and Leonardo Cristea are currently awaiting trial in the United States.
They will be tried for money laundering and illegal importation of controlled substances.
If they are indeed found guilty, they may face a maximum sentence of 20 years.
On the other hand, Ymran Djavatkhanov and Andy Nestor will be tried in Belgium because the US is not going to pursue their extradition.
The IMB operated storefronts on several dark web platforms including the Silkroad and Silkroad 2.0 where bitcoin was the means of payment.
To avoid online surveillance, they employed some encrypted communication services such as WhatsApp, RedPhone, and Signal while using marketplaces on the Tor network.
According to the US Department of Justice, the investigation of the Italian Mafia Brussels and its relationship to Silkroad began in 2013 after a package containing MDMA was caught by the authorities.
The package was bound for Colorado from Belgium and contained more than 60 grams of MDMA.
The recipient of the package stated that they had bought the drugs from Italian Mafia Brussels.
A number of businesses also complained about receiving returned packages from the United States.
The businesses claimed that they had not sent the said packages.
The IMB operated by sending packages to their Silkroad and Silkroad 2.0 customers mostly in the United States and Canada.
These packages were made to look like they were sent from legal businesses.
The organization carefully chose businesses that dealt with products that were somewhat similar to the drugs.
From February to September 2014, the authorities in Belgium confiscated a number of packages from the organization.
These packages contained invoices similar to those of a legitimate company.
The investigations following these discoveries including the Silkroad investigations were vital in the tracking and subsequent arrest of Fillip Simion and his fellow group members.
Simion was tracked physically by the Romanian Federal Police and the Belgian Federal Judicial Police.
The information was uncovered in 2013 and 2014 after Silkroad and Silkroad 2.0 were shut down; this incident also shed light on the operations of IMB.
The recent spate of arrests and convictions related to the Silkroad and Silkroad 2.0 dark net markets can largely be attributed to the cooperation between international law enforcement agencies.
While these arrests are taking place, Silkroad and Silkroad 2.0 became defunct, and this is a great step against illegal underground operations, but they have done little to stop the online drug dealing operations.
According to recent surveys, dark net markets have steadily increased their customer base despite the revamped crackdown on illegal platforms by law enforcement agencies.
Due to the convenience of the dark net markets such as Silkroad, more people are using these platforms to gain access to drugs and other illegal products or services.
Prosecutors on the Silkroad case where 32-year-old Ross William Ulbricht was sentenced to life in prison were questioned on the fairness of the judgment in a Manhattan federal appeals court on October 6.
Ulbricht was convicted for being the brains behind the dark web site Silkroad, which was best known for facilitating the sale of illicit drugs.
ANNOUNCEMENT: Silk Road 3.0 is BACK ONLINE and open for business. The team did a massive security overhaul on the site to try and make it more secure and anonymous.
In the oral arguments presided by three US Second Circuit Court of Appeals judges, numerous questions were posed concerning the even-handedness of the ruling, which was doled out by US District Judge Katherine Forrest in 2015.
One of the members of the three-judge panel presiding over the oral arguments, Judge Christopher Droney, openly challenged the sentencing as he pointed out that it was bizarre for a middle-aged man with no prior criminal records and no direct ties to any drug trafficking activities to get slapped with such a hefty sentence.
His colleague, Jude Gerard Lynch suspected that testimonies from the parents of two Silkroad buyers who died from overdosing at the 2015 trial could have had a heavy emotional impact on the case and might have influenced the over-the-top sentencing.
According to Lynch, the testimonies in the 2015 trial of the Silkroad creator put an extraordinary thumb on the scales against Ulbricht. The judge added on to call the sentence “quite a leap.”
Promising Innovator with Misplaced Priorities
The 32-year-old Californian resident was arrested following the seizure of the dark web drug market by the authorities.In its 2-year operation, Silkroad had made over $200 million in sales using the encrypted digital currency, bitcoin.
In its 2-year operation, Silkroad had made over $200 million in sales using the encrypted digital currency, bitcoin.
Ross Ulbricht was accused of masterminding the Silkroad operation from which he amassed $18 million.
Supporters of the Silkroad mastermind painted Ulbricht as a young, insightful innovator who had been led astray by his youth.
His defense lawyer Josh Dratel called on the three-judge panel to view the extreme ruling for what it really was.
He called the life sentencing of the Silkroad mastermind unreasonable basing his remark on the fact that even murderers got a maximum of 20 years in prison.
Dratel went on to paint Ulbricht as the landlord of Silkroad who had no direct links to the activities that took place therein.
“No Ordinary Kingpin” – Prosecutor Eun Young Choi
Ross Ulbricht had been accused of hiring alleged assassins to get rid of enemies that threatened the continuity of Silkroad.
The three-judge panel saw this as more than just passive involvement and part of the reason why Ulbricht was tried as more than just the “landlord” of Silkroad.
Although none of the assassinations were carried out, prosecutor Eun Young Choi considered this a threat of violence that would have landed Ulbricht for life in prison even without the overdose deaths.
The prosecutor termed it unprecedented and went ahead to paint the Silkroad mastermind as an unusual kingpin.
Ulbricht’s defense has also been trying to use the case of two federal agents who were convicted of bitcoin theft during the Silkroad investigation, as a pivot to overturn his conviction.
As things stand, there are no clear indications of when will be the judges’ ruling.
While a number of the references have been positive, the large majority have always painted a very negative picture of these platforms even though they are not always involved in illegal activity.
The Silkroad, however, cannot be given the benefit of the doubt. It is well known to have been complacent in criminal activity with Ross Ulbricht currently facing life in prison.
American Greed’s Verdict on Silkroad
The American Greed show can be complimented for taking a somewhat different and unscripted direction in its exposé’s.
It highlights key events or operations through the accounts of witnesses and expert opinions.
This approach enables the show to document current and past events that shed light on the dark sides of American capitalism including Silkroad that corporate media fails to cover.
According to the show, Silkroad was founded mainly to provide a secure and anonymous means for sellers and buyers to transact illegal goods and services online through the Tor network.
The Silkroad marketplace operated only through Bitcoins, the cryptocurrency that facilitates anonymous online trade in darknet markets.
Dread Pirate Roberts controlled nearly every aspect of the Silkroad marketplace.
Apparently, he acquired the computer infrastructure needed to set up the marketplace, maintained the official website and also set customer and vendor policies. Some of these policies included what could be sold on the Silkroad.
Ross Ulbricht was arrested in October 2013 by the FBI where he was accused of being Dread Pirate Roberts. The Silkroad website was then seized and taken down.
At the time, Dread Pirate Robert’s wealth was estimated to be millions of dollars in bitcoins.
Ulbricht is now facing a life sentence without the possibility of parole. He was found guilty on several counts including conspiracy to distribute narcotics, conspiracy to commit computer hacking, and money laundering.
Points of Contention
While Silkroad is definitely villainous from the law’s perspective, it does not exactly fit the profile of American Greed’s show.
The show usually focuses on the aspects of people or entities stealing money, something that DPR is not guilty of.
In fact, the instances of theft related to this case occurred against Silkroad itself, something the show failed to dwell on but should have.
It could be because of the fact that Carl Force, the person responsible for siphoning bitcoins from the Silkroad marketplace happens to be a former DEA agent.
Nonetheless, it was an informative alternative account and is bound to generate interesting comments in days to come.
It is definitely recommendable to any open-minded person seeking to know more about this underground online crime platform.
Other than being the first arrest of a Silkroad drug dealer since its launch in 2011, this particular case stood out for a number of reasons, some of which were baffling, to say the least.
Silkroad was eventually shut down in 2013 after three rocky years of operation and a bunch of significant arrests.
According to details that were revealed during the trial, the Australian Customs and Border Protection Services had begun to intercept packages addressed to Howard and his wife’s home address.
In total, 12 mail packages which contained MDMA (better known as ecstasy or simply “e”) were seized by the authorities.
A level of ingenuity had been used to package the drugs as they were cleverly hidden in paraphernalia such as lighters, DVD players, and cards.
Curiously enough, the Silkroad vendor did not notice the thinning inflow of drugs since he kept placing more and more orders on Silkroad as later revealed during the trial.
It was not until the authorities had intercepted a total of 46.9 grams of MDMA that they decided to take the next course of action.
The Australian Federal Police (AFP) had enough to warrant a sweep of Howard’s home in Brunswick.
In what was the first and very successful drug raid of a Silkroad dealer’s house, the AFP managed to dig up an additional 50 grams of MDMA, 14.5 grams of cocaine and a whopping 989 grams of cannabis.
The drugs were in various stages of packaging as the police stumbled upon several zip-loc bags and scales at the scene.
Some of the drugs had already been packaged into sealed envelopes waiting for shipment.
The police then went on to perform a sweep of his vehicle where they unearthed what appeared to be innocuous sugar cubes that contained a substance which was unidentifiable at the time.
It was only after Howard’s sentencing that substance was identified as LSD. He was not charged with the possession of the drug.
The icing on the cake for the AFP was when they stumbled onto some very incriminating evidence on Howard’s phone and computers.
In addition to 148 text messages on his phone which irrevocably bound him to various drug trading activities and had numerous references to Silkroad, the police also found a number of pictures in his computers in which he could be seen handling the drugs.
In what many consider to be a humorous turn of events, his vehicle was also used as evidence against him owing to the fact that his license plate number was the same as his Silkroad moniker, “shadh1.”
Open and Shut Case
The prosecution had a field day cross-examining thousands of incriminating text messages dug up from the Silkroad vendor’s phone, some of which contained explicit information concerning his operations on Silkroad and the volume of drugs he had in possession.
Howard had little choice but to cooperate in the hopes of getting a more lenient sentencing.
He aided the police to search his computer where they managed to dig up a message Howard had posted on Silkroad when he began his illegal dealings.
In a nutshell, the message was a simple bio of who he was and what he did write in a very affable tone.
In addition to importing more than the required marketable quantity of border-controlled drugs into the country, Howard also pleaded guilty to charges of drug trafficking and the possession of over 30 controlled weapons.
Carl M. Force and Shaun W. Bridges, former federal agents, were charged with money laundering, fraud and related offenses for stealing bitcoins during their investigations into the underground black market Silkroad.
Forty-six-year-old Force, who hails from Baltimore, was working with the DEA as a Special Agent and thirty-two-year-old Bridges from Laurel, Maryland, was working with the Secret Service as a Special Agent when they were both included in the Baltimore Silkroad Task Force for investigating the illegal activities being carried out by the darknet marketplace.
While the charges leveled against Force include stealing of government property, fraud, conflict of interest and money laundering, charges leveled against Bridges are money laundering and wire fraud.
ANNOUNCEMENT: Silk Road 3.0 is BACK ONLINE and open for business. The team did a massive security overhaul on the site to try and make it more secure and anonymous.
By October 2013, Force had been with the task force team, investigating the Silkroad, for a couple of years. During the time he carefully involved in a number of lucrative bitcoin side projects.
One of his projects was ripping off the Silkroad founder, who operated under the pseudonym “Dread Pirate Roberts,” of bitcoins.
Force had by then extorted as much as 1,200 bitcoins from the Silkroad founder and opened an account with the Slovenia-based bitcoin exchange Bitstamp to turn the digital currency into cash. This action seems to have sealed his fate.
Force used his undercover name, Eladio Guzman Fuentes, he commonly assumed during investigations as a DEA agent and produced a driver’s license, Social Security card and proof of residence, all connected to the name to open the account.
His documents were passed on to George Frost, Bitstamp’s general counsel, who found out that they were all forged documents.
When Frost confronted Force, he showed his real ID, his badge, and a Baltimore water bill. Though Frost allowed Force to set up an account, he did not feel comfortable with it.
In November, Force made two large withdrawals from Bitstamp, worth $34,000 and $96,000 in bitcoins into his bank account. Suspicious Frost contacted FinCEN.
The officer he talked to at FinCEN was Shaun Bridges, who told him that the case would be referred to the Public Integrity Section of the Department of Justice.
However, nothing happened. Force kept on transferring his bitcoin assets and even cleared his mortgage payment in full in December 2013.
Six months after the Silkroad founder was arrested, Force withdrew a large sum of $80,000 from Bitstamp in April 2014. Bitstamp employees observed that the IP addresses of Force were connected to Tor.
When asked about this, Force said that he used Tor for the purpose of privacy. In the last week of April 2014, when Force tried to withdraw $200,000 in bitcoins, Frost decided to freeze his account.
Frost then scheduled a meeting with Kathryn Haun, as assistant US attorney in San Francisco. She was the first cryptocurrency coordinator of the Department of Justice.
The meeting was also attended by Tigran Gambaryan, a special agent with IRS. Frost then told them about Force.
Gambaryan, who was aware of the tension between Silkroad investigation teams in New York and Baltimore, sensed that there was something more to the story than just rivalry between the agencies.
However, Haun and Gambaryan were not sure as to whether they should investigate Force’s behavior at all. But then, what made an investigation inevitable was Force’s subsequent action.
He contacted Bitstamp customer service and requested that all his transaction history be deleted.
While Gambaryan wanted to pull out Force’s financial records as well as the latter’s bitcoin activity and match them with transaction records that were already there in the Silkroad database under the government’s custody, Haun started her investigations from Shaun Bridges.
They had a conversation with Bridges through phone on May 6, 2014. His behavior set off alarm bells, and they decided to take Force’s case forward without Bridges’ help.
Gambaryan found out that Force used his undercover account Nob to get Ulbricht’s attention. He told the founder of Silkroad that he was interested in purchasing the website.
Ulbricht quoted $1 billion for the Silkroad site. After a few months, Force informed him that it was not cost-effective for him to do business in quantities below ten kilos.
The Silkroad founder wrote back to him saying that one of his staff would get back to him with the details of a buyer who can deal in large quantities. The buyer was Curtis Green, a Silkroad staffer.
He operated under the name “Flush” and was in charge of Silkroad Forums.
Green signed for a package containing 1 kg of cocaine that Force had arranged to be sent to him. When Green delivered the package to Force, he was arrested by a dozen of agents.
Green did a short stint in jail for cocaine possession, but he was brought out on bail and was questioned by the agents Force and Bridges for about 12 hours.
They asked him to spill out everything he knew about Silkroad, which he did. He even told them the password to his Silkroad account.
Later in the day, huge amounts of bitcoins were transferred to a Number13 account. Sellers on Silkroad also started losing bitcoins from their Silkroad accounts.
By the time the Silkroad founder realized this, as much as 20,000 bitcoins had disappeared.
Ulbricht thought Green was behind this and wanted to teach him a lesson. He turned to “Nob” for help, who was only too keen to oblige.
Initially, the Silkroad founder wanted Green to be beaten up but later on said that he should be executed. Nob demanded $80,000 for the job.
Green staged his own death and Nob got the payment. Force promptly handed over the money to the government.
However, Force had other ideas for getting money from the creator of Silkroad. He sent a message from his new account “Death From Above” to Ulbricht, saying that he was aware of the latter’s involvement in Green’s death. His aim was to get $250,000 from the creator of Silkroad.
Gambaryan found out that “Death From Above” is Force’s another account only because he had left a video footage of himself typing from the same account. Force’s extortion attempt failed as the Silkroad founder refused to pay him. Force then, acting as Nob, got Ross Ulbricht to pay him 400 bitcoins for counterintelligence information from a Justice Department employee Kevin.
Two months later, the Silkroad creator spent another 525 bitcoins. Force mentioned about the first payment in his report to superiors, but not about the second payment. However, a mistake committed by Ross helped Gambaryan to find out that the second payment went to Force’s another bitcoin wallet.
Force created another Silkroad account in the name of “French Maid,” offering information on the government’s investigation into Silkroad for $100,000 in bitcoins. The creator of Silkroad paid once again, and the money went into a personal account of Force.
Haun held a “proffer” session for Force along with Gambaryan. Force admitted to working as “Nob” and taking off bitcoins of the government. However, he acted as though he did it out of a big misunderstanding.
During the session, he also informed that he did not know anything about the accounts “French Maid” and “Death From Above.”
Gambaryan went through the vast Silkroad database once again and confirmed that Force was both “Death from Above” and “French Maid” from the particular version of PGP that he had in his e-mail signatures. Finally, Force was boxed in.
How Was Shaun Bridges Booked
The investigation of Carl Force led to the apprehension of Shaun Bridges. In early December 2014, when Haun was getting ready to charge Carl Force, Gambaryan came up with a startling discovery.
He found out through Wallet Explorer, a smart Bitcoin block explorer that offers wallet labeling and address grouping service, that the second payment of 525 bitcoins was directly sent by the Silkroad founder (by manually cross-referencing his and Force’s bitcoin transactions) to another account.
This indicated the involvement of yet another person. Gambaryan investigated the matter further and started doubting whether Bridges and Number13 accounts were the same.
Haun and Gambaryan also found out that the stolen bitcoins have been sent to Mt. Gox exchange from the Number13 account. Gambaryan used a mutual legal assistance treaty procedure for accessing the financial records of the Japanese bankruptcy trustee.
The records showed money had been moved to a Fidelity account registered as “Quantum Investments” from the Mt. Gox exchange. Quantum Investments was found to be a company registered by Bridges in his name and home address.
Bridges resigned from his position in the Secret Service on March 15, 2015, and this suggested strongly that the other person involved in stealing the Silkroad founder’s and government’s money was none other than himself.
A proffer session was offered to Bridges also. However, he was unrepentant and arrogant during the session.
Charges were filed against both the Silkroad agents on March 30, 2015. Within one month, Bridges, and a few weeks later, Force, pleaded guilty.
Bridges and Force were sentenced to 71 months and 78 months, respectively, in prison.
While Force is serving his term in a federal prison located near Louisville, Kentucky, Bridges is in the Terre Haute Federal Correctional Institution in Indiana.
The Silkroad is back, making headlines once again, with the defense team of Ross Ulbricht filing a reply brief in the Second Circuit U.S. Court of Appeals as part of the appeal filed in January this year.
The reply brief filed questions whether the trial which led to the Silkroad founder’s conviction was fair enough in any manner whatsoever.
Defense counsel Joshua Dratel’s latest reply in response to the brief filed in June by the prosecution states that his client’s conviction does not hold ground as the Silkroad investigation was carried out with the help of a couple of corrupt officials.
In addition, the reply brief refers to a number of abuses by the court that can be considered as discretionary authority.
According to Dratel, this resulted in the gross violation of the Silkroad founder’s rights.
ANNOUNCEMENT: Silk Road 3.0 is BACK ONLINE and open for business.
The team did a massive security overhaul on the site to try and make it more secure and anonymous.
The creator of Silkroad, Ross Ulbricht, who operated the website under the pseudonym Dread Pirate Roberts, was apprehended and convicted of operating an online marketplace for drugs, weapons, and several other illegal goods.
Currently, he is in prison, serving a life sentence without parole for operating the Silkroad marketplace.
In addition to requesting the court to vacate all of the convictions against the founder of Silkroad, the reply brief calls for a re-sentencing or conducting a retrial before another district judge.
In the introductory note of the new reply brief submitted on behalf of the defendant and Silkroad founder Ross Ulbricht, it is mentioned that a point-by-point rebuttal of the government’s brief is not required as they either cover undisputed territory (those that deal with basic legal principles), or present sufficiently anticipated arguments that have already been addressed in the initial brief filed by the defense team.
The new reply filing, therefore, focuses on bringing out the weaknesses in the responses of the government by citing specific examples and highlighting critical issues that have not been addressed at all.
Soon after Ulbricht was convicted, Carl Force and Shaun Bridges, the law enforcement officers associated with the investigation of Silkroad, pleaded guilty of committing certain crimes when carrying out their part of the investigation.
Carl Force of Drug Enforcement Administration (DEA) and Shaun Bridges from the U.S. Secret Service pleaded guilty to charges of theft, extortion, and misappropriation of bitcoins belonging to Ulbricht and Silkroad leveled against them.
In the new reply brief filed by the defense counsel Dratel, the argument put forward by him is that the two law enforcement officers had played a significant role in investigating the case which resulted in the arrest, conviction, and sentencing of the Silkroad founder.
He also points to the fact that the government suppressed information about the criminal investigation that was being carried out during the course of Ulbricht’s trial.
In addition, the defense counsel says that the information released, collected or discovered since the filing of the initial brief by Ulbricht vitiates any of the government’s arguments about separating the participation of Force and Bridges in the Silkroad investigation.
Further, Dratel says that Katherine Forrest, the judge who presided over the Silkroad and Ulbricht’s trial, illegitimately prevented him from cross-examining some of the witnesses concerning certain technical aspects and disallowed him from presenting two of the defense witnesses.
Apart from the points raised as regards to the shortcomings on the part of Judge Forrest and the government, defense counsel Dratel notes in the brief that the government violated the Silkroad founder’s Fourth Amendment right.
According to him, the government issued unlawful warrants for searching and seizing belongings and data of Ross Ulbricht without mentioning any kind of evidence against him at that point in time.
According to Dratel, as far as the warrants were concerned, there was a lack of Particularity In Application as well as Execution and the Pen Register and the Trap and Trace Orders were not lawful because they cannot be executed without a warrant.
Also, they failed to stick to statutory limitations.
The nature of the sentence given to Ross Ulbricht by Judge Katherine Forrest, among other things, has also been contested by the defense counsel.
He has expressed his opinion that the justification of life sentence without parole that was awarded to Ulbricht refers to different drug overdose deaths that are not in any way related to the Silkroad case at all.
In addition, he points out that the judgment that was handed down to Ross takes into account certain factors for which he was never even charged with.
After the defense team for Silkroad founder Ross Ulbricht launched its appeal for initiating a new trial in January, the last hope for the Silkroad creator to escape a life sentence, the prosecution responded by rebutting each and every argument raised by the defense counsel.
The brief filed by the prosecution was just a rehash of the Silkroad founder’s trial early last year.
The brief also questioned Judge Katherine Forrest’s decisions in favor of the prosecution, which included suppression of defense evidence, admission of prosecution evidence and denial of defense witnesses.
This prompted Ulbricht’s attorneys to call for a mistrial at least five times.
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