US Marshals To Auction Over 2,700 Silk Road Bitcoins

The United States Marshals Service recently made its plans to auction more than 2,700 BTC that’s worth over $1.6 million, taken from several cases, including those stemmed from the investigations on the Silk Road and its founder Ross Ulbricht.

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.

>> Click here to find the Silk Road 3.0 Guide <<

US-Marshalls-50000-Bitcoin-Auction-complete-Ulbricht2-825x510USMS tells how the soon-to-be-auctioned bitcoins are linked to some civil, administrative, and criminal matters pursued by the US government in previous years.

The highest profile among them is the case involving the Silk Road dark web marketplace.

Bitcoin Sources

As the first ever darknet market, the Silk Road soon became a notorious online platform where users were able to buy and sell illicit drugs and various other goods and services.

In line with maintaining anonymity is the use of bitcoin for all transactions, which were ultimately confiscated from the site’s creator, Ross Ulbricht.

Ross Ulbricht was sentenced May last year to life in prison, following the conviction of running an online marketplace which facilitated over $200 million anonymous drug sales transpiring online within the dark web.

The sentence is currently being appealed.

The Silk Road creator’s case is just one out of 9 cases from which a total of 2,719 BTC was forfeited, and now subject to the latest auction according to the US Marshals Service.

In fact, only around 2.8 bitcoins in the upcoming auction actually stems from Ulbricht’s case.

USMS reveals that the bitcoins accounting for 1,294 stem from a civil case associated to Matthew Gillum, a drug dealer from Silk Road who’s been sentenced to 9 years in prison in 2015.

The federal law enforcement agency tells of another 65 BTC coming from the case of former U.S. DEA agent Carl Force IV.

He was sentenced to 78 months back in October 2015 for stealing bitcoins while investigating the Silk Road.

Another 664 out of the 2,719 bitcoins came from Sean Roberson’s case, who allegedly created an online shop catering to counterfeit debit and credit cards.

This Florida man was sentenced to prison for 78 months in November 2015.

Auction Details

bitcoin-auction-participantsThe bitcoin auction will be held this August 22.

Those who wish to participate must register by August 18 and are required to deposit $100,000.

Potential participants outside of the U.S. are welcome as long as they do not belong in the “Specially Designated Nationals” list by the Treasury Department.

USMS said that winners would be notified right on the same day.

The auction is deemed a blind process, meaning the winning bid is not visible to those who make an offer.

August 22 marks the latest of several auctions held by the agency in the past two years, counting four from June 2014 – November 2015 with the Silk Road auction as the last one held during late 2015.

Going back to June, 24,500-bitcoin cache was auctioned off by Ernst & Young in Australia, confiscated from a former user of Silk Road originating from the country.

To date, bitcoin’s legal status may be in a grey area in most parts of the globe. Federal government auctions have increased its legitimacy in the US.

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Lyn Ulbricht Speaks about Other People Involved In Silk Road

Silkroad creator’s mother, Lyn Ulbricht expresses her thoughts on another corruption uncovered in the Silkroad saga for the world to know.

She talks about the controversial fact that there are others who were picked up on their involvement in Silkroad drug charges, though none ended up close to Ross’ sentence which makes the grotesque disparity quite evident.

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.

>> Click here to find the Silk Road 3.0 Guide <<

Lyn Ulbricht Two crooked cops by the name Carl Force, former DEA agent, and former Secret Service agent Shawn Bridges have been accused of stealing Silkroad bitcoins.

Most recently, Bridges is suspected of stealing Silkroad bitcoins once again, and in two more cases.

He was helping himself to $700,000 USD more and another $20,000 in BTC to top the first $800,000 he had already been caught red-handed on during the Silkroad investigation.

What was Silkroad prosecuting attorney Preet Bharara’s response? Despite the explicitly tampered evidence in the hands of corrupt fed agents, Ross Ulbricht remains guilty.

The Barbaric Sentence

Lyn tells how U.S. District Judge Katherine Forrest issued a barbaric sentence just because Ross was deemed a political threat by the judge herself.

Isn’t this a bit harsh on a man whose only weapon was a keyboard or computer, considering the grave crimes of murderers and child molesters?

Dread Pirate Roberts and the Silkroad darknet market he created was a triumph of libertarian ideals and technology that the government cannot control.

It’s the blatant truth behind the Silkroad that once existed in the dark web.

However, the judge found Ross Ulbricht’s writings and beliefs to be deeply troubling and highly dangerous.

Lyn and the defense strongly believe that her son was treated and jailed unfairly mainly because he was the creator of the first online black market that ultimately became the largest illicit drug platform.

Three of the notable arrests include leading Silk Road vendor Jan Slomp, biggest cocaine and heroin vendor Steven Sadler, and Silkroad administrator Peter Nash.

They received a 10-year, 5-year, and 17-month sentence respectively.

Moreover, the corrupt agents got 6 and 7 years while Silkroad 2.0’s key player Brian Farrell was given an 8-year prison term.

Now, what about Ulbricht? Charged with money laundering, conspiracy to narcotic trafficking, computer hacking, and murder which was eventually dropped though he was still handed down a life sentence, and without the possibility of parole.

Ulbricht’s supporters have just gotten their speculations confirmed that Ross served as a scapegoat for the failed drug policy of the American government.

His mother states that this convinced her that her son was a political prisoner.

The government wanted to make an example out of him to warn others and deter them from creating criminal sites similar to the Silkroad.

However, the results are otherwise with even more dark web sites that have emerged today which are far bigger than the original Silkroad marketplace.

Corruption in the Silkroad Case

lyn ulbrichtFirst off, Lyn points out that the Silkroad trial was mishandled right from the start.

She questions the Senator of New York’s closure of Silkroad followed by strangely ordering the trial in the state, rather than in California where he was arrested.

Charles Schumer had connections with the legal prosecutor as his own special counsel and the Silkroad judge having been suggested by the senator himself.

Lyn alleges that research done by a professional forensic pathologist concluded that no scientific evidence proves Silkroad drugs caused the alleged deaths.

Lyn expresses how terrible she feels for parents of those who died, but voices out that the courtroom must rely more on facts, evidence, and cross-examine all parties instead of completely focusing on Silkroad founder.

Ross wasn’t allowed to defend himself, and Silkroad witnesses were muzzled as the judge totally refused to hear their side of the Silkroad story.

Nowhere in the law does it state that a harsher punishment is imperative for the first offender in any case.

Also, Shaun Bridges was clearly empowered over the Silkroad site, and evidence manipulation has been proven twice now.

The prosecution has utterly ignored this along with the unabashed mishandling of the Silkroad case.

These actions coming from the government has led many to believe that the US justice system has failed.

Also considering that it relies on digital evidence, pertaining to that which can easily be forged, is one thing that’s actually troubling when looking at future convictions.

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Australia To Auction 24,518 BTC Confiscated From Silk Road User

The Australian authorities will be auctioning off 24,518 bitcoins estimated to be worth $12.9 million; these bitcoins were originally seized from a user of the now defunct darknet marketplace Silkroad. The auction will be held by Ernst & Young global professional services company.This sale will mark an end to a process that started in late 2014 when authorities confiscated the bitcoins from a Silkroad user known as Richard Pollard. Pollard is a Melbourne resident who was later given an 11-year prison sentence on charges of commercial drug trafficking on Silkroad.

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.

>> Click here to find the Silk Road 3.0 Guide <<

ross-ulbrichtRoss Ulbricht, the creator of the original Silkroad, was arrested in October 2013 and was sentenced to life in prison for running the infamous dark web marketplace Silkroad in 2015. The US Marshals Service auctioned off more than 170,000 bitcoins confiscated after the shutdown of Silkroad, which includes 144,000 bitcoins seized by the authorities from the Silkroad creator’s laptop. Last year,the final auction held by the US Marshals Service saw 44,000 Silkroad bitcoins put up for bidding.

Ernst & Young said in a press statement that the auction of bitcoins seized from the Silkroad user will be conducted over a 2-day period starting from 12.01am on 20th June 2016 Australian time. Just like other previous auctions held in the US by the US Marshals Service (USMS), all bitcoins for sale will be subdivided into blocks consisting of 2,000 BTC, which are approximately worth $1million,with 11 unique blocks up for sale. In a short statement, the company’s transactions partner, Adam Nikitins said that he’s optimistic that the bitcoin auction would attract buyers from both Europe and North America since they participated heavily in the last four open sales held in the US.

Australia To AuctionAccording to Nikitins, they are targeting sophisticated investors who appreciate the value of putting their money in an expanding digital asset.
Participants can directly submit their applications to E&Y for inclusion into the forthcoming bitcoin auction; deadline for submission is on 7th June,with Ernst & Young hoping to collect all necessary information for the event before 10th June.

This event is expected to take place just before official halving of anticipated rewards paid off to the bitcoin network’s transaction processors, which is scheduled to occur a month later in July. The timing of events suggests that economic fluctuations of bitcoin market rates play a huge role in determining when to auction seized cryptocurrencies.

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Corrupt Silk Road Agent Allegedly Has Co-Conspirators

>> Click here to find the AlphaBay Market Guide <<

A new filing in court by prosecutors states that the corrupt officer Shaun Bridges, associated with Silk Road investigations, might have had one, or more than one co-conspirator. However, the details related to this finding have not yet been fully revealed. Bridges, the ex-Secret Service agent who was sentenced to about six years in federal prison was arrested for the second time in January on suspicion that he would attempt to leave the country. The US Marshals Service has been keeping him under their custody since then, according to court records.

On completion of the trial as well as conviction of Ross Ulbricht, the Silk Road mastermind, two ex-agents Shaun Bridges and Carl Force were convicted of stealing several hundreds of thousands of dollars in bitcoins when they were in charge of investigations into the operations of Silk Road. Bridges made use of the admin privileges provided by an arrested Silk Road administrator for stealing bitcoins worth as much as $800,000 from the drug dealers on Silk Road. He pleaded guilty of obstruction charges and money laundering last year.

silkroad

It is these thefts that prompted the creator of the dark web drug marketplace Silk Road, who operated under the pseudonym “Dread Pirate Roberts,” to allegedly hire a hit man to assassinate one of his former employees. However, the person he hired was an undercover agent who worked with the DEA, Carl Force.

Bridges who has been kept in custody following his re-arrest on 28 January 2016 had sought to unseal the evidence of government in order to help him defend himself and also to get his property back. Bridges complained that he has not only been denied his freedom, but also his property without any indicating any wrongdoings by him.

In the response filed by the prosecutors, they requested that the judge keep everything under seal because they were continuing to look into the full extent of crimes committed by Bridges.

Despite the fact that there is not much information against him, the government prosecutors continue to state that Bridges is guilty of committing several additional crimes, including those that happened prior to and after the date on which he pleaded guilty and was sentenced to the term in prison.

According to prosecutors, they have come across evidence related to additional crimes committed by him during a search of the house of Bridges one day prior to the scheduled date on which he was to surrender himself to a federal prison. Reportedly, police found corporate documents related to offshore companies, a passport card, and documents relating to the attempts made by his wife to obtain the citizenship of another country, among other things.

In their filing, the prosecutors noted that though Bridges is currently in custody on the underlying case, co-conspirator(s) who worked with him are free and, therefore, the investigations would be hampered if the information included in the search warrant was disclosed.

silkroad1

As of now, the nature of the additional crimes committed by Bridges is unclear. However, in a filing dated 17 February 2016 it is noted that additional bitcoin thefts from accounts have been observed. The government believes that Bridges could have worked with others in these thefts.

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Ex-Silk Road Secret Service Agent Sentenced To Almost 6 Years

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Shaun BridgesA former special agent officer working with the Secret Service has been sentenced to 71 months imprisonment by a California court. Shaun Bridges, 33, was found guilty of money laundering and obstructing justice when conducting the Silk Road investigations. Presiding U.S District Magistrate Richard Seeborg also ordered him to pay a fine of $651,000 for his crimes.

This announcement was made by Assistant AG of the Criminal Division Justice Department, Leslie R. Caldwell, together with other key government officials. During his active days, Bridges was part of a police unit charged with performing investigations in Baltimore area. Earlier on, another suspect working on the same case also got arrested and is currently serving time in prison.

Together with Shaun, they spearheaded an FBI-led taskforce following the digital blueprint left behind by Silk Road founder, Ross Ulbricht, who was earlier on sentenced to life imprisonment in May. During investigations between 2012 and 2014, feds made an arrest on customer support staff Curtis Green, whom they planned to use as an asset in their inquiries. However, it later on emerged that Bridges reset the suspect’s account information and transferred 20,000 bitcoins to another personal account. These units had an estimated value of $350,000. While this move is criminal by itself, it also served to make Ulbricht suspicious hence prompting a revocation of Green’s Silk Road administrator pass and hindering investigations.

The accused had a personal responsibility of conducting forensic digital investigations so as to locate, identify and arraign targets including Dread Pirate Roberts himself who ran the business from his base in California Northern District. While giving his guilty plea, he admitted to hijacking account information obtained during a search on Mr. Green. Resetting passwords and pin details on various accounts and moving the said amount of bitcoins to a personal wallet. It also emerged that the Silk Road founder attempted to kill his customer support staff in retaliation, after discovering that bitcoins had indeed been lost.

Bridges said that he moved the stolen sums into a foreign account belonging to Mt. Gox, a virtual currency exchange firm based in Japan. This transaction was apparently made between the months of March and May 2015, he liquidated the coins into $820,000 U.S. currency before transferring the funds to a private investment account in America. He shared this account with another undisclosed person.

Apart from misappropriating seized currency, the accused also admitted to making multiple false and ambiguous statements to investigators and prosecutors alike in connection to the grand jury investigations.

Bridges is now the second federal cop to be sentenced in light of conducting shady deals on the Silk Road. Prior to him, Carl M. Force, 46 a special agent also working on the same case but under Drug Enforcement Administration (DEA) was sentenced earlier this year.

During trial, Shaun’s lawyers had sought a maximum 3-yr. prison sentence but Judge Richard Seeborg mentioned that Bridges’ behavior was shocking and reprehensible; further stating that the accused openly abandoned his public duty, instead choosing to collude with the criminals themselves. Before issuing his nearly 6-yr. jail term verdict, the magistrate lamented that this was an extremely serious breach of public trust and professional obligation. And from evidence given such actions were only motivated by greed.

Richard SeeborgSeeborg further said that it was “inexcusable” for a practicing cop to intentionally put a cooperating Silk Road witness at risk, through blackmail and intimidation. Bridges had earlier accepted his charges of obstruction and money laundering in August; he was only awaiting sentencing that was recently given to him by the magistrate.

A tearful Shaun told the courtroom before incarceration that he’d accepted responsibility for all crimes committed, but had not used even a single coin of the stolen money which can still be retrieved by officials. He said a lot has been lost in his life in terms of an illustrious career, something that will never be recovered anytime soon due to the prison term.

Even after pleading guilty, his case is still undergoing more investigations to unearth findings that can prove helpful in fighting future cybercrime. This task is being carried out by San Francisco’s FBI Division, in conjunction with officials from Homeland Security and Department of Justice. Meanwhile, U.S Assistant Attorney of the Northern District of California, Arvon Perteet, is handling asset forfeiture matters.

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Former Silk Road Agent Intended To Invest In A Bitcoin Startup

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Agent Carl Mark Force IV was part of the Baltimore-based task force which investigated Silk Road, the online darknet market. As a member of the task force, Carl worked undercover under the alias (Nob) and developed a good working relationship with Ross Ulbricht, the Silk Road creator.

DEADuring this time, Carl Mark Force IV, the DEA (Drug Enforcement Administration) agent solicited and received the digital currency as payments for his illegal “favors.” He used a fake online name to steal from both the government and the investigation’s targets. In addition, he had improper conduct and stole sensitive information about the Silk Road case and sold it to the site’s leader (Ross Ulbricht). He was separately charged with stealing government property.

Before his arrest, Force had attempted to invest the bitcoins he had attained in a bitcoin start-up. He wrote the company’s owner requesting to become his partner and take up a role as the company’s compliance officer. He claimed that he had accumulated the millions of dollars worth of bitcoins when they were still cheap and wanted to invest them before they became too popular. Force further stated that he intended to leave the DEA and focus on investing in digital currency. However, the company’s owner sensed that something about Force was not quite right and did not respond to his requests.

The U.S. Attorney’s office also confirmed that Carl had actually used other identities that hadn’t been DEA approved in the Silk Road investigations. One such identity was that of a “French Maid.”

Dread Pirate RobertsIn October 2013, the Silk Road servers were seized and thus giving the law enforcement complete access to all messages sent among the site’s users. One such conversation was between the site leader (Dread Pirate Roberts) and French Maid. At one point, Carl mark made a mistake and signed of as Carl. However, he was quick to correct his mistake and sent another message in an attempt to clarify that his name was Carla Sophia. According to the case, investigators also discovered that “French maid” and “Nob” used the same encrypted software that was also outdated.

One of the strongest clues that tied French Maid to Carl was the money trail. The Silk Road server-data revealed that on 15th September 2013, Dread Pirate Roberts paid French Maid seven hundred and seventy bitcoins which at the time was worth approximately ninety eight thousand dollars. Around the same time, Dread Pirate Roberts also recorded the payment in his journal.

Despite their efforts to hide the bitcoins destination by breaking them up into four (separate) bitcoin addresses, the investigators traced their movement through the block-chain analysis that all lead to Carl’s account. In addition, at least six hundred bitcoins from this account were transferred to another account at Bitstamp. This particular account was in fact owned by Carl Force and had been registered using his date of birth, home address, personal email address and personal bank account. More bitcoins of a high value were also funneled to Carl’s personal checking account thus connecting him directly to the payments made by Dread Pirate Roberts to French Maid.

In many occasions, Force tried to use his DEA position for his own gain. For instance, he invested one hundred and ten thousand dollars worth of bitcoins into CoinMKT. While still working as a DEA agent, he was the de facto Chief Compliance Officer for CoinMKT. He even features in the pitch desk at CoinMKT to venture investors for capital. Furthermore, he was listed as Coin-MKT’s compliance officer so as to benefit Coin-MKT. The conversations that he had with the staff at CoinMKT further implied that he intended to leave the DEA and work for the company.

Earlier this year, Carl Force was indicted for obstruction of justice, money laundering and extortion. He was also accused of stealing both information and money in form of bitcoins during the Silk Road investigations. In July, he pled guilty for the charges. According to the recent court documents, the defense sought leniency for Carl Force on the basis of his mental health problems at the time and work environment. The defense requested for the sentence to be four years.

However, Richard Seeborg, the US District Judge said that the betrayal of public trust by Force was breathtaking and was simply motivated by greed. He also stated that Force’s greed and thrill seeking nature lead him to go as far as pursuing a movie and book deal.

Although the US government requested for a seven year and three months sentencing, Carl Mark Force IV was sentenced to six years and six months in a federal prison.

Force was also ordered to pay three thousand dollars in restitution to Curtis Green who is a former employee of Silk Road. In addition, the court ordered that he pay three hundred and thirty seven thousand dollars to an undisclosed party identified as RP.

Shaun Bridges, another federal agent was also charged with obstruction of justice and money laundering. He also pleaded guilty for stealing over eight hundred thousand dollars in bitcoins. His sentencing hearing is scheduled for December.

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itBit Wins 5 Blocks In The Latest Silk Road Bitcoin Auction

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<
The auctions arising from the seizure of the Silkroad marketplace in October of 2013 have finally finished, and with it end one of the final chapters of the world’s first darknet market.

The Silkroad marketplace had started out in February 2011, as an online space hidden behind the Tor browser that offered anonymity in Internet purchases. It used Bitcoins, the world’s first cryptocurrency to trade, and pseudonyms for buyers and sellers, thus making all exchanges virtually untraceable.

Unsurprisingly, Silkroad became a hotspot for dealing in illicit substances, and was soon on law enforcement’s radar.

Silkroad unravelling began in 2012 when the Baltimore Silkroad Taskforce began undercover operations designed to unmask the person behind the infamous marketplace.

Due to the work of authorities, Mr. Ross Ulbricht aka Dread Pirate Roberts, the originator of Silkroad, was arrested in October 2013 for his handiwork in founding and overseeing the Silkroad site. Following his arrest officers confiscated 26,000 BTC from the site, and then later 144,000 BTC from the laptop belonging to Ulbricht.

Silkroad Bitcoins Are Being Auctioned?

Book and Hammer
These Silkroad bitcoins have been slowing getting sold off in auctions conducted by the U.S. Marshal’s Service.

The first lot of seized bitcoins went up for sale in June of 2014, and came to a total of 30,000 BTC overall. The currency was split up into “blocks” and attracted 45 bidders placing a total of 63 bids.

Following rounds of auctions saw an increase in the number of bitcoins available, but a decrease in the number of bidders. All bidders were expected to make a US $100,000 per block deposit before entering the bidding process.

Who Have Silkroad BTC Gone To In Previous Rounds?

The winner of the majority of the blocks in Silkroad first round of auctioning off was Tim Draper. Draper is a venture capitalist with investments in companies such as Hotmail and Tesla. He cited his reasons for bidding as “wanting to strengthen cryptocurrency markets for international countries that have weak currencies.”

A syndicate helmed by venture capitalist Barry Silbert was the major winning bidder in the second round of Silkroad auctions totaling 50,000 BTC, where 11 bidders made a total of 27 bids.

In the third round of Silk Road auctions, totaling 50,000 BTC, in March of 2015, itBit reported that they had managed to win 3,000 worth of bitcoins.

Who Are itBit?

itBit is a financial services company specializing in bitcoins that first came on to the scene in April of 2012. They are a forward-thinking institution that strives to provide an accessible, legitimate and relevant service for those wanting to trade in cryptocurrencies.

Following itBit’s win in the third round of auctions, they applied for bitcoin’s first banking license, and in May 2015 were granted it by the New York Department of Financial Services.

In the fourth and final round of the Silkroad auctions held over six hours on November 5, itBit managed to outbid its competitors in grabbing a maximum amount of five block of the 44,000 bitcoins auction, which resulted in a win of approximately 10,000 BTC.

What Does This Mean For The Bitcoin Market?

Cash
Initially, before the completion of the first auction, analysts were uncertain of the anticipated effect of the auction on the price of bitcoins. If extra currency suddenly entered the market, then this would usually signal a drop in price.

However, the bitcoins weren’t immediately used.

If we can go by the history of what has happened in the price of bitcoins before, during and after the markets, then we needn’t be too worried. Following the end of the first Silkroad auction the price of bitcoins actually rose substantially, from 585 dollars beforehand up to 600 dollars following.

Prior to the second Silkroad auction the price of bitcoin plummeted, and remained low for a short time before recovering to previous prices.

A similar effect occurred in the third Silkroad auction.

Due to the knowledge that is it unlikely any of the winning bidders bitcoins will end up flooding the market anytime soon, we can be somewhat reassured that the price of bitcoins will remain on its course at present.

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Man Sentenced To 9 Years For Silk Road Mail-Order Pot Scheme

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

Mathew Luke Gillum, resident of Meadow Vista was sentenced by US District Judge Morrison C. England Jr. earlier this month to nine years in prison for having conspired to sell marijuana. He was arrested in the year 2013. In addition to masterminding the drug trafficking operations, the charges on Gillum also included avoiding a currency transaction reporting requirement.

Mathew’s Modus Operandi

Police CarOperating in the greater Sacramento area, Mathew distributed marijuana by soliciting orders through Silkroad, the sub-surface anonymous site that operated in the darkweb. Silkroad is a website that sold drugs illegally under categories such as “Stimulants” and “Psychedelics.” The 31-year-old creator of Silkroad, Ross Ulbricht, allegedly collected over $18 million in bitcoins before the Silkroad website was tracked down and closed in 2013. The Silkroad founder, Ross Ulbricht, was sentenced to life in prison.

As the leader of the drug-trafficking organization, Gillum shipped the marijuana orders through US mail to many different locations outside California. This clandestine Silkroad extended operation was routed through different individuals (about five in number) who helped to complete it. It included opening the post office boxes, collecting the proceeds, facilitating communications, shipping the parcels and manufacturing and supplying the weed.

The marijuana orders were solicited through Silkroad. The customers shipped back cash on receiving the parcels to different post offices that were under the control of Gillum and his drug-trafficking organization. On receipt of the payment, the order was then shipped to the corresponding buyer. The type and quantity of marijuana were carefully chosen before shipment to the customer.

Between the months of August 2012 and July 2013, the Silkroad mail-order pot scheme run by Gillum is estimated to have sourced and sold over 600 pounds of marijuana to individuals in 16 different states. The Silkroad drugs were received as Express Mail parcels in Sacramento. A bitcoin account held by Gillum yielded more than $700,000 during investigation.

Mathew Gillum – Cash Transaction Reporting Anomaly

CashFederal officers investigating the case brought to light anomalies in a cash transaction reporting requirement when Gillum purchased a diamond ring from Tiffany & Co. for a little over $100,000 in cash in February 2013. Any transaction above $10,000 in cash requires that an IRS 8300 form be filled out and filed in the purchaser’s name. However, though Gillum paid up the cash, he got a nominee to fill out the paperwork and submit the form as though he had purchased the ring.

The Investigation – Start and Progress

The investigation began in the month of August 2012 when postal authorities detected arrival of a large number of “express mail” packages containing large sums in US currency notes. They caused suspicion as the parcels were addressed to fictitious business addresses (American Sound Concepts, Granite Cove Property Management were some of them) in the Sacramento area.

However, in the month of December 2012, a recipient of this kind of a parcel (from New Jersey) turned out to cooperate with the investigators. He confessed of having purchased 5 pounds of marijuana from the Silkroad website under a false name. He also admitted to having sent $12000 to Mathew Gillum for the “controlled delivery” marijuana packages. The Silkroad website functioned using the anonymous Tor network which required special browsers to access it. The details and communications between the users and vendors of sites in the darkweb are encrypted to evade detection. All Silkroad transactions were carried out in bitcoins. This confession further led the investigators to the courier that Gillum was using at the Rocklin PO (located on Pacific Avenue) on March 20. With cooperation from the courier, a raid was later conducted on the same day at the courier’s premises where they caught Gillum red-handed leaving the premises with a backpack containing over $7000 in cash. Though he was released then, a search was conducted in his home, located at Penryn Road, Loomis, later in the same day. Clothed in only his wet underwear, Gillum was caught trying to do away with evidence in a creek near his home. The home of Jolene Chan, who investigators said processed and packaged marijuana for the Silkroad mail order pot scheme, was also raided on that day. Gillum and Jolene together managed to handle about 400 Silkroad transactions.

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Silk Road Creator Asked For help To Recover Lost Bitcoins

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<
As you may know already, Ross Ulbricht, the creator of the largest and legendary Dark Web market, Silkroad, is starting to serve his sentence – lifetime in prison. And even though many of us are pretty familiar with all things Silkroad related, we are yet to unravel, decipher and understand certain events that took place at the time.

One such puzzle, not only for the LE necessarily, but also for those nostalgic Silkroad users, is the fact that at one point the Silkroad creator actually asked help and offered a considerable reward to recover his lost bitcoins – 40,000 of them!

As it happens and according to a pair of investigators, one known by a mysterious nickname “imposter” and the other by a slightly less dramatic name, Gwern Branwen – they may have stumbled upon a forum account that presumably belonged to Silkroad founder, Ross Ulbricht. Gwern Branwen who is a moderator of the /r/darknetmarkets subreddit claims that the account named kohlanta on Bitcoin Talk forums IS the infamous Ulbricht himself.

According to them, it was imposter who was working on researching the connection between the Silkroad creator, Mr. Ulbricht, and Mt. Gox. Apparently he found “something interesting on the 1MR6pXD address” which refers to a bitcoin address discovered by the pair. They identified a Mt. Gox account which the founder of Silkroad market used for his transactions.

Ross Ulbircht
Furthermore, imposter revealed that he came across a long forgotten forum thread from August 2012 in which certain kohlanta claimed he was the owner of the above mentioned bitcoin address. Kohlanta apparently had some issues with his bitcoins so he asked for help and offered a reward in BTC to a person that manages to recover the lost 40,000 bitcoins.

The exact post from kohlanta reads: “If you look it up in the blockchain, you can see that currently it contains 44,914.031337 BTC. As you can see, the address is present in the wallet, and the blockchain is up to date, yet the balance reads zero. 100 btc to anyone who can help me solve this problem. Thanks!”

Naturally, the solution was found in a jiffy and the helper received his 100BTC reward. Apparently, all he was supposed to do is run “bitcoind -rescan” command which would make his Bitcoin client synchronize with the blockchain and voila!

On a side note, at the time this conversation took place, one bitcoin was worth about 10 bucks, which brought the helper about a thousand dollar prize.

Apparently, the thread continued with someone noticing the irony that someone can actually own such a huge amount of bitcoins, and not be able to manage their Bitcoin software.

This, however, was not an isolated case – kohlanta offered a bitcoin reward for technical issues he had again on at least two occasions – once in January 2013 when he needed help with Bitcoin software again and the second time in March when he had some PHP issues.

Bitcoin
To support their case that kohlanta is actually Silkroad founder Ross Ulbricht’s account, the pair of investigators also pointed out that Ko Lanta is actually a huge tourist attraction in Thailand, and Ulbricht’s visit to Thailand was well documented in his journal.

In the light of this revelation, it sounds quite viable that kohlanta was actually the Silkroad creator, Ross Ulbricht, himself. After all, he did mention on multiple occasions in his journal how he learned and mastered coding along the way, while working and maintaining the Silkroad. This goes to show that perhaps there were people who helped developing the Silkroad marketplace without being aware of it!

Just a reminder, Ross Ulbricht was arrested in a public library in San Francisco, on 1st October 2013. He had his laptop with him and the agents immediately took incriminating snapshots of his screen. Agent Chris Tarbell showed him the warrant for his arrest.

He was accused of money laundering, conspiracy to traffic illicit drugs, computer hacking, even ordering murders. His trial was extremely well publicized, but eventually he was sentenced to a lifetime in prison without parole on May 29, 2015.

Prior to his arrest, Silkroad had become a recognizable brand on the Dark Web. It was the first, the largest and definitely the most popular market at the time. However, following his arrest and shutting down the Silkroad marketplace, many other markets started a race to for the lead place on the Dark Web. Many have even named their market based on Silkroad brand. According to the most recent accounts, AlphaBay marketplace is currently considered the largest community on the Dark Web.

As for Mr. Ulbricht, only 6 months into his sentence, Silkroad brand is still strong and inspires nostalgia among its former users; many of them are still looking for more digital traces of Silkroad creator, Ross Ulbricht.

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Fourth And Final Silk Road Bitcoin Auction

ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.

>> Click here to find the Silk Road 3 Guide <<

The US government on Thursday, 5th November 2015 held its final auction of bitcoins which were confiscated during the prosecution of Ross William Ulbricht, a Penn State graduate who authorities say created and run Silk Road. Before it was shut down in October 2013, Silk Road operated for over 2 years, generating more than $214 million in sales of drugs and other illegal goods using bitcoins.

Score Card "88"
The United States Marshals Service (USMS) said the 6 hour online auction it held on Thursday from 8am to 2pm EST for approximately 44,341 bitcoins worth over $17.2 million, drew eleven registered bidders who submitted a total of thirty bids on twenty two blocks of the bitcoins during the auction. Twenty one of the blocks were for 2,000 bitcoins, while the final block included 2,341 bitcoins. Participation was once again down sharply from the 1st auction of approximately 30,000 bitcoins, where forty five registered bidders placed sixty three bids.

The billionaire venture capitalist and founder of Draper University, Tim Draper, who was successful in 2 prior bitcoin sales, indicated that he wasn’t participating in the fourth auction. It was earlier speculated that Genesis Trading, a subsidiary of the Digital Currency Group, which is run by Barry Silbert and another bitcoin hedge fund known as Binary Financial will participate in this auction. According to Lynzey Donahue, a US Marshals Service spokeswoman, no further details will be released until all the bitcoins have been transferred to the winners.

Although the Silk Road crackdown was part of a joint-operation between the US Secret Service and the United States FBI, it was the USMS which was given the charge of handling the confiscated goods from Silk Road that was mostly bitcoins. Approximately 174,000 bitcoins were seized from the Silk Road. The US Marshals Service had previously held a total of 3 auctions where most of the Silk Road bitcoins were sold to qualified members of the US public.

The first auction which was held in June 2014 had 30,000 bitcoins on sale and attracted forty five bidders who made sixty three bids. The first portion of the bitcoins was won by Tim Draper.

The second auction which was held in December 2014 had 50,000 bitcoins on sale but it recorded a lower-turnout when compared to the 1st auction. It had only eleven bidders who made twenty seven bids. Most of the second auction’s bitcoins were purchased by the Bitcoin Investment -Trust bidding syndicate, leaving Tim Draper with the only remaining 2,000 bitcoins.

The third auction which was held in March 2015 2014 had another 50,000 bitcoins that were sold to the highest bidder. In spite of the fact that there were fourteen bidders who competed for the Silk Road bitcoins in the third auction, almost 47,000 or 94 percent of the bitcoins were purchased by Cumberland Mining. ItBit exchange was able to secure 1 block of 3,000 bitcoins.

The fourth auction came amid a surge in the price of the virtual currency, with the price of one bitcoin hitting $500 on Wednesday 4th November 2015 for the first time since August 2014. The price later fell, and by late Thursday, 5th November 2015, one bitcoin was worth $388, according to the Bitstamp exchange.

Bitcoins
The bitcoins that were sold in the fourth auction were the last remaining in custody in connection with the federal prosecution of Ross William Ulbricht alleged by the FBI to be the owner and founder of Silk Road and the person behind the pseudonym “Dread Pirate Roberts.” In October 2013, Ross Ulbricht was arrested by the United States authorities. In total, 144,000 bitcoins were seized from Ulbricht’s laptop. Additionally, 29,655 bitcoins were held in wallets on the Silk Road at the time it was shut down. Hence, the total amount of bitcoins that were seized during the Silk Road crackdown is around 174,000 bitcoins. On 27th January, 2015, Ross William Ulbricht and the US government agreed to the sale of the seized bitcoins during his trial. According to the agreement, Ross allowed the US to sell all or any portion of the seized bitcoins. Additionally, the manner of the sale of the bitcoins was left to be determined by the US government. Ross was sentenced to life-imprisonment of twenty years without the possibility of parole on 29th May 2015. He’s jailed in the Metropolitan Detention Center, Brooklyn. Ross Ulbricht has also been ordered to a civil-asset forfeiture of over $183 million.

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