- The prosecution in the Silk Road case has replied to the motions submitted by Ulbricht’s attorney (some highlights below). This reply shows what a wide net of criminal liability the government is casting, and what that might mean for future cases against others, especially Internet and website providers.The government overreaches.
o It ominously states that “federal criminal laws are expansive and adaptable.” It particularly applies this to the Internet. However Due Process, guaranteed by the Constitution, requires that federal laws be clear and specific, not something that can morph, grow and change at the whim of prosecutors.
o It stretches the definition of conspiracy liability, creating a large umbrella that includes anyone it considers a co-conspirator. The government doesn’t care if a person’s role in a crime is large or small, direct or even indirect. They say they can prosecute everyone and anyone they consider to be a “co-conspirator.”
o It argues that performing imprecise, supportive “ancillary functions” (like that of web host) can be the basis for criminal liability.
o It argues that it can expand how terms such as “organize,” “supervise” and “manage,” are applied, in order to cover the “kingpin” allegation.
The government defends its vagueness.
o It argues that it does not need to use “technical precision” in its allegations.
o It states that it does not need to specify the particular drug violations they allege.
The government says you should just trust them. It states that while citizens involved in civil lawsuits are protected by §230, those in criminal cases are not. They say this is because the government can be trusted not to abuse the legal system.
The government claims that a website host is responsible for the criminal activity of site users. Strikingly missing in both the Indictment and the government response is the allegation of “selling, buying, or possessing controlled substances” or computer hacking software; or with entering into any agreement with those who did. Instead the government alleges that Ulbricht operated the Silk Road website. It asserts that this is enough to charge him with conspiracy to violate “certain narcotics laws” and to claim that Silk Road users were his business partners in a joint venture.
The government dodges the question of how one person’s intent can be transferred to someone else. This is demonstrated in the computer malware charge, which fails to explain how a website manager would share the criminal intent of a software buyer, whether or not the software was ever used. It is especially weak, as the government acknowledges this software can be used legitimately and legally.
Insisting that one person is responsible for the intention of another constructs a double crime that did not actually occur. The law considers such an allegation, far removed from any actual conduct, a threat to our rights and does not permit it.
The government uses the description of a website manager to define “kingpin.” The government description includes designing the website structure; setting and enforcing vendor rules; controlling any arbitration process between vendor and buyer; determining commissions; and arranging site activities into a “unified, orderly enterprise.” In other words, what every commercial internet site does to manage its traffic.
The government claims that its charges do not have to match the law’s definitions. For instance, it says that it does not matter whether the number of employees alleged to have supervised drug sales on the site matches the number required by the statute. They say Ulbricht is a kingpin anyway, if he arbitrated a dispute or transmitted a private communication. In other words, he’s a kingpin if they say so – despite the precise description in the law.
The government equates Tor users with would-be criminals. It says that purchasers demonstrated their criminal intentions by reaching Silk Road “in a surreptitious fashion, by logging into the Tor network to hide their identities and locations . . .”
The government redefines what funds are. It contradicts the positions on Bitcoin of both the IRS and Dept. of Treasury’s Financial Crimes Enforcement Network (FinCEN). Instead, it presents the strained interpretation that the money laundering statute should contain no definition of funds at all. This opens the door to calling all exchangeable property “funds” and making it all liable to money laundering charges.