RAILROADED

The Targeting and Caging of Ross Ulbricht

Sign Ross’s petition

Reading guide: The People Involved
Episode 1: Chapters 1-5
Episode 2: Chapters 6-10
Episode 3: Chapters 11-14
Episode 4: Chapters 15-17
Episode 5: Chapters 16-18
Episode 6: Chapters 19-21

Also available on iTunes, Spotify, Stitcher, SoundCloud and TuneIn

Episode 4: Release on 10/23
Episode 5: Release on 10/30
Episode 6: Release on 11/13

“Ross Ulbricht found himself at the intersection of three of the most highly prosecuted areas of law in the United States today: cyber, the drug war and financial regulation. Meaning the Silk Road angered a lot of people in power.”
– Alex Winter, Director of Deep Web


 

The following is based on public information sources, including court filings, transcripts, trial exhibits, affidavits, warrant applications, subpoenas, judicial rulings, investigation reports, press releases, sworn testimony and direct evidence. Some gaps remain due to government protective orders, redactions, sealed records, missing records the court cannot account for, dropped investigations, tampered evidence, communications and other data that remain encrypted, and the fact many of the parties involved have not testified.

Even so, every effort has been made to accurately present the available evidence surrounding the creation, investigation and shutdown of Silk Road, and the prosecution of Ross Ulbricht.

1. Traveling the Silk Road

The Silk Road anonymous market was an e-commerce website similar to Amazon or eBay but with an emphasis on user security and anonymity. It was launched in early February 2011 by Ross Ulbricht and employed two key pieces of technology. One was Tor, a global network of computers that routes internet traffic in a way that is nearly impossible to trace. Tor allowed users to connect to Silk Road without revealing their identity or location and without their internet providers knowing about it.[1-1] The other was the cryptocurrency Bitcoin, which allowed Silk Road users to anonymously pay or be paid for the goods and services listed on the site.[1-2]
Ross, at the time 26 years old, envisioned Silk Road as a “free-market economic experiment,” an open platform driven by its user community.[1-3] He believed that “people should have the right to buy and sell whatever they wanted so long as they weren’t hurting anyone else.”[1-4] The guiding philosophy of the site was that it is no one else’s business who you are or what you’re buying and selling as long as the transaction is voluntary and no third party is harmed. Some things were therefore prohibited, including stolen items, child pornography, counterfeits, and generally anything used to harm or defraud others, but users were not told specifically what to list for sale.[1-5][1-6] Many legal items were sold, such as gold, books, art and clothing.[1-7] However, more and more vendors realized that the site’s anonymity made it a safe platform for selling illegal drugs, the most common transactions being for personal use amounts of cannabis.[1-8]
Ross Ulbricht
Ross envisioned Silk Road as a free-market economic experiment, an open platform driven by its user community.
A few months after its launch, gawker.com published an article about Silk Road, exposing it to a more general audience.[1-9] Then, in early June 2011, New York Senator Chuck Schumer, a member of the Senate Finance and Banking Committees,[1-10] called for a “crackdown” on Bitcoin, the immediate closure of Silk Road, and the apprehension of those behind it.[1-11] It became known as Schumer’s case.

2. Passing the Torch


“Pay attention if you care about due process, Fourth Amendment protections against illegal searches, the limits of government surveillance and internet freedom.”
– Nick Gillespie, Editor-in-Chief, Reason


With no programming experience or training, Ross’s limited skills were soon inadequate to handle the complexities of Silk Road’s technology, so he turned to a college friend, Richard Bates. Bates had studied computer science and was working for PayPal and eBay, companies that specialized in online payments and e-commerce, expertise suited for Silk Road.[2-1][2-2]

Initially, Ross asked Bates specific questions without revealing the nature of the project, but when Bates insisted, Ross told him about Silk Road. Bates offered him some help but distanced himself, citing concerns over the site being targeted by law enforcement.[2-3]

Richard Bates
(Facebook)
That stranger provided the needed help and eventually took control of the site entirely.
As time went on, Ross became more stressed and overwhelmed by the Silk Road project[2-4][2-5] and turned to an online anonymous stranger he met through the site. “I had discovered a big vulnerability in the way he had configured the main Bitcoin wallet that was being used to process all the deposits and withdrawals on the site,” the stranger stated in a later interview.[2-6] “At first he ignored me, but I persisted and gained his trust by helping him secure the wallet. From there we became close friends working on Silk Road together.”
That stranger provided the needed help and eventually took control of the site entirely. “It was a transition that took some time,” he said, “I was in his corner from early on and eventually it made sense for me to take the reins.” On November 11, 2011, Ross informed Bates of this transition.[2-7] As he told him in an online chat, “glad that’s not my problem anymore.”[2-8]

Then, on February 6, 2012, the new owner of Silk Road announced his screen name as “Dread Pirate Roberts” (DPR), a character from the film The Princess Bride, who passed his name and identity on to his successors.[2-9] By doing so, he became the focal point of the government’s investigation into Silk Road.

3. Targeting Karpeles


“This case is the birth of law as applied to our digital future. Watch it as a spectator at your peril.”
– Scott H. Greenfield, Criminal Defense Attorney


The investigation began when Homeland Security Investigations (HSI) agent Jared Der-Yeghiayan (pronounced der-yeh-gan) began to intercept unusual packages at Chicago O’Hare airport in June 2011.[3-1] The packages were unusual, not only because they contained drugs, but because they used sophisticated packaging methods to avoid detection, yet contained only personal use amounts.[3-2] Der-Yeghiayan has never revealed how he first learned about Silk Road nor how he linked these seizures to it, but he eventually made “approximately 50 or more” purchases from the site and tested the purity of the drugs he received.[3-3]
Jared Der-Yeghiayan
(illustration: Susie Cagle)
Having discovered Silk Road, Der-Yeghiayan began digging further. He read all he could find online and discovered that “[it] first became known through an online user by the name of ‘silkroad’…on [bitcointalk.org].”[3-4] The user signed his messages “Silk Road staff” and referenced a website called silkroadmarket.org. This website was not Silk Road itself, which was accessible only through Tor, but rather an ordinary website with information about how to use Tor and access Silk Road.[3-5] When he looked to see who the website was registered with, Der-Yeghiayan found the name and address of his first lead. However, the information was fake and did not show up in any public or law enforcement databases.[3-6] Determined, Der-Yeghiayan kept digging and found that the domain name server that the silkroadmarket.org URL was registered with was called XTA.net. He then found through a subpoena that XTA.net was registered to Mutum Sigillum, a company owned and operated by Mark Karpeles.[3-7]
A Frenchman living in Japan, Karpeles was the owner of Mt. Gox which, as the only major Bitcoin exchange market at the time, handled the vast majority of Bitcoin exchange transactions. As Bitcoin was the only payment method on Silk Road, this piqued Der-Yeghiayan’s interest. Karpeles owned, operated, and administered “hundreds of websites” and was “a self-proclaimed computer hacker.”[3-8] He was also an experienced computer programmer, specializing in Bitcoin and development of e-commerce websites, “[making him] well-suited to operating a…site such as the Silk Road.”[3-9]

Der-Yeghiayan unearthed everything he could about Karpeles and his associates. He learned that Karpeles had acquired Mt. Gox around the time that Silk Road was started. Karpeles “had a strong motive to create a large underground marketplace where bitcoins would be in high demand. The Silk Road…was uniquely suited to his purpose…Because there are few legitimate vendors who accept bitcoins as payment, it is widely believed that the rise of Bitcoin has been driven in large part by their use on Silk Road.”[3-10]

Mark Karpeles
(Reuters)
Der-Yeghiayan had identified multiple accounts belonging to the Silk Road operators that contained bitcoins worth millions of U.S. dollars.

Der-Yeghiayan also managed to turn a confidential informant against Karpeles, someone who had worked for him “within the past two years.” This informant revealed that Karpeles owned and operated “bitcointalk.org—the same discussion forum where Silk Road was first publicized.”[3-11] From visiting the forum Der-Yeghiayan knew “that [it] operate[d] on a software platform known as Simple Machines,” and “that this same software platform [was] used to operate the discussion forums included on the Silk Road.” He noted that “Simple Machine forum software was not widely used by forum administrators. Thus, the fact that the software [was] used to operate both the discussion forum on bitcointalk.org and…on Silk Road indicates that the forums were likely set up by the same administrator—that is, Karpeles.”[3-12]

As Der-Yeghiayan connected the dots, he found another indication of what looked like Karpeles’s involvement. One of Karpeles’s websites, tuxtelecom.com, included “a tutorial…constructed using ‘Mediawiki’ and a specific version of this software, version 1.17.″[3-13] He also found that “silkroadmarket.org…and…Silk Road…also contain[ed] pages constructed using…the same version of the same software used to create the ‘wiki’ page on…tuxtelecom.com.” He reviewed the Mediawiki website and found that “the Mediawiki software [was] regularly updated and…many versions have been released over time. Thus, the fact that the exact same version of the software was used to create the ‘wiki’ page on tuxtelecom, silkroadmarket.org and…Silk Road…indicates, again, that the same administrator—Karpeles—was responsible for creating all three of these sites.”[3-14]
In fact, Karpeles had moved both silkroadmarket.org and tuxtelecom.com “repeatedly and simultaneously…to different IP addresses.” This showed that “Karpeles controlled the [websites] and that he hosted them both at IP addresses he controlled.”[3-15]

By April 2012, Der-Yeghiayan had “identified multiple…accounts belonging to the Silk Road operators” that contained bitcoins worth “millions of U.S. dollars” and linked them back to Karpeles and one of his associates, Ashley Barr.[3-16] He had found “strong ties between those controlling the bitcoin markets and those operating the Silk Road.”[3-17] A Canadian with a Computer Science degree, Barr was Karpeles’s “right hand man.” He wrote like DPR and shared “the same viewpoints.”[3-18] For Der-Yeghiayan it clicked: Karpeles was “the mastermind behind keeping [Silk Road] secure and operating” and Barr was the spokesman and “voice” of DPR.[3-19] “We’re going right for the admin and his money,” he wrote in an April 20th email.[3-20]

Ashley Barr
(Reddit)
On July 6, 2012, Der-Yeghiayan summarized his findings and submitted them in a report that could be seen by every HSI office in the country and their coordinating office known as “C3.”[3-21]

4. Fighting for Control


“Ross’s case is so important to our country’s future and the future of Liberty itself. When somebody has been singled out the way Ross has been, to be made an example of, for a purely political case, that’s a serious problem.”
– Jeffrey Tucker, Editorial Director, American Institute for Economic Research


Only a few days after Der-Yeghiayan submitted his report, Michael McFarland, lead Silk Road investigator at HSI Baltimore, submitted a draft proposal to HSI headquarters. In it, he told all offices that he was “the [point of contact] for all domestic Silk Road related investigations.” Seeing that McFarland had developed virtually no information on Silk Road, Der-Yeghiayan “rewrote [the] draft to state that [he was].”[4-1] McFarland then went directly to C3 and “pitched [his] case as the only Silk Road investigation HSI has…and wanted their support.” Looking into it, C3 found that Der-Yeghiayan “had a much longer and…diverse investigation on the Silk Road,” and called Der-Yeghiayan to a meeting to brief them on it.[4-2]

At the meeting, Der-Yeghiayan told them that he had tracked down the Silk Road administrator, Mark Karpeles. Unbeknownst to Der-Yeghiayan, McFarland intended to co-opt his investigation into Karpeles and had informed C3 of his plans to “travel to [a] foreign country to interview [him].”[4-3]

In early August, Der-Yeghiayan wrote McFarland outlining the “large list of information” leading him to Karpeles and Barr as the ones behind Silk Road and DPR.[4-4] Because Der-Yeghiayan knew that pursuing Karpeles and Barr without tipping them off would be extremely difficult, he told McFarland “not to share the information with the rest of [his]…task force.”[4-5] He “didn’t want anybody reaching out to Karpeles” because he was “worried that if someone…did something, that Karpeles might find out.” He warned McFarland that Karpeles “closely monitors…all of his websites,” which “appeared to be fronts” that he “is actively tracking.” And “if someone went on and wasn’t sufficiently disguised, then [Karpeles] might recognize it as law enforcement,” and it would tip him or someone he works with off to the investigation.[4-6]
A few weeks later, C3 called both offices to a meeting to settle the turf war between them. After each side presented its case, Debra Note, one of the managers overseeing the meeting, noted the “confusion and odd approach to the HSI Baltimore investigation.” She asked Der-Yeghiayan if McFarland’s investigation was “interfering with [his] case.” He “expressed deep concern for [McFarland’s] tactics and the lack of focus in [his] investigation.”[4-7]
Unbeknownst to Der-Yeghiayan, McFarland intended to co-opt his investigation into Karpeles.
Steven Snyder
(Twitter)
By the end of September 2012, a new agency—Baltimore’s Drug Enforcement Agency (DEA)—had also gotten involved. Der-Yeghiayan pulled up their records and found that they “mirrored exactly” his. Upset, he asked McFarland if he had shared his investigation with the DEA and the rest of the Baltimore task force.[4-8] McFarland said he had, having disregarded Der-Yeghiayan’s request not to. Der-Yeghiayan expressed “serious concern” but was brushed off.[4-9]

The following day, Steven Snyder, HSI Baltimore’s Certified Undercover (CUC) program manager, told Der-Yeghiayan that McFarland was once again trying to monopolize the Silk Road investigation, this time by registering it in Baltimore’s CUC program. Snyder refused to allow this “because it was clear to him that [McFarland] was copying [Der-Yeghiayan’s] case, and there could only be one CUC program over the target website.”[4-10] Yet, within a few weeks, Snyder reversed his decision and approved McFarland’s as the sole investigation, even though McFarland had been dropped by C3 from the CUC program the previous month.[4-11]

At this point, McFarland began demanding all Der-Yeghiayan’s information on Karpeles, saying they were “trying to work him.” Der-Yeghiayan refused, telling McFarland “to not work [Karpeles] independent of HSI Chicago.”[4-12] By October, Der-Yeghiayan discovered that McFarland had “shared all of HSI Chicago’s information on Karpeles with members of [his] task force,” including an “IRS agent, DEA agent and SS agent.” Further, McFarland had “issued multiple subpoenas…and had actively worked [Karpeles] to include a type of surveillance,” all without Der-Yeghiayan’s knowledge.[4-13]

5. Going Rogue


“This case isn’t about Silk Road, it is about the future of Internet freedom, autonomy, and privacy.”
– Carla Gericke, Candidate for New Hampshire Senate


It was later discovered that McFarland had leaked investigation details to two Baltimore agents who, using theft, extortion and other means, had enriched themselves through their involvement in Silk Road. These agents “sought deliberately to undermine the integrity of the ongoing…investigation.”[5-1] One was DEA agent Carl Mark Force. The other was Secret Service agent Shaun Bridges, who was on a “joint-duty assignment with the National Security Agency [NSA]” at the time.[5-2]

Seven months into his Silk Road investigation, Bridges “went rogue” as McFarland would later call it, and secretly seized $2 million from Karpeles’s Wells Fargo account, which Karpeles was using in the operation of Mt. Gox.[5-3] Bridges did this to alert Karpeles that “the U.S. government had him on its radar”[5-4] and “the walls were closing in on them,” so they could avoid prosecution.[5-5] It is still unknown what involvement Bridges had with Karpeles in the preceding months, but Bridges issued “this seizure warrant…because he didn’t want a criminal case to proceed.” If the U.S. government obtained Mt. Gox records, “they might see his…name on them” and discover his misdeeds. Not surprisingly, two days before he seized Karpeles’s money, “he made sure to get his own money out.”[5-6]

Neither Der-Yeghiayan nor McFarland knew of the seizure because Bridges, in order to execute it, “went behind their back” to Richard Kay, an Assistant U.S. Attorney (AUSA) not associated with the Silk Road investigation.[5-7]

Force and Bridges also went after the bitcoins on Silk Road, but did so in secret so they could keep the money for themselves. According to Force, he pretended to be a drug smuggler for a cartel, gained DPR’s confidence and asked him to coordinate a large sale with one of Silk Road’s top cocaine vendors, a user going by the name “googleyed.” Allegedly, DPR tasked Curtis Green, one of his staff members, with setting up the deal. When approached by Green, googleyed was suspicious of Force’s offer and declined. Green agreed to accept delivery instead and gave Force his home address. There, a SWAT team arrested him once the package was delivered.[5-8][5-9]

Carl Mark Force
(Twitter)
Shaun Bridges
(Forbes)
Curtis Green
(Ars Technica)
Once in custody, Green was interrogated by Force, Bridges and the rest of the Baltimore Silk Road task force and gave them his administrative login.[5-10] Bridges pressured Green to show him how to exploit Silk Road’s system, including how to change passwords and take over accounts. Soon after gaining access to the site, Bridges left the interrogation. He used his new knowledge to hijack and empty the accounts of top Silk Road vendors and move the funds to Karpeles’s Bitcoin exchange, Mt. Gox.[5-11]

However, Bridges did not move the bitcoins directly from Silk Road. He first moved the funds to Green’s Silk Road administrative account. Bridges didn’t simply transfer “21,000 bitcoins out to steal them, he transferred them to…Green’s account…because he wanted to have a suspect. He wanted…Silk Road vendors and users to know ‘Here’s the person who stole my…bitcoins. It’s Curtis Green’.”[5-12]

As Green would later testify: “He set me up to take the fall.” He wanted to “make sure that it was me that did it. So he was “very calculated. It was very well thought out, in my opinion.”[5-13]
Bridges’s plan worked. When it was discovered that the bitcoins were stolen, Green was “immediately accused.” During the interrogation, Justin Herring, the Baltimore AUSA overseeing McFarland, screamed at Green, “Come on! We know you stole it! We know you did it!”

Green then got pulled aside by an agent, who coaxed him to confess: “Come on. They’re the bad guys,” he told him.

“I…I wish I could,” Green kept saying. “It doesn’t make sense for me to steal the money, the bitcoins. If I was that type of person, why would I steal it the night that I am in front of 15 agents? I…wouldn’t I have done it the week before in the comfort of my home?” He couldn’t believe they were accusing him. “It made no…sense to me whatsoever…it blew my mind.”

Justin Herring
(Linkedin)
His interrogators threatened to tear up Green’s cooperation agreement and send him to prison. “We don’t think you’re telling the truth,” Herring told him, “and since you lied to us, we’re going to take that away.” Green, a father and grandfather, “begged them for a lie detector test,” but Force “kiboshed [that] every time.”[5-14]
Bridges used his new knowledge to hijack and empty the accounts of top Silk Road vendors and move the funds to Karpeles’s Bitcoin exchange, Mt. Gox.
According to the government, Force and Bridges also duped DPR into believing that Green was behind the theft. Allegedly, DPR then went to Force, still thinking he had cartel connections, and asked him to track Green down and retrieve the vendors’ money. Force agreed and, with Green already in custody, played along and pretended to catch Green and kill him.[5-15]

It is unknown, however, if DPR was actually involved at all because the evidence for this entire incident came from Force himself after he and Bridges had infiltrated Silk Road. They had the ability to fabricate the whole thing. “When I saw the [murder-for-hire] transcripts,” Green said in a later interview, they were “[in line with Force’s] narrative, exactly what he portrayed. So was it there or did they put it there? I don’t know.”[5-16]

Force and Bridges went on to extort DPR on other occasions, using pieces of Der-Yeghiayan’s investigation as leverage, along with threats of exposure and death. In one instance, they messaged DPR using the name “DeathFromAbove” and told him they had identified him and were going to take revenge for having Green killed. Eventually, they settled for extorting him.[5-17]

Another time, under the name “French Maid,” the two corrupt agents tried to sell DPR “information concerning the government’s investigation into the Silk Road.” Force, out of habit, signed one of his messages with his first name “Carl.” To cover this up, he later said his name was “Carla Sophia,” a Silk Road user with “many girlfriends and boyfriends on the site.”[5-18]

These and other schemes netted the pair at least 23,984 bitcoins, although it is unknown how many remain hidden.[5-19][5-20]

6. Thwarting Der-Yeghiayan


"This case is also very much about the future of privacy and surveillance, and sets some dangerous precedents for those who want to open digital marketplaces or use digital currencies."
- Stephen Duke, Students for Liberty, North American Events Manager


By this time, Der-Yeghiayan’s investigation was derailed, leaving him with no seizures and Karpeles scrambling to escape the government’s pursuit. However, Der-Yeghiayan was sure he had his man and continued to doggedly pursue him.

On May 17, 2013, a conference call occurred among Der-Yeghiayan and AUSA Krickbaum from Chicago, McFarland and AUSA Herring from Baltimore, and AUSA Kay (who had helped Bridges go rogue and seize Karpeles’s money). During the call, Kay stated he was “trying to work on an interview with [Karpeles].” Krickbaum asked “what the purpose of the interview was.” Kay replied that he “wanted to know more about [Karpeles]’s money business and…to ask him directly about his knowledge of Silk Road.” Der-Yeghiayan “expressed serious concern over that approach and…[over] Kay using [his] information developed on [Karpeles] for [his] own use.” Kay agreed to “hold off for several months…while [Der-Yeghiayan] prepare[d] [his] indictment.”[6-1]

Even with Kay's assurance, Der-Yeghiayan was worried that he would go behind his back again and expressed this to McFarland. McFarland reassured him that “he had complete control over…Kay and he was the one to decide whether or not [Karpeles] would be interviewed,” that “he would honor…Der-Yeghiayan’s request to not pursue or interview [Karpeles].”[6-2]

On another conference call two months later, “Der-Yeghiayan specifically asked…Herring if there were any developments with [Karpeles] and…Kay, specifically if there were any more talks about meetings.” Herring said, “there was not.”[6-3]

Once again, Der-Yeghiayan’s trust in his colleagues was misplaced. Unknown to him, they were working out their own deal with Karpeles. In fact, on July 8th, the day before telling Der-Yeghiayan there would be no meeting, “Herring was notified by…Kay that a face-to-face meeting was going to take place between him and [Karpeles]’s attorney.” Neither Kay nor Herring notified Der-Yeghiayan or told him about the meeting when he specifically asked.[6-4]

All the Baltimore attendees remained silent, despite knowing that a meeting had just taken place with Karpeles’s attorneys.

Two days later, “Kay met in person with [Karpeles]’s attorneys.” During the meeting, Karpeles’s lawyers “brought up Silk Road and stated that [Karpeles] was willing to tell them who [he] suspects is currently running the website in order to relieve [him] of any potential charges.” Kay then proceeded to arrange a meeting overseas with Karpeles himself. That same evening, Der-Yeghiayan met with McFarland and Herring in preparation for a coordination meeting the next day, yet still neither mentioned the meeting planned with Karpeles or his lawyers.[6-5]

Christopher Tarbell
(Youtube)

At the coordination meeting, yet another law enforcement office was brought in: FBI New York, represented by their lead investigator Christopher W. Tarbell and Southern District of New York AUSA Serrin Turner, along with “multiple DOJ…and CCSIP attorneys.”[6-6] Tarbell brought an important piece of the government’s investigation to the table: the location of the server hosting Silk Road. It was in Iceland and Tarbell said he was seeking a copy of it from the Reykjavik Metropolitan Police.[6-7] Force and Bridges now had "reason to fear that any communications between [themselves] and DPR would be accessible to [Tarbell]."[6-8]

Der-Yeghiayan briefed his entire case to the group and once again identified Karpeles as their “main target” and the man behind DPR and the Silk Road. The CCSIP attorney overseeing the meeting asked if “any other office had any case on [Karpeles].” All the Baltimore attendees, including McFarland, Herring, Herring’s supervisor, and Bridges, “all remained silent,” despite knowing that a meeting had just taken place with Karpeles’s attorneys the day before. The CCSIP attorney went on to say that, “since the information [Der-Yeghiayan] shared was brought in good faith, that no other office should attempt to pursue [Karpeles].”[6-9]

7. Being Wonderful


"The Silk Road and case of Ross Ulbricht speak to some of the most important and contentious issues of our day: citizen's rights in the digital age, government surveillance and overreach, and the often extreme and unfair sentences in cyber-related criminal cases."
- Alex Winter, director of Deep Web


With the Silk Road server location in hand, there was “a lot of pressure” from the “U.S. Attorney’s Office” to find DPR and take down the site.[7-1] Der-Yeghiayan redoubled his efforts, knowing he’d lose Karpeles if he did not arrest him before the site was taken down. To this end, he and another HSI agent created a new identity on the Silk Road forum named “mr.wonderful.” Mr.wonderful then approached the forum administrators who regularly spoke with DPR in an attempt to turn them into informants. One admin, "cirrus," was “compromised by [mr.wonderful]” and recruited to cooperate “against the site and DPR.”[7-2]

Eventually, Der-Yeghiayan took over the cirrus account. As DPR’s employee, he interacted with him daily, in search of any clue he could use to expose him. Once again, Der-Yeghiayan mistakenly entrusted his colleagues in Baltimore with knowledge of this operation and one of them took advantage of it with a scheme of their own.[7-3] It remains unknown if this person was Force, Bridges, Kay, several working together, or someone else entirely, but whoever it was created an account named “notwonderful” and contacted DPR.

In the following months, notwonderful sold DPR intimate details pertaining to the investigation.

Notwonderful told DPR “he could provide real-time information and analysis regarding the federal investigation of [Silk Road] and DPR.”[7-4] In the following months, notwonderful sold DPR intimate details pertaining to the investigation, including details of Der-Yeghiayan’s mr.wonderful operation. “There is a fixation on somehow penetrating or compromising your moderators” through “bribing or threatening [them] into providing access to a staff account,” he told DPR.[7-5] “They seem to be under pressure to get someone of great importance to show a win for USA.”[7-6] Notwonderful outlined the agencies going after DPR:

“I’m trying to warn you. The DEA, ICE, POSTAL INSPECTOR, NSI, FBI, CIA, NSA are itching to get credit for your arrest.”[7-7]

DPR paid notwonderful in bitcoins every week for ongoing updates on the investigation.[7-8]

“I’m trying to warn you. The DEA, ICE, POSTAL INSPECTOR, NSI, FBI, CIA, NSA are itching to get credit for your arrest.”[7-7]

DPR paid notwonderful in bitcoins every week for ongoing updates on the investigation.[7-8]

8. The Setup


"Ross Ulbricht was framed. The Feds who framed him broke a lot of laws and made a complicated mess."
- Catherine Fitts, Assistant Secretary of Housing under President George H.W. Bush


Eventually, Herring informed Der-Yeghiayan about the meeting Kay had with Karpeles’s attorneys and the plans to meet with Karpeles himself. Once again Der-Yeghiayan told Herring that he did not want him to pursue Karpeles or meet with him, that it would damage his ongoing investigation.[8-1] But by now Der-Yeghiayan had lost control, and Karpeles was already working closely with Baltimore. Kay “changed the meeting location to Guam,” widely known as an NSA stronghold.[8-2] Der-Yeghiayan “continued to express deep concern over this meeting and its effect on [his] investigation against [Karpeles],” but “Herring did not appear concerned or willing to stop [it].”[8-3]

Unbeknownst to Der-Yeghiayan, his colleagues in Baltimore and New York had already determined that Karpeles would not be the target. Force and Bridges learned in advance that “law enforcement intended to make an arrest of DPR…, thereby giving [them] ample time to work [him].” This allowed DPR to “formulate and implement…an escape plan that…incriminated [Ross].”[8-4][8-5] Exactly what Karpeles told Kay remains unknown, but it is established that he offered Kay someone to target as DPR instead of himself in exchange for legal immunity.[8-6]

Ross was the “perfect fall guy because, after all, Silk Road was his idea,”[8-7] and he trusted DPR enough to hand his creation off to him early on.[8-8][8-9]

Exactly what Karpeles told Kay remains unknown, but it is established that he offered Kay someone to target as DPR instead of himself in exchange for legal immunity.

It would take just over two months after Karpeles met with Kay for the government to apprehend Ross.[8-10] As stated in court documents, "with pressure mounting toward the end of 2013—because the government had access to Silk Road’s...servers…but permitted the site to continue operating...—[they] seized on [Ross] as DPR, thereby letting [Karpeles] escape justice and leave [Ross] as the wrongfully prosecuted culprit.” Just as Bridges had set up Green to take the fall for his theft, Ross was set up to take the fall for the entire operation of Silk Road. DPR, who “purchased and was leaked information about the government’s investigation of Silk Road, framed [Ross] to absorb the consequences.”[8-11]

In order to issue subpoenas and warrants and ultimately indict Ross, the government had to provide an explanation of why he was DPR and how they found him. Known as parallel construction, this is a tactic used by law enforcement “as a means of disguising how an investigation began.”[8-12]

In Ross’s case, the government’s explanation was that a forum post containing Ross’s email address was suddenly discovered on Karpeles’s website, bitcointalk.org, by IRS agent Gary Alford, using a simple date restricted Google search. Despite Der-Yeghiayan’s tireless and lengthy Silk Road investigation and his finding that the first posting about Silk Road appeared on Karpeles’s forum on March 1, 2011 by a user named "silkroad," Alford claimed he found evidence of an even earlier post, dated January 29, 2011 by a user named "altoid."[8-13]

Gary Alford
(BBC)

Alford’s official story defies belief. Finding Ross's email address this way was like finding a needle in a haystack the size of the internet. It was a task that scores of investigative journalists, extortionists, hackers, and numerous law enforcement agencies had tried and failed at for years.[8-15] On the other hand, if he was provided with the information in advance, it would have been like finding the needle with a high-powered magnet.

With Ross’s email address in hand and an explanation linking it to Silk Road, all that remained was tracking down his physical location.

Ross was the perfect fall guy because, after all, Silk Road was his idea, and he trusted DPR enough to hand his creation off to him early on.

However, Alford couldn’t have found this earlier post because it didn’t exist. Rather, he testified that he found a quote of this post within another user’s post talking about Silk Road. Alford then said he found a subsequent post by altoid dated October 11, 2011 that appeared to be a help wanted ad for a Bitcoin startup company that listed the contact information “rossulbricht at gmail dot com.[8-14] According to the government's version of events, this post is what led them to suspect that Ross was behind Silk Road. However, it would have been simple for Karpeles, or anyone else with high level access to bitcointalk.org, to plant this information.

9. Closing In


"The government can use an email address or phone number, without a warrant, to get an IP address to go into the database and 'scarf up' everything about the user."
- William Binney, former high-level NSA official turned whistleblower


Serrin Turner
(Youtube)

Just ten days before his arrest, Secret Service and FBI agents, and Turner, the New York prosecutor, used a combination of technologies to intercept and collect Ross’s internet traffic information. These technologies fall under two categories: pen registers and trap-and-trace devices, which collect outgoing and incoming data respectively. Together, they are known as a “pen-trap.”

Turner first collected, without a warrant, all outgoing data from Ross’s email address in search of the Internet Protocol (IP) addresses being used to access the account. (An IP address is a unique number used on the Internet that allows data to be routed between connected devices).[9-1] Turner discovered one particular IP address being serviced by Comcast. He subpoenaed Comcast to reveal the home address of the subscriber, which turned out to be a row house in South San Francisco where Ross was renting a room.[9-2]

Having physically located Ross with nothing more than his email address, Turner then remotely attached a pen-trap to the wireless router in Ross’s living room.[9-3] This pen-trap collected all internet traffic traveling through Ross’s home router. In that traffic, he discovered the MAC address of Ross’s laptop and attached a pen-trap to it, too. This gave him the ability to geolocate Ross and collect all his internet traffic information, regardless of where he went.[9-4]

Turner never obtained a warrant for any of these searches and seizures. Alford’s story was not nearly enough to establish probable cause, the standard necessary for securing one. Instead, Turner relied on the Third-Party Doctrine, an outdated legal theory established in 1979 that says that individuals relinquish their privacy rights to the phone numbers they dial because they have voluntarily given them to the telephone company.[9-5] According to Turner, government agents can secretly rummage through everyone’s internet traffic information without restraint, just as he did to Ross, because it is sent through an internet service provider, or third party.

"Something as socially, politically, and personally important as website browsing history requires updated consideration of privacy rights by this Court before the government is given license to search it without probable cause," the National Lawyers Guild wrote to the Supreme Court, challenging this violation in Ross's case.[9-6]

In that traffic, he discovered the MAC address of Ross’s laptop and attached a pen-trap to it, giving him the ability to geolocate Ross and collect all his internet traffic information, regardless of where he went.

The Cato Institute and Reason Foundation argued that, "The government’s warrantless collection of the IP addresses a citizen visits is analogous to a government agent peering through the window to monitor which books a person pulls from their shelf."[9-7] This power "effectively gives the government a blank check to conduct a dragnet search of Internet activity."[9-8]

With Ross’s internet data, Turner was able to gather enough circumstantial evidence to suggest that Ross was logging on and off at times similar to when DPR was logging on and off. This was enough to secure an arrest warrant.[9-9]

10. New York Takes Over


"The government did not produce a single witness to testify firsthand that Ulbricht authored any of the communications attributed to DPR. It was all digital, created and transmitted on an anonymous, untraceable internet network."
- Joshua Dratel, criminal defense attorney


Der-Yeghiayan, still the most senior and experienced Silk Road investigator, was not convinced that Ross was DPR. Despite Alford’s story, he continued to believe Karpeles was behind Silk Road. After two years and "thousands" of hours of investigation, time was running out to indict him before the site was taken down and Ross given the blame.[10-1] Der-Yeghiayan submitted an affidavit attached to a search warrant for Karpeles’s email accounts so he could gather the evidence he needed to convict him.

Ultimately, none of Der-Yeghiayan’s efforts mattered. By the end of September 2013, with Ross’s arrest imminent, he realized that if he’d have anything to show for his years of work, he had to cooperate with the prosecution led by Preetinder Bharara, U.S. Attorney in the Southern District of New York, who was recommended for his powerful job by Schumer and was his Chief Counsel for nearly five years.[10-5][10-6]

As Der-Yeghiayan told his supervisor at Homeland Security, Philip Osborn, “I think there’s room to avoid the drama by instead of dwelling on the past,…talking about how to make HSI in general walk away from this without looking like complete fools.” Baltimore can “easily erase a lot of the damage they’ve done by cooperating with [Bharara].” They can have “sloppy seconds on [Ross] for their murder for hire. They can also have some info on other Bitcoin companies that [Karpeles] might name as shady after we get done with him. That’s the best that can be given and they should consider themselves lucky for getting anything close to that. Or we can just stall, and Baltimore gets nothing and we contributed to [Karpeles and Barr] getting away. We’ll get no HSI banner on the site and will probably get no cooperation from [Bharara] with any information related to [Karpeles]. If [Ross] names [Karpeles] in the interview and we didn’t help them get [Karpeles and Barr] when we had the chance—[Bharara] will leave us out of it and tie him into their conspiracy. We will then be left dealing with…Baltimore’s tears. I think it’s important we help them have a ‘come to Jesus’ moment otherwise our agency loses as a whole. It’s a simple sell if they know the alternative is they will be left with absolutely nothing—no matter how much they whine and complain to HSI HQ, it won’t stop [Bharara] prosecuting all of them without any of us.”[10-7]

Der-Yeghiayan’s investigation of Karpeles had finally ground to a halt. He would never get to examine “any of…Karpeles’s electronic devices, or servers, or any of his other email accounts.”[10-8]

Chuck Schumer
(NNWO)
Preetinder Bharara
(Bloomberg)
With Ross’s arrest imminent, Der-Yeghiayan realized that if he’d have anything to show for his years of work, he had to cooperate with the prosecution led by Preetinder Bharara.

He swore under oath: “I believe that Karpeles has been involved in establishing and operating the Silk Road website.” He has “participated in a conspiracy to distribute narcotics…in violation…of United States Code." Further, “by operating…Mt. Gox, while knowing that a large volume of its business derives from narcotics trafficking activity conducted through Silk Road, Karpeles has violated U.S. money-laundering laws.”[10-2] I believe that “the [email] accounts will contain communications between Karpeles and the co-conspirators involved with him in committing the subject offenses.”[10-3] Turner would go on to seal Der-Yeghiayan’s warrant against public scrutiny stating that, if made public, it would alert Karpeles to “law enforcement interest” and that “notification of the existence of this order will seriously jeopardize [the] investigation.”[10-4]

11. The Arrest


"The prosecution’s forensic evidence was below amateur level. The tools used were bad choices, and when the metadata...are exactly the same for every file, it’s inescapably clear that they’ve been altered. To then submit them as evidence is laughable… or would be if so much wasn’t at stake."
- Paul Rosenberg, Author, Engineer, Consultant to NASA and U.S. Military


By this time, DPR had convinced Ross to get involved with Silk Road again and given him access to some of the DPR accounts, along with many of the files, software, and records being used to run it. Everything Bharara and Turner needed to make a case against Ross was on his laptop, including a Bitcoin wallet with over 144,000 bitcoins.[11-1]

On October 1, 2013, the day of his arrest, Ross was in his local library downloading The Colbert Report.[11-2] Plainclothes agents were watching him, and Der-Yeghiayan was across the street in a cafe, logged on as cirrus. Der-Yeghiayan “initiated a chat” to DPR’s account, which popped up on Ross’s screen, now that he had access to it.[11-3] Der-Yeghiayan needed Ross to log onto DPR’s Silk Road account so the arrest team could claim that he was DPR at the time of his arrest. To do this, he messaged that he was having difficulty with the admin tool he used to remove inappropriate flagged listings on Silk Road.

Undercover agents immediately created a diversion while others tore Ross’s laptop from him and handcuffed him.

In response, Ross logged in and waited for the page to load as it bounced through the Tor network. Having little knowledge of the inner workings of DPR’s enterprise, Ross messaged cirrus, “You did Bitcoin exchange before you started working for me, right?,”[11-4][11-5] something the real DPR would have known, having chatted and worked with cirrus for many months. Once Ross logged in, undercover agents immediately created a diversion, while others tore Ross’s laptop from him and handcuffed him.

Thomas Kiernan
(Kurtis Productions, CNBC)
At the arrest scene was FBI agent Thomas Kiernan. He was the first to take possession of the laptop and immediately started punching commands into the computer.[11-6] He plugged his USB drive in and began copying files without producing digital fingerprints,[11-7] which are unique snippets of data that would have ensured the copies matched the originals.[11-8] By doing so, he overwrote some of the metadata for those files unnecessarily.[11-9]

Kiernan “triaged” the laptop in the library for one or three hours (depending on when he was asked),[11-10][11-11] then he “transported” it to Ross’s house about eight blocks away.[11-12] All that time, Kiernan was in sole possession of the laptop with nothing more than a few photos from his phone to document what he did with it.

At Ross's house, agents found two USB drives with Silk Road files on them and a crumpled piece of paper with notes about Silk Road's vendor review system.[11-13] At this point, Kiernan turned the laptop over to Christopher Beeson of RCFL, a private contractor in San Francisco.[11-14] Beeson also overwrote metadata by creating tar archives (similar to zip files) of commonly used directories on the laptop.[11-15] He later admitted he was not familiar with the Guidelines for Evidence Collection and Archiving which clearly states not to run programs like tar that modify metadata.[11-16][11-17] During the tar process, Beeson was stopped by a failure[11-18] he was never able to determine the cause of, nor could he confirm he had properly copied the files.[11-19][11-20]
By this time it was almost 8pm. Beeson stopped what he was doing and attempted to make a copy of the laptop’s hard drive using “dd,” a “powerful tool” colloquially referred to as “disk destroyer” because, if misused, it can cause irreparable harm to the data being manipulated.[11-21] He ran dd several times while trying to generate a digital fingerprint, but it "kept failing."[11-22] Eventually, Beeson just skipped the fingerprinting altogether and made a “copy” that didn’t match the original.[11-23]

Der-Yeghiayan reviewed this “copy” all that night and into the next morning and continued to find evidence of Karpeles’s “involvement and associations to Silk Road.” “[Karpeles] is purging everything after [Ross’s] arrest,” he wrote to Alford and Turner. “I know he was initially involved.”[11-24][11-25] Der-Yeghiayan continued to submit reports to them on Karpeles’s finances and communications, but to no avail. In fact, the government continued working with Karpeles after Ross’s arrest, as Der-Yeghiayan learned that even more “information was passed from [Karpeles] to Baltimore.”[11-26]

Christopher Beeson
(Linkedin)
On October 3rd, two days after the laptop was initially seized, Beeson turned his attention to the data in the laptop's RAM.[11-27] What happened to the computer over those two days remains unknown, but again there were problems.[11-28] First, Kiernan and Beeson had overwritten or modified the data with all they had done up to that point. Also, Beeson wasn’t "quite sure how to do [the] RAM capture” and had to ask for assistance and look up documentation.[11-29][11-30] He tried anyway and “crashed the computer,” losing unknown information and locking the laptop behind encryption.[11-31]
All evidence used against Ross from the laptop was a screenshot of a copy of a “copy” that never matched the original.
How true the "copy” Beeson extracted was to the original Kiernan seized is unknowable. Nor can it be known what exactly Kiernan did with the laptop before handing it over to Beeson or what data was lost when Beeson crashed the computer. It is indisputable, however, that the laptop was not handled professionally. Both agents ignored “order of volatility” guidelines,[11-32] overwrote data unnecessarily,[11-33] and used obsolete and unreliable methods.[11-34] Files used in the government's case against Ross were modified as much as "six hours after [his] arrest."[11-35] Not one photo taken by Kiernan or Beeson to document their work showed the correct time.[11-36][11-37] Yet, all this evidence was admissible at trial.
Beeson eventually sent Kiernan, who was now in New York, the “copy” he had made of the laptop’s hard drive and the laptop itself,[11-38] which Kiernan called a useless “brick.”[11-39] Kiernan made another copy of Beeson’s “copy,”[11-40] and Bharara used this as the basis for his case against Ross. All evidence used against Ross from the laptop was a screenshot of a copy of a “copy” that never matched the original.[11-41]

Two years after he called for the shutdown of Silk Road, Schumer finally got what he wanted. The site was taken down on October 1, 2013, and Bharara ensured that Ross would be prosecuted in New York instead of California where he lived and was arrested.[11-42] Ross spent the next six weeks in solitary confinement, first in San Francisco and then in New York, while the government combed through the data Kiernan and Beeson had collected.

12. Deleting Evidence


"If this back-up of the forum database had not been found; if log-ins made by DPR after Ross’s arrest were not discovered, no one would be the wiser. This begs the question: how much more is there?"
- Lyn Ulbricht, Ross Ulbricht's mother


Sometime after his arrest, and possibly weeks prior, one or more of the few people with access to the evidence in Ross’s case would come very close to removing any trace of the conversation between notwonderful and DPR. That conversation made clear that someone from the Baltimore office was selling DPR information about the government’s investigation. This could have been whoever was behind the notwonderful account, trying to protect themselves, or anyone with high-level access and a vested interest in seeing Ross convicted. The revelation that DPR was being helped by law enforcement could potentially unravel the entire case.[12-1]
The conversation was originally in evidence in several locations. One was the live version on the Silk Road forum, while three others were in backups of the live version that Tarbell made copies of. However, “the dialogue…[could not] be found anywhere in any of these four locations.” All traces of it had been deleted. Miraculously, a fifth copy of the conversation was overlooked by whomever removed the others. It was buried in the four terabytes of evidence dumped on Ross and his legal team. This copy “appear[ed] to be created manually by [a Silk Road] user with administrative privileges…and saved in his home folder on the [Silk Road forum] server.” Whoever tried to cover notwonderful’s tracks didn’t delete this obscure copy and “failed to eliminate all evidence of those communications.”[12-2]
While Ross was still in solitary confinement, locked in a monitored cell with no access to the outside world, let alone the internet, DPR continued to log into his account on the Silk Road forum.
However, even this copy was incomplete because it didn’t contain any of the communications between notwonderful and DPR after it was created in mid-August 2013—even though payments continued until Silk Road was shut down in early October.[12-3] It will never be known what information was sold to DPR in those crucial six weeks leading up to Ross’s arrest.

DPR made a critical mistake around this time. While Ross was still in solitary confinement, locked in a monitored cell with no access to the outside world, let alone the internet, DPR continued to log into his account on the Silk Road forum, which was still running until late November after the takedown of Silk Road itself. This is irrefutable evidence that Ross was not the only person with access to DPR’s accounts.[12-4]

13. Fighting for Freedom


"The case comes in, it’s a big splash, it’s all over the news. Almost a year later, these big mean offensive counts get dropped, it’s not a front page story anymore. It’s somewhere in the recesses of the paper. It’s just not a big deal. At that point people already associate the case with murder-for-hire. No prosecutor would ever say that’s what they’re doing, but as a long-term criminal defense attorney, this happens all the time."
- Jay Leiderman, Criminal Defense Attorney


Ross hired New York attorney, Joshua Dratel, to defend him. His first courtroom appearance in New York was presided over by magistrate Judge Kevin Fox, to determine if Ross would be granted bail. Turner, appointed by Bharara as lead prosecutor, claimed at the hearing that Ross was behind the murder-for-hire plot involving Green and brought up information from the laptop about five other murder-for-hire attempts. Dratel was ambushed late the night before with this allegation, giving him no time to consult with Ross or prepare a defense. After using them to deprive Ross of bail, Turner dropped these allegations and never brought them to trial. Turner also asserted, without evidence, that Ross might have bitcoins stashed away somewhere that he could use to fund an escape. Despite 70 letters to the court attesting that Ross was not a danger or flight risk; $1 million in pledges from many friends and family, including their homes and life savings; and the fact that Ross was a first-time offender,[13-1] Judge Fox denied his Eighth Amendment right to bail.[13-2]

Judge Kevin Fox
Illustration: Telegraph.co.uk
Prior to this case, no internet service provider had been criminally charged for permitting content or even hosting websites that tolerate or even promote illegal activity.
With Ross secure in prison custody, Turner’s first communication with him was a threat. He told Ross that if he didn’t plead guilty to the charges he was arrested for, which would force him to spend a minimum of ten years in prison, then Turner would add the kingpin charge, raising the minimum to twenty years.[13-3] Either way, Turner said he would recommend that the judge sentence Ross to life in prison without parole. The judge was Katherine Forrest, District Court Judge in the Southern District of New York, who had been officially recommended to the bench by Schumer. [13-4] Ross refused to cooperate with Turner and was indicted on February 4, 2014, beginning the long, arduous process of defending himself against the federal government from within a Bureau of Prisons detention center.
From the outset, Ross and Dratel challenged Bharara’s case on legal grounds. The charges were: conspiring to distribute narcotics and fake identifications, hack computers, launder money, and the promised kingpin charge, typically reserved for drug lords sitting at the apex of a large organization they control with violence.[13-5] Conspicuously absent from the New York indictment was any charge relating to either the murder plot that Force and Bridges staged with Green or the others used to deny Ross bail.[13-6][13-7] The District of Maryland did include Green in a separate indictment, but dismissed it in its entirety nearly five years later.[13-8][13-9]
Dratel argued that these charges have never "been used to prosecute the conduct alleged against [Ross]—that he operated a website through which other persons—sellers and purchasers—committed illegal activity.”[13-10] Congress passed a law to protect providers of “interactive computer services” so they may “operate without fear of civil liability for the content posted by others.” Congress wanted a “free-wheeling internet” that has “flourished, to the benefit of all...with a minimum of government regulation.”[13-11] The law is broadly worded, with a provider needing only to show that “the information…was provided by a third-party” to qualify for immunity.

This is precisely what Silk Road accomplished by design. It was an open platform, like many other e-commerce websites, with decisions about what to sell, at what price, and to whom, left up to the users. This was exemplified by the fact that much more than drugs, fake ids, and hacking software were available on the site. Items exchanged included jewelry, writing services, food, antibiotics, and other legal items.[13-12][13-13]

Judge Katherine Forrest
(Law.com)
In fact, prior to this case, no internet service provider had been criminally charged for “permitting content or even hosting websites that tolerate or even promote illegal activity.”[13-14] Google is the most common defendant in lawsuits where this law has been invoked, and “other major ISP’s and browsers have also regularly availed themselves” of this immunity.[13-15] With “the lack of a single prosecution” of a provider hosting “illegal conduct,” Ross’s case constitutes “arbitrary and discriminatory enforcement.” Indeed, “the gulf between civil immunity enjoyed by all other…providers and the criminal liability and potential punishment [Ross] faces is incalculably vast.”[13-16]
Judge Forrest apparently cared little about this double standard. She accommodated Turner, who argued that “the federal criminal laws are expansive and adaptable, and readily reach…conduct online to the same extent as if it occurred on the street.”[13-17] She acknowledged that “Silk Road was nothing more than code…until third parties agreed to use it.”[13-18] Yet, despite the fact that it was not, she declared that “Silk Road was specifically and intentionally designed for the purpose of facilitating unlawful transactions.”[13-19] By saying this, she equated privacy and anonymity with all things illegal. To make Silk Road illegal as a whole, and not just the specific illegal transactions that occurred on the site, it had to be characterized as a vast criminal enterprise with Ross at the top.
"If I’m selling drugs to one person using my AT&T phone, does that make every other drug seller on AT&T a co-conspirator of mine? Does that make AT&T a co-conspirator? No.”
In her ruling, Judge Forrest falsely claimed that Ross “posted a sign on a (worldwide) bulletin board” that said “I have created an anonymous, untraceable way to traffic narcotics,"[13-20] a statement Ross never posted. She called the website a vast conspiracy saying that because each time someone “signs up and agrees to [Ross’s] standing offer…he or she may become a co-conspirator” and that Ross’s “alleged co-conspirators are several thousand drug dealers” on Silk Road. “Co-conspirators may not know each other’s identity” she continued,[13-21] and the fact that Silk Road was automated “does not preclude the formation” of a conspiracy. “There is no requirement that any words be exchanged at all.”[13-22]

The judge also falsely claimed that Ross designed, launched and operated Silk Road “for the specific purpose of facilitating narcotics transactions that he [knew would] occur.” Analogizing a website host with a mafia boss, she said Ross acted as a “sort of godfather.”[13-23]

Joshua Dratel
(Linkedin)
In court, Dratel argued that companies like AT&T are in the same position. They know “people are using [their network] for drug deals, they’re texting, they’re making calls, I know that, it’s foreseeable to me. If I’m selling drugs to one person using my AT&T phone, does that make every other drug seller on AT&T a co-conspirator of mine? Does that make AT&T a co-conspirator? No.”[13-24]

Ross made several other arguments, clearly showing that the government’s charges could not be applied to the alleged conduct and violated his constitutional rights.[13-25] In spite of this, Judge Forrest allowed the prosecution to proceed, denying the motion “in its entirety.”[13-26]

14. Finding the Servers


"We have become overly aggressive with...our criminal justice system in the U.S. We imprison more people, and apply longer sentences, than any country on the face of the planet. People like Ross should be afforded the opportunity of redemption as soon as possible. For Ross that is now."
- Neill Franklin, Executive Director, Law Enforcement Action Partnership and 34-year police veteran


Ross also challenged the government’s investigation itself. All the subpoenas and warrants used Tarbell's seizure of the Silk Road server as their starting point for probable cause. If the seizure had been done illegally, all subsequent evidence, including the information on the laptop, would be suppressed and the government’s case would fall apart. Ross filed a motion to suppress the evidence unless Tarbell could explain how he found the server.[14-1]
"We believe the FBI is using parallel construction, creating a plausible story of how they found the server to satisfy the courts, but a story that isn’t true."
Tarbell claimed, under oath, that by “examining the individual packets of data being sent back from the [Silk Road] website, [he] noticed that the headers of some of the packets reflected a certain IP address.” When he “typed the…IP address into an ordinary (non-Tor) web browser, a part of the Silk Road login screen (the CAPTCHA prompt) appeared,” thus confirming that the IP address in the headers was the IP address of the Silk Road.[14-2] Tarbell’s explanation was closely scrutinized because Tor is supposed to prevent exactly what he claimed he did. Cyber security experts worldwide, including Robert Graham of Errata Security, Brian Krebs of Krebs on Security, and Nicolas Weaver, researcher at ICSI and Berkeley, were highly skeptical.
“I find it surprising that when given a chance to provide a cogent, on the record explanation for how they discovered the server, they instead produced a statement that has been shown inconsistent with reality, and that they knew would be inconsistent with reality,” Weaver said.[14-3]

Tarbell responded that he didn’t record or save any of his work, violating “the most rudimentary standards of computer forensic analysis.”[14-4] “The details are vague," Graham noted. "It is impossible for anybody with technical skills (such as myself) to figure out what he did.” And the “second problem is that some of the details are impossible, such as seeing the IP address in the packet headers.” Furthermore, “he saved none of the forensics data. You’d have thought that, had this been real, he would have at least captured packet logs or even screenshots of what he did.”[14-5]

Weaver explained exactly why Tarbell’s story didn’t make sense: “The server logs which the FBI provides as evidence show that, no, what happened is the FBI didn’t see a leakage coming from that IP. What happened is they contacted that IP directly and got a PHPMyAdmin page.” But how did they know to contact that IP address in the first place? “The CAPTCHA couldn’t leak in that configuration, and the IP [Tarbell] visited wasn’t providing the CAPTCHA, but instead a PHPMyadmin interface. Thus, the leaky CAPTCHA story is full of holes.”[14-6]

The experts suspected another explanation: “Many of us believe it wasn’t the FBI who discovered the hidden Silk Road server, but the NSA…We believe the FBI is using parallel construction…creating a plausible story of how they found the server to satisfy the courts, but a story that isn’t true,” Graham said. “I am a foremost…expert on this sort of thing. I think Christopher Tarbell is lying.”[14-7]

"Given the massive breadth of the NSA’s dragnet electronic surveillance,” Dratel later argued to the court, “This case is a prime candidate for parallel construction, particularly in light of Silk Road’s exclusive operation on the Internet, and its use of both the Tor network and Bitcoin...as well as the intensity of the government’s multi-year investigation aimed at finding the identity of those operating the website.”[14-8]

According to Reuters, who first revealed the NSA’s practice of parallel construction just two months before Ross’s arrest, law enforcement agents receiving illegal information from the agency “have been directed to conceal how such investigations truly begin—not only from defense lawyers, but also sometimes from prosecutors and judges.”[14-9]

Whether the truth was concealed from Turner or not, he shot down the idea that the NSA was involved: “[Ulbricht] offers no evidence of governmental misconduct to support this sweeping claim. Instead, [he] conjures up a bogeyman—the [NSA]—which [he] suspects...was responsible for locating the Silk Road server.”[14-10] Turner called Dratel’s search for how the servers were actually found “a pointless fishing expedition aimed at vindicating his misguided conjecture about the NSA being the shadowy hand behind the Government’s investigation.”[14-11]

Turner reiterated Tarbell’s explanation which, despite widespread expert skepticism, did satisfy the court. Judge Forrest denied the defense’s Motion to Suppress Evidence and refused to allow an evidentiary hearing to determine the truth.[14-12]

Edward Snowden revealed that the NSA had “worked urgently to target Bitcoin users” in the months leading up to Ross’s arrest.
More than three years later, Edward Snowden revealed that the NSA had “worked urgently to target Bitcoin users” in the months leading up to Ross’s arrest. They used a “program code-named OAKSTAR, a collection of covert corporate partnerships enabling the agency to monitor communications...along fiber optic cables that undergird the internet.” A classified March 8, 2013 NSA memo stated they were using these capabilities in their mission of looking at “cyber targets that utilize online e-currency.” It is hard to imagine a higher priority government target using Bitcoin in 2013 than Silk Road and DPR.[14-13]
It is hard to imagine a higher priority government target using Bitcoin in 2013 than Silk Road and DPR.
In addition, Turner lied to the court about how the government seized the server once Tarbell “found” it. He told the magistrate judge who signed off on the warrants that the U.S. government has a Mutual Legal Assistance Treaty (MLAT) with Iceland, where the server was located, thus giving him the legal authority to seize it. However, Turner later admitted that this “is not technically correct, as the United States does not have an MLAT with Iceland.”[14-14] The legal basis for the warrant appears to have been unimportant to Judge Forrest. She ruled that the defense's “motion to suppress…is DENIED.”[14-15]
In the same pre-trial ruling, Judge Forrest rejected several other challenges to the investigation. Ross asserted his Fourth Amendment right to be secure against unreasonable searches and seizures, saying Turner violated his rights when he tracked him down and, using pen-traps, gathered all his internet traffic information without a warrant.[14-16] Turner also violated Ross’s rights when he did eventually obtain warrants, by sweeping up every scrap of information about Ross and his life, going back over a decade, from his laptop and email and Facebook accounts. His entire digital life was the government’s to examine, despite the Fourth Amendment requiring the government to identify in advance the particular items they seek.[14-17]
At Turner’s insistence, Judge Forrest also explicitly forbade Dratel from conveying to the jury the political and philosophical motivations behind Silk Road, as some jurors might sympathize with those views. The jury was also not to know that Ross could be imprisoned for life if found guilty, in case they found this excessive.[14-18][14-19] Also, at Turner's behest, the judge forbade Ross to acknowledge or smile at his family in the jury's presence, threatening "increasingly necessary measures" should he disobey.[14-20]

In the wake of Judge Forrest’s rulings, the path was cleared for the government to bring Ross to trial.

To be continued...


Next episode will include:
15. The Cover-Up
16. Eviscerating the Defense
17. How Many DPRs?


The information presented above is based solely on the public record and should not be attributed to Ross Ulbricht, Lyn Ulbricht, or anyone connected with freeross.org.


From the Ulbricht family:
Ross was misused by the U.S. justice system, by those who took an oath to act with honor, integrity and support the Constitution. Instead, they won their trophy at the expense of a young man’s life. This cannot stand. Now Ross needs mercy from the President.
Please help us free Ross!

Sign Ross’s petition for clemency.

References

1. Traveling the Silk Road

2. Passing the Torch

3. Targeting Karpeles

4. Fighting for Control

5. Going Rogue

6. Thwarting Der-yeghiayan

7. Being Wonderful

8. The Setup

9. Closing In

10. New York Takes over

11. The Arrest

12. Deleting Evidence

13. Fighting for Freedom

14. Finding the Servers

  • [14-1] - Memorandum of Law in support of Ross’s Pre-Trial Motions to Suppress Evidence, Order Production of Discovery, for a Bill of Particulars, and to Strike Surplusage, August 1st, 2014
  • [14-2] - Declaration of Christopher Tarbell (paragraph 8)
  • [14-3] - Brian Krebs's article, October 2, 2014 ("Silk Road Lawyers Poke Holes in FBI’s Story")
  • [14-4] - Declaration of Joshua Horrowitz (page 2)
  • [14-5] - Robert Graham's article, October 3, 2014 ("Reading the Silk Road configuration")
  • [14-6] - Brian Krebs's article, October 2, 2014 ("Silk Road Lawyers Poke Holes in FBI’s Story")
  • [14-7] - Robert Graham's article, October 3,2014 ("Reading the Silk Road configuration")
  • [14-8] - Memorandum of Law in support of Ross’s Pre-Trial Motions to Suppress Evidence, Order Production of Discovery, for a Bill of Particulars, and to Strike Surplusage, August 1st, 2014 (page 32)
  • [14-9] - Reuters article, August 5, 2013 ("Exclusive: U.S. directs agents to cover up program used to investigate Americans")
  • [14-10] - Memorandum of Law in opposition to Ross's Motion to Suppress Evidence, Obtain Discovery and a Bill of Oarticulars, and Strike Surplusage (page 1)
  • [14-11] - Memorandum of Law in opposition to Ross's Motion to Suppress Evidence, Obtain Discovery and a Bill of Oarticulars, and Strike Surplusage (page 2)
  • [14-12] - Judge Forrest's Opinion and Order in response to the Defense's Motion to Suppress Certain Evidence, July 9, 2014 (page 38)
  • [14-13] - The Intercept article, March 20, 2018 ("The NSA Worked To 'Track Down' Bitcoin Users, Snowden Documents Reveal")
  • [14-14] - Memorandum of law in opposition to Ross's Motion to Suppress Evidence, Obtain Discovery and a Bill of Oarticulars, and Strike Surplusage (page 3)
  • [14-15] - Judge Forrest's Opinion and Order in response to the Defense's Motion to Suppress Certain Evidence, July 9, 2014 (page 38)
  • [14-16] - Memorandum of Law in support of Ross's Pre-Trial Motions to Suppress Evidence, Order production of Discovery, for a Bill of Particulars, and to Strike Surplusage, August 1st, 2014 (page 37)
  • [14-17] - Memorandum of Law in support of Ross’s Pre-Trial Motions to Suppress Evidence, Order Production of Discovery, for a Bill of Particulars, and to Strike Surplusage, August 1st, 2014 (page 48)
  • [14-18] - Government's Pre-Trial Motions in Limine, December 9, 2014 (page 28)
  • [14-19] - DailyDot article, December 16, 2014 ("Silk Road prosecutors want to ban Ross Ulbricht’s libertarian politics in court")
  • [14-20] - Trial transcript, day 6 (pages 1015-1016)