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The Man Behind The Shadowy Illicit Drug Market, Silk Road

Oct 3, 2013
Originally published on October 3, 2013 12:53 pm

It's not every day federal authorities get to bust a case like this. It involves millions of dollars, illicit drugs and a would-be assassin, all of which allegedly were bought and sold on the Internet, in a shadowy online marketplace known as the Silk Road. On Tuesday, federal authorities shut down that site and arrested 29-year-old Ross Ulbricht, the man they say is its mastermind.

Ulbricht, a.k.a. "Dread Pirate Roberts," reportedly was at times sloppy about covering his tracks, attaching his name, photo and personal e-mail address to Silk Road business. That is how federal authorities eventually tracked him down and arrested him, according to the criminal complaint.

We should mention that Silk Road isn't a marketplace everyone could easily get to. It exists away from the World Wide Web, on the encrypted Tor network, in the "deep" or "hidden" web that's only reachable by using anonymizing software. But if you got to Silk Road, it was the largest online marketplace for illicit stuff, where everything from fake IDs to guns and drugs was available.

"It's kinda earned the reputation as the eBay of drugs. I think for a lot of people that's shocking that with a few clicks you could have heroin sent to your door," says Brian Krebs, a cybersecurity researcher and former reporter for The Washington Post. "I don't think it's a good idea. But, that's the reality of the Internet we live in today."

Krebs was first to post the news of the federal bust of Silk Road.

On the Silk Road site, users rely on the online currency Bitcoin to buy and sell illicit goods and services. But if you try to reach the Silk Road now, you'll get this message from the feds: "This hidden site has been seized by the Federal Bureau of Investigation, ICE Homeland Security Investigations and the Drug Enforcement Administration."

In the criminal complaint against Ulbricht and the Silk Road, the FBI says that the website generated some $1.2 billion in sales between February 2011 and July 2013. It alleges that Ulbricht himself earned nearly $80 million in commissions since the site's launch.

"It really was a marketplace, and what the FBI has done is they've taken an invisible marketplace and made it visible," said Mary Galligan, a consultant at Deloitte and the former special agent in charge of cybercrime in the FBI's New York office. "Right now, there are a lot of people around the world saying, 'What did I do, what did I do on the Tor server, especially if I did illegal activity, and who knows about it?' So it's a really significant technical achievement by the U.S. government and the FBI."

Ulbricht is a University of Texas grad who lived in San Francisco and called himself an "investment adviser and entrepreneur." The FBI says he ran Silk Road for more than two years. He is now in custody in San Francisco, charged with money laundering, computer hacking and drug trafficking. According to court documents, he was involved in an even crazier plot — murder for hire.

"One of the services that's available on the Silk Road is hitmen," says Krebs. "You could hire somebody to take out a rival."

Prosecutors say Ulbricht tried to do exactly that — hire someone to assassinate a rival who he feared would out him — for the Bitcoin equivalent of $150,000. Ultimately, there's no evidence anyone did get killed.

"People tend to think that the Internet is different than real life. It really just tends to reflect what's going on in real life," says Krebs. "And in this case, with the Silk Road at least, you have a lot of overlap between the Silk Road and the Internet."

Once Ulbricht's profile became visible, so did his social media tracks. He even recorded an interview with his best friend for the oral history project StoryCorps (which is regularly featured on NPR), and talked about his immortality.

"I think I might live forever, in some form, by that time. I mean, technology's changing so fast," Ulbricht said.

Even if he doesn't live forever, his notoriety could outlast him. Feds seized nearly $4 million worth of Bitcoin in shutting down Silk Road. It's the largest Bitcoin seizure to date.

Read the full criminal complaint against Ulbricht.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

STEVE INSKEEP, HOST:

OK. This next story involves millions of dollars, illicit drugs and a would-be assassin, as well as some trading on the Internet in a shadowy online marketplace Known as the "Silk Road." This week, federal authorities shut down that site and arrested the man they say is its mastermind.

NPR's Elise Hu reports.

ELISE HU, BYLINE: You have to be a sophisticated user to get there, but there's an underground or hidden Internet called Tor, that's only reachable when using anonymizing software. That's where you could find the Silk Road - what authorities call the largest online marketplace for illicit stuff. Users bought and sold everything from fake ID's to guns and drugs.

BRIAN KREBS: It's kind of earned the reputation as the eBay of drugs.

HU: Brian Krebs is a cybersecurity researcher and former reporter for The Washington Post.

KREBS: I think for a lot of people that's shocking that you could, you know, with a few clicks have heroin sent to your door. I don't think it's a good idea. But...

(LAUGHTER)

KREBS: ...that's the reality of the Internet that we live with today.

HU: On the Silk Road site, users could rely on the online currency Bitcoin to make their purchases. But if you try to reach the Silk Road today, you'll get a message from the feds saying the hidden site's been seized.

MARY GALLIGHAN: It really was, you know, a marketplace and what the FBI has done is they have taken an invisible marketplace and they've made it visible.

HU: Mary Gallighan is the former special agent in charge of cybercrime in the FBI's New York office.

GALLIGHAN: Right now, there are a lot of people around the world, saying what did I do, what did I do on the Tor server, especially if I did illegal activity, and who knows about it. So it's really a significant technical achievement by the U.S. government and the FBI.

HU: FBI agents arrested 29 year old Ross Ulbricht, who went by the alias Dread Pirate Roberts. Since being outed, we've learned he's a University of Texas grad who lived in San Francisco and called himself an entrepreneur. The FBI says he ran Silk Road for more than two years. He's now in custody, charged with money laundering, computer hacking and drug trafficking. And court documents show he was involved in an even crazier plot.

KREBS: One of the services that's available on the Silk Road is hitmen.

HU: Wait a second, Brian. Hitmen?

KREBS: Hitmen. Yes. Hire somebody to take out a rival, right?

HU: Prosecutors say Ulbricht tried to do exactly that - hire an assassin for the Bitcoin equivalent of $150,000.

KREBS: People tend to think that the Internet is very different from real life. It really just reflects what's going on in real life. And in this case, with the Silk Road at least, you have a lot of overlap between the Silk Road and the Internet.

HU: In this case, there's no evidence an actual killing took place. But once this Silk Road mastermind's identity was revealed, so were his social media tracks. It turns out Ulbricht even made a recording with NPR partner StoryCorps, in which he talked about his immortality.

ROSS ULBRICHT: I think I might live forever, in some form, by that time. I mean, technology's changing so fast.

HU: Even if he doesn't live forever, his notoriety could outlast him. Feds seized nearly $4 million worth of Bitcoin in shutting down the Silk Road site. They say it's the largest Bitcoin seizure to date.

Elise Hu, NPR News, Washington. Transcript provided by NPR, Copyright NPR.