Silk Road Cyber-Bazaar Suspect Denied Bail in New York
By Christie Smythe & Greg Farrell - Nov 22, 2013 12:00 AM ET
Ross Ulbricht, the man accused by the FBI of running Silk Road, a billion-dollar online market that sold drugs and hacking services, was denied bail after prosecutors accused him of trying to have six people murdered.
U.S. Magistrate Judge Kevin Fox in Manhattan yesterday declined to grant bail given the “powerful evidence” presented by the government. Ulbricht’s lawyer had asked for $1 million bail.
Oct. 30 (Bloomberg) — Charlie Croom, vice president of Lockheed Martin Corp.’s Cyber Security Solutions group, Daniel Kaufman, director of the Defense Advanced Research Project Agency’s Information Innovation office, Stewart Baker, partner at Steptoe & Johnson LLP, Chris Cummiskey, deputy undersecretary for management at the Department of Homeland Security, and Sandy Reback, senior global business analyst at Bloomberg Governnment, participate in a panel discussion on building the cybersecurity industry. Bloomberg’s Megan Hughes moderates the panel at Bloomberg Government’s “Cybersecurity: Costs and Solutions” conference in Washington. (Source: Bloomberg)
Ulbricht, 29, was accused by prosecutors yesterday of spending $730,000 to kill the six people in an effort to protect his business. He was officially charged by a federal grand jury in Maryland for one of the attempted murders. Prosecutors said they found no evidence that any murders took place.
Allegations about two of the murder plots were disclosed in court filings last month. The first involved an undercover agent working for the U.S Attorney in Maryland, who agreed to kill a rogue Silk Road employee for $80,000, a sum that Ulbricht allegedly wired to the undercover agent’s account.
The second allegation involves a Silk Road user named “Friendly Chemist” who threatened to blackmail Ulbricht by disclosing the identities of some of Silk Road’s vendors and customers, according to the filing.
Ulbricht allegedly paid $150,000 to another drug vendor, “redandwhite,” to murder Friendly Chemist.
In yesterday’s bail hearing, the U.S. said it retrieved e-mails showing that redandwhite told Ulbricht Friendly Chemist had implicated yet another Silk Road dealer, “Tony76,” in the blackmail plot.
Ulbricht asked redandwhite to learn more about Tony76 and was told that Tony76 lived with three other people, according to prosecutors.
For that reason, redandwhite said he would “prefer to do all four,” according to a government memorandum. “Ok, I’ll defer to your better judgment,” Ulbricht allegedly wrote, agreeing to pay $500,000 in the digital currency Bitcoin for the murder of all four, according to the memorandum.
A week later, redandwhite wrote to Ulbricht to tell him, “That problem was dealt with,” according to the government.
Ulbricht saw himself “as basically the head of an online cartel” where murder is “part of the job,” Assistant U.S. Attorney Serrin Turner told the judge yesterday in court.
“It’s not just a fantasy,” Turner said. Ulbricht had already been living a “double life” and is “prepared to live a life on the run,” he said.
Joshua Dratel, Ulbricht’s attorney, said his client doesn’t have a criminal history, and he lacks the financial means or ability to flee. Friends and family members sent the court numerous letters attesting to his character, Dratel said.
“People have stolen billions of dollars and gotten bail in this courthouse,” Dratel said.
Throughout yesterday’s hearing, which lasted about an hour, Ulbricht sat at the defense table, remaining composed even as Turner, the prosecutor, compared him to the boss of a Colombian drug cartel.
Ulbricht’s mother, Lyn Ulbricht, sat in a row with several relatives. After bail was denied, she let out an audible sigh. As he was escorted from the courtroom, Ulbricht turned toward her and waved.
Outside the courtroom, his mother told reporters that her son “is not a danger” and that the case against him “doesn’t add up.”
At the time of Ulbricht’s arrest last month, the government’s complaint cited circumstantial evidence indicating that the Texas native was Dread Pirate Roberts, the mastermind behind the Silk Road website who took the name after a character in the movie “The Princess Bride.”
In court yesterday, the prosecutor told the judge that when Ulbricht was arrested in a San Francisco public library on Oct. 1, the defendant had just logged on to his computer as Dread Pirate Roberts.
As part of the government’s letter opposing bail, prosecutors showed screengrabs taken from Ulbricht’s computer, indicating that Ulbricht was the primary administrator of the site. One Web page, titled “mastermind,” showed an overview of the transactions and money moving through the site.
The criminal case is U.S. v. Ulbricht, 13-mg-02328; a related civil forfeiture case is U.S. v. Ulbricht, 13-cv-06919, U.S. District Court, Southern District of New York (Manhattan) The murder-for-hire case is U.S. v. Ulbricht, 13-00222, U.S. District Court, District of Maryland (Baltimore).
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