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'Pirate' wanted online black market to change world
by Staff Writers
Washington (AFP) Oct 03, 2013


Black market site owner faces US murder plot charge
Washington (AFP) Oct 03, 2013 - The accused mastermind of the online black market website Silk Road, arrested this week, has been charged in a murder-for-hire plot, court documents show.

The indictment unsealed Wednesday in federal court in Maryland charges Ross William Ulbricht, also known as "Dread Pirate Roberts," with paying an undercover federal agent $80,000 to kill a drug buyer Ulbricht feared would reveal details of his criminal enterprise.

The indictment also charges Ulbricht with conspiracy to distribute drugs, witness tampering and other criminal acts.

The formal charges were unsealed following Ulbricht's arrest in San Francisco on Wednesday after a lengthy FBI investigation into the online black market for drugs, hitmen, hacker tools and more.

Federal agents shut down the website, which used a privacy-protecting Tor network and Bitcoin digital currency to shield the identities of buyers and sellers around the world.

According to the indictment, Ulbricht agreed to a series of drug sales with the undercover agent, and later indicated he was concerned that one of his employees had stolen funds from Silk Road and had later been arrested.

Ulbricht said he wanted the man beaten up, then changed his mind and asked for an "order to execute."

The document said Ulbricht transferred $40,000 from an Australian bank account as a downpayment and another $40,000 after "proof" of death, which the indictment said was a staged photo.

Ulbricht was set to appear in a California court Friday, when a judge will decide the next steps to take. A criminal complaint on his arrest was unsealed on Wednesday.

Ulbricht, 29, anonymized Silk Road transactions by using a Tor computer network designed to make it almost impossible to locate computers used to host or access websites.

He also added a Bitcoin "tumbler" to the Silk Road payment system to foil efforts to trace digital currency back to buyers, according to the criminal complaint.

Prosecutors maintained that Silk Road has been used by thousands of drug dealers to distribute hundreds of kilograms of illegal wares to more than 100,000 buyers and to launder hundreds of millions of dollars in ill-gotten profits.

The man known as "Dread Pirate Roberts" saw the potential for his online black market for drugs and other illegal wares as a way to free the world from government "coercion."

Ross William Ulbricht, accused of being the ringleader of the nefarious bazaar called Silk Road seized by US authorities this week, held a physics degree, admired the Austrian school of economic thought and viewed his enterprise as "an anonymous" version of Amazon.

Court documents, his online profiles and at least one interview given in an anonymized chat showed Ulbricht as highly educated and motivated to use Silk Road as a force for change.

"At its core, Silk Road is a way to get around regulation from the state," he said in an August interview with Forbes, routed through the online anonymizer called TOR and Silk Road's messaging system.

"If they say we can't buy and sell certain things, we'll do it anyway and suffer no abuse from them. But the state tries to control nearly every aspect of our lives, not just drug use. Anywhere they do that, there is an opportunity to live your life as you see fit despite their efforts," he said in the interview, which identified him ony by his "Pirate" moniker.

Prosecutors say Silk Road has been used by thousands of drug dealers to distribute hundreds of kilograms of illegal wares to more than 100,000 buyers and to launder hundreds of millions of dollars in ill-gotten profits, using the Bitcoin virtual currency.

The site, accessible only to those able to navigate the anonymizing software, sold drugs ranging from heroin, cocaine and methamphetamine, as well as hacker tools such as software for stealing passwords or logging keystrokes on people's machines.

Ulbricht's LinkedIn profile identified him as the CEO at an online bookseller called Good Wagon Books and showed he earned a physics degree at the University of Texas at Dallas and pursued graduate studies at Pennsylvania State University.

"I want to use economic theory as a means to abolish the use of coercion and aggression amongst mankind," he wrote on LinkedIn.

"Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end... I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force."

A criminal complaint unsealed this week in a California court, which led to Ulbricht's arrest in San Francisco, said he appeared to be promoting Silk Road in online forums as of early 2011.

FBI agent Christopher Tarbell stated in the complaint that Ulbricht, using the screen name "altoid," posted comments in a forum in response to persons discussing the potential for Bitcoin sales of heroin over the Internet.

"What an awesome thread," Ulbricht purportedly wrote. "Has anyone seen Silk Road yet? It's kind of like an anonymous amazon.com. I don't think they have heroin on there, but they are selling other stuff."

Tarbell said the screen name was eventually traced back to accounts controlled by Ulbricht, and that he seemed to be using this as a "marketing tactic" for Silk Road.

In the Forbes interview, the man identified as "Dread Pirate Roberts" said he was not the first administrator of Silk Road, but that he took over from the founder after refining the technology.

"I had discovered a big vulnerability in the way he had configured the main Bitcoin wallet that was being used to process all of the deposits and withdrawals on the site," he stated.

"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."

Tarbell said his investigation showed Ulbricht had in various postings talked about the libertarian-leaning Austrian school of economic thought, and that these were the "philosophical underpinnings" for Silk Road.

The FBI agent said Ulbricht, who had been under investigation for some time, was eventually identified as the "owner and operator" of Silk Road by connecting his various online accounts and through other evidence.

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