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4 February 2015 Last updated at 22:01
Ross Ulbricht: Silk Road creator convicted on drugs charges
Ross William Ulbricht listens to proceedings from the defense table during opening arguments in his criminal trial in New York 13 January 2015
The man accused of operating Silk Road, a deep web marketplace where illegal drugs were sold, has been found guilty.
Ross Ulbricht, 30, was convicted by a Manhattan jury on all seven counts including narcotics and money laundering conspiracies.
Prosecutors said more than a million drug deals took place on Silk Road, earning Ulbricht about $18m in Bitcoins
His defence lawyers had argued he was framed for much of the site's activity and had quit the site.
The jury deliberated less than day before handing down the verdict.
Ulbricht faces up to life in prison on the charges.
"Ulbricht's arrest and conviction - and our seizure of millions of dollars of Silk Road Bitcoins - should send a clear message to anyone else attempting to operate an online criminal enterprise," US Attorney Preet Bharara said a statement.
"The supposed anonymity of the dark web is not a protective shield from arrest and prosecution."
Ulbricht denied the charges
His supporters maintained his innocence
Defence lawyer Joshua Dratel argued in closing statements that Ulbricht had started Silk Road but quit soon after creating it.
The trial had heard that Ulbricht was the "perfect fall guy" for the true owners of the website.
But Assistant US Attorney Serrin Turner argued Ulbricht was willing to do anything to protect Silk Road.
Emails showed a man willing to spend hundreds of thousands of dollars on contracted killings to remove threats from the operation, the lawyer said.
Ulbricht was arrested in October 2013 and had pleaded not guilty to seven charges of narcotics trafficking, criminal enterprise, computer hacking and money laundering.
When the verdict was announced, his father dropped his head in his hands and his mother left the courtroom complaining that the defence had been barred from producing evidence that would help her son.
Lyn and Kirk Ulbricht, parents of Ross Ulbricht, speak to journalists after his conviction in New York. Photo: Reuters
The suspected mastermind behind the underground website Silk Road was convicted on narcotics and other charges on Thursday for his role in orchestrating a scheme that enabled around US$200 million of anonymous online drug sales using bitcoins.
Ross Ulbricht, 30, was found guilty by a Manhattan federal jury on all seven counts he faced after a closely watched four-week trial spilling out of US investigations of the use of the bitcoin digital currency for drug trafficking and other crimes.
The jury of six men and six women needed a little over three hours to deliberate before finding Ulbricht guilty of charges that included conspiracies to commit money laundering, computer hacking and drug trafficking.
Ulbricht, who prosecutors say went by the alias Dread Pirate Roberts in a reference to the 1987 movie The Princess Bride, faces up to life in prison and a mandatory minimum term of 20 years. His sentencing was scheduled for May 15.
Ulbricht has attracted many supporters to his cause, including some who say the government’s case is an attack on internet freedom.
After the verdict was read, Ulbricht turned toward his supporters and raised his hand as he was led from the court. “Ross is a hero,” shouted one supporter wearing dreadlocks.
Joshua Dratel, Ulbricht’s lawyer, said he would appeal. He said he was too limited in presenting evidence and that Ulbricht had been convicted based on statements not attributed by name to his client.
“It’s very disappointing,” he said.
Dark web
Manhattan US Attorney Preet Bharara said Ulbricht’s conviction should send a message to anyone attempting to operate an online criminal enterprise.
“The supposed anonymity of the dark web is not a protective shield from arrest and prosecution,” he said.
Silk Road operated from at least January 2011 until October 2013, when authorities seized the website and arrested Ulbricht at a public library in San Francisco.
A courtroom sketch of Ross Ulbricht at his trial at the Federal Court in New York. Photo: Reuters
The website relied on the so-called Tor network, which lets users communicate anonymously, and accepted payment through bitcoins, which according to prosecutors allowed users to conceal their identities and locations.
By the time it was shut down, Silk Road had generated nearly US$213.9 million in sales and US$13.2 million in commissions, prosecutors said.
They said Ulbricht took extreme steps to protect Silk Road, soliciting the murders of several people who posed a threat. No evidence exists that the murders were carried out.
‘Fall guy’
Ulbricht conceded that he created Silk Road, and his lawyer Dratel said it was intended as a “freewheeling, free market site” where all but a few harmful items could be sold.
But Dratel said Ulbricht’s “economic experiment” eventually became too stressful for him, so he handed it off to others. He was lured back toward its end, he said, becoming the “fall guy” for its true operators.
At trial, Dratel sought to raise questions in jurors’ minds about whether someone else, such as Mark Karpeles, the former chief of the failed Mt. Gox bitcoin exchange, was operating Silk Road for much of its existence.
Karpeles was never charged and has denied involvement with Silk Road. Although a federal agent told jurors he had been investigating Karpeles, US District Judge Katherine Forrest later struck much of that testimony as improper.
Prosecutors said the Dread Pirate Roberts alias itself was a cover story intended to suggest the name could be passed to others, as happened in “The Princess Bride.”
They also said Ulbricht was arrested in October 2013 while logged into Silk Road on his laptop as Dread Pirate Roberts, chatting with an undercover federal investigator posing as a member of the website’s staff.
