October 3, 2013 in Nation/World

Suspect in court on black market charges

Papers allege website oversaw $1 billion in illegal transactions
Tom Hays Associated Press
 

NEW YORK – A hidden website operated by a San Francisco man using an alias from “The Princess Bride” became a vast black market bazaar that brokered more than $1 billion in transactions for illegal drugs and services, according to court papers made public Wednesday.

A criminal complaint in New York accused Ross William Ulbricht of being the mastermind and charged him with narcotics trafficking, computer hacking and money laundering. A separate indictment in Maryland accused him in a failed murder-for-hire scheme.

The website, Silk Road, allowed users to anonymously browse through nearly 13,000 listings under categories like “Cannabis,” “Psychedelics” and “Stimulants” before making purchases using the electronic currency Bitcoin. One listing for heroin promised buyers “all rock, no powder, vacuum sealed and stealth shipping,” and had a community forum below where one person commented, “Quality is superb.”

The website, whose other categories included “Erotica” and “Fireworks,” protected users with an encryption technique called onion routing, designed to make it “practically impossible to physically locate the computers hosting or accessing websites on the network,” court papers said.

Federal authorities shut the site down and arrested Ulbricht on Tuesday afternoon in a branch of San Francisco’s public library. Ulbricht was online on his laptop chatting with a cooperating witness about Silk Road when FBI agents from New York and San Francisco took him into custody, authorities said.

Ulbricht, 29, made an initial appearance in a San Francisco court on Wednesday, authorities said. A bail hearing was set for Friday.

A criminal complaint said Ulbricht “has controlled and overseen all aspects of Silk Road.”

He announced in a website forum last year that to avoid confusion he needed to change his Silk Road username, court papers said. He wrote, “drum roll please … my new name is: Dread Pirate Roberts,” an apparent reference to a swashbuckling character in “The Princess Bride,” the 1987 comedy film based on a novel of the same name.

The court papers cite a LinkedIn profile that says Ulbricht graduated from the University of Texas with a physics degree and attended graduate school in Pennsylvania. It says he has focused on “creating economic simulation” designed to “give people a firsthand experience of what it would be like to live in a world without the systematic use of force.”

Along with drugs, the website offered various illegal services, including one vendor who offered to hack into Facebook, Twitter and other social networking accounts and another selling tutorials on how to hack into ATMs. Under the “Forgeries” category, sellers advertised forged driver’s licenses, passports, Social Security cards and other documents.

As of July, there were nearly 1 million registered users of the site, the court papers said.

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