New court filings against Ross Ulbricht, the young Texan accused of being the mastermind behind the notorious Silk Road website, show new and compelling evidence that he was the man at the helm.
Documents formally introduced Thursday morning in a Southern District of New York federal court includescreenshots of Ulbricht’s computer as it was seized at the time of his arrest in San Francisco on October 1, 2013. The documents appear to show that Ulbricht was logged in, via Tor, as the administrator of the Silk Road.
A spokesperson for the court sent Ars a copy of the documents on Thursday afternoon, hours after Ulbricht’s request to be released on a $1 million bail was denied.
Ars contacted Ulbricht’s defense attorney, Joshua Dratel, but he did not immediately reply.
Investigators also said that Ulbricht’s computer contained “abundant additional evidence of his operation of Silk Road.”
Ulbricht apparently kept a journal on his computer, “in which he wrote about his creation and operation of Silk Road,” Sorrin Turner, an Assistant United States Attorney, wrote in an 11-page letter to the judge.
Quoting from an alleged 2010 journal entry, Ulbricht allegedly wrote:
I began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.
He noted later that he struggled to figure out how to get going, and by the end of 2010 he “still didn’t have a site up, let alone a server.” But that didn’t stop him from creating and rapidly growing Silk Road.
By Turner’s account, Ulbricht was very organized, and it appears that his meticulousness may in fact be his own undoing.
Financial files stored on Ulbricht’s computer likewise confirm his continuous control of Silk Road from beginning to end. For example, one spreadsheet, titled “sr_accounting,” lists hundreds of expenditures relating to Silk Road, from “server rent” to “pay off hacker,” spread throughout 2010 to 2013. In another spreadsheet, titled “NetWorthCalculator,” Ulbricht listed all of his assets and liabilities, the most notable of which was an entry for “sr inc,” listed as an asset worth $104 million. Moreover, actual proceeds derived from Silk Road were found on the computer, in the form of a Bitcoin wallet containing approximately 144,000 Bitcoins, equivalent to over $20 million based on prevailing exchange rates at the time of Ulbricht’s arrest.
Prosecutors have already detailed the first murder-for-hire that Ulbricht is suspected of plotting, which was actually via an undercover agent. But the Turner letter illustrates a second murder, as well as an additional four (for a grand total of six) that Ulbricht is accused of orchestrating. Like the second one, the four subsequent hits were organized by Silk Road user “redandwhite,” a known nickname of the Hell’s Angels Motorcycle Club, which the United States government considers as a criminal enterprise.
As Ars detailed previously in a report the government’s criminal complaint against Ulbricht, he allegedly received a message on Silk Road’s private message system from one “friendlychemist.”
riendlychemist had, he said, hacked into one of the computers of a major Silk Road dealer and obtained information on buyers, information he would release to the world unless Roberts paid up. And who would use Silk Road if it wasn’t secure?
friendlychemist needed $500,000, he said, to pay off his own drug suppliers, with whom he had fallen behind. On March 20, Dread Pirate Roberts wrote friendlychemist, asking to be put in touch with these suppliers. Someone named “redandwhite” messaged him on March 25, saying, “I was asked to contact you. We are the people Friendlychemist owes money to. What did you want to talk to us about?”
redandwhite, whose identity remains unknown, helped set up what Ulbricht allegedly believed would have been his second murder: specifically that of friendlychemist, who Ulbricht said lived in White Rock, British Columbia, Canada. However, neither the FBI nor Canadian authorities have a record of a homicide taking place in that area during that time, which either means the deed was actually done in secret, or redandwhite scammed Dread Pirate Roberts.
According to American prosecutors, Ulbricht believed that he was communicating with a bona fide member of the Hell’s Angels, and he entered that fact in his daily work log, with no more flourish than he applied to other, more mundane, tasks.
being blackmailed with user info. talking with large distributor (hell’s angels).
commissioned hit on blackmailer with angels
got word that blackmailer was excuted
withdrawals all caught up
made a sign error when fixing the bond refund bug, so several vendors had very negative accounts.
switched to direct connect for bitcoin instead of over ssh portforward
received visual confirmation of blackmailers execution
Ulbricht’s alleged interactions with redandwhite didn’t stop there. The next day, April 5, 2013, redandwhite contacted Ulbricht again, noting that one of friendlychemist’s associates, “tony76” had been running scams on Silk Road “for a couple years” and might be liable to engage in further blackmail.
“gave angels go ahead to find tony76”
redandwhite volunteered to do “some recon” on tony76 and later came back saying that he was a “drug dealer in the Surrey area” who lived or worked with three other people who “sell product together.”
Ulbricht wrote, according to the government’s account: “I am confident enough that it is him to move forward. Can we round up all 4 of them, separate them, and get them to out each other and give up their stolen money?”
redandwhite replied: “As for getting all 4, it would be possible but they would have to get them all at once so that one does not get away.”
And Ulbricht’s supposed answer: “Ok, let’s just hit [tony76] and leave it at that. Try to recover the funds, but if not, then not.”
By April 8, 2013, redandwhite offered to do the “hit” for $150,000 (or rather, its equivalent in bitcoins), but he warned Ulbricht that if only tony76 were taken out, and not his housemates, he and his fellow hitmen couldn’t “do [the hit] at their place because there are always at least a few of them there… So we wouldn’t be able to recover any of his things.”
redandwhite said that he’d “prefer to do all 4,” as a way to up the “chance of recovering any potential product/money he may have.” Aiming to be an amicable negotiator, he offered Ulbricht a 50/50 split on “anything recovered.” He also offered Ulbricht a bulk discount, offering $500,000 to kill “all 4.”
Ulbricht’s reply? “hmm… ok, I’ll defer to your better judgment and hope we can recover some assets from them.”
Using the then-rates of $166 per bitcoin, Ulbricht paid 3,000 bitcoins to Redandwhite.
Again, Ulbricht made note of this in his personal journal.
made sure backup crons are working
gave angels go ahead to find tony76
cleaned up unused libraries on server
added to forbidden username list to cover I <-> l scam
sent payment to angels for hit on tony76 and his 3 associates
very high load (300/16), took site offline and refactored main and category pages to be more efficient
Based on this evidence, Turner argued that Ulbricht’s bail should not be granted (and it wasn’t).
As the prosecutor told the judge:
In light of the foregoing, Ulbricht should be detained as a danger to the community. Given his willingness to pay approximately $730,000 for attempts to kill six people, there is no reason to believe that he would not again resort to violence in order to protect himself, whether through intimidating witnesses, recovering proceeds of his criminal activity, or otherwise. It is evident that he cannot be trusted to comply with bail conditions designed to ensure the safety of other persons and the community. Nor has he proffered any meaningful evidence rebutting the presumption that no such conditions exist.
“create new identity (name, backstory)”
In addition, federal investigators also discovered on his computer what they claim is Ulbricht’s own emergency plan, “a list of apparent to-do items in the event that Ulbricht learned that law enforcement was closing in on him.”
It reads as follows:
- encrypt and backup important files on laptop to memory stick. destroy laptop hard drive and hide/dispose
- destroy phone and hide/dispose
- Hide memory stick
- get new laptop
- go to end of train
- find place to live on craigslist for cash create new identity (name, backstory)
The authorities also included a photograph of nine fake driver’s licenses with Ulbricht’s picture, including ones from Alberta, New South Wales, the United Kingdom, California, Florida, Colorado, Texas, South Carolina, and New York.
Ulbricht also apparently had filled out an application from a company called “Offshore Advisor,” whichopenly advertises services to help people gain citizenship in the Caribbean nation of Dominica starting at $100,000: “99.9% guaranteed success of your application.”
Ars contacted Offshore Advisor, but it did not immediately reply.
“We believe that Ross Ulbricht is innocent”
Turner’s letter also states that while the FBI has seized some of Ulbricht’s bitcoin cache, “there could very well be additional large stashes of Bitcoins that Ulbricht stored elsewhere and that the FBI has yet to locate.”
Finally, Turner writes:
Ulbricht has significant ties abroad. His parents own property and hold bank accounts in Costa Rica, and they live there for half the year. His sister resides in Australia. He also has undertaken recent foreign travel – living in Australia and traveling in Southeast Asia from November 2011 to April 2012, traveling to Costa Rica from May to June 2012, and, as noted above, traveling to Dominica in late 2012.
In court, according to Forbes’ account, Ulbricht’s defense attorney Joshua Dratel said that his client had “rarely traveled in his life,” and had not even left San Francisco after federal agents visited him regarding the shipment of fake IDs that they had intercepted.
The magazine also interviewed Ulbricht’s mother, who, along with a US-born and Slovakia-based activist named Mike Gogulski, has created the Ross Ulbricht Defense Fund, which states “We believe that Ross Ulbricht is innocent.”
“Who he’s been portrayed as is so not him, it’s absurd,” Lyn Ulbricht told Forbes. “He’s one of the best people I know.”