The man accused of founding the "dark web" site Silk Road — a sprawling black market bazaar that authorities once dubbed the most "sophisticated" and "extensive" haven for online criminal activity — is set to stand trial this week.
Ross William Ulbricht will appear January 13 in a New York court. He accused of myriad of crimes, including drug trafficking, computer hacking, conspiracy to traffic fake IDs, money laundering, and continuing a criminal enterprise, for which he could spend the rest of his life in prison if he is convicted. He has pleaded not guilty to all charges.
But the case will determine more than whether Ulbricht is indeed the former libertarian idealist-turned-alleged mastermind of a now defunct underground website where shadowy netizens peddled drugs, fake IDs, and other contraband. It will also foray — and possibly set precedents — into muddied and legally uncharted areas of the web's un-Googleable underground, digging into issues of state oversight and jurisdiction, liability, and internet privacy.
'Prosecutors say Silk Road was being used to traffic drugs, and known as an anonymous marketplace, therefore it was a co-conspirator with all the drug dealers.'
From its onset, the case has been shadowed by the questionable legality of the investigation methods authorities used in pursuing Ulbricht. His defense lawyers claim investigators from the FBI or even the National Security Agency unlawfully accessed Silk Road's servers abroad.
This point of contention lies at the heart of concerns on privacy and state surveillance, Ahmed Ghappour, a cyber-security and computer hacking lawyer and law professor at UC Hastings, told VICE News. "How was the government able to obtain the location of the server in Iceland? It seems very likely that what happened was… the equivalent to a hack."
In the fall of 2013, the FBI arrested the then 29-year-old Ulbricht at a public library in San Francisco, where he was allegedly using public Wi-Fi to access the website's server admin page. Authorities say they found exhaustive evidence that Ulbricht founded and ran the $1.2 billion black marketplace — also dubbed the "Amazon.com for drugs" — under the pseudonym Dread Pirate Roberts, a character lifted from the cult movie and book The Princess Bride.
In the fantasy adventure film, the masked, swashbuckling Roberts eventually revealed himself as the clean-cut farm boy protagonist, who went on to overthrow the oppressive powers-that-be. The revelation of Ulbricht as Silk Road's infamous shadowy drug kingpin was similarly unlikely. According to his family and friends, the physics graduate was nothing more than a gentle, nature-loving soul who possessed a love for hiking and a squeaky clean criminal record — before his indictment, that is.
"I don't know how they messed it up and I don't know how they got Ross wrapped into this, but I'm sure it's not him," his friend and roommate in San Francisco, René Pinnell, told tech site The Verge shortly after Ulbricht's arrest.
Ulbricht's mother also stands firmly by her son's innocence, but has "come to realize that this case is about more than Ross."
"The outcome will set a precedent that will have implications for internet freedom," Lyn Ulbricht recently told the Guardian from the family's home in Austin, Texas.
Yet the trial stretches far beyond just individual freedoms. It has the potent to affect any company providing the public with a platform for commercial services. Finding Ulbricht guilty for the actions of the site's users could be a slippery slope in terms of broader business liability implications, said Ghappour.
"The prosecutors say Silk Road was being used to traffic drugs, and known as an anonymous marketplace, therefore it was a co-conspirator with all the drug dealers," Ghappour said. "Well, is Yahoo liable for pedophiles using their Briefcase [cloud storage] to store illegal data? Is FedEx liable for shipping illegal drugs sold on the internet?"
Ghappour added that FedEx is in fact currently fighting charges filed by the Drug Enforcement Administration last summer, alleging that the company knowingly trafficked prescription drugs for illegal web pharmacies. The company could be fined $1.6 billion if found guilty.
Last month, a New York judge also sentenced a former CEO of a bitcoin exchange company to two years in prison for facilitating users' purchases on Silk Road through the exchanging of close to $1 million in cash for bitcoins between 2011-2013, an FBI statement said.
Ulbricht — who has spent more than a year in a Brooklyn jail, where he has reportedly been teaching other inmates yoga and physics — is scheduled to appear Tuesday in a Lower Manhattan court.
'It's not clear that the government is really an expert in the use of technical investigation or prosecution.'
The claims against the now 30-year-old are vast and multitudinous. A criminal complaint filed by FBI cybercrime agent Christopher Tarbell, who handled the investigation, reveals a range of charges brought against the alleged narcotics kingpin — from drug trafficking and computer hacking to hiring a hitman to murder another Silk Road user who threatened to reveal an extensive list of other users' identities.
Ulbricht had originally been accused of orchestrating six contract killings, but prosecutors say there is no evidence any of the hits were carried out, and he has not been charged with attempted murder. Despite this, the New York district judge presiding over the upcoming trial has allowed the FBI to introduce evidence of the alleged murder-for-hires before a jury, agreeing with the prosecution that Ulbricht's communications with the alleged hitmen prove his role as administrator of the site.
From January 2011 to September 2013, sales from illicit substances on Silk Road, which is operated on an encryption-protected "Tor" network, made the online currency equivalent of more than $1.2 billion in sales and $80 million in commissions, according to the FBI court filing. There were allegedly more than 13,000 listings for illegal drugs on the site shortly before authorities moved to shut it down. The site was driven purely by bitcoin, the anonymous electronic "cryptocurrency" that has fluctuated wildly in value in recent months, investigators said.
Last month, the Daily Dot published a listing of 250 evidence exhibits gathered by the FBI allegedly linking Ulbricht to Silk Road, including screenshots, a journal, financial spreadsheets, and an activity log. The listing was obtained when Ulbricht's lawyer, Joshua Dratel, "misfiled" objections to the evidence — much of which the defense claims is either unverifiable, hearsay, prejudicial, or unrelated to the stated charges — into the public docket. The court sealed the evidence a week later.
So what is the outlook for Ulbricht? The bad news for him is that "the vast majority of federal criminal cases result in a conviction — around 95-97 percent of cases," Ghappour said, but ultimately, the outcome will "depend on whether the court can navigate the case away from the uncharged allegations" against him, referring to the alleged gangland hits.
Jurors "oftentimes rely on the word of the government," Ghappour said, but, "In this case that's a very worrying situation because it's not clear that the government is really an expert in the use of technical investigation or prosecution."
The other problem is that Ulbricht has never claimed he is the Dread Pirate Roberts, which, conversely, makes him legally vulnerable. Last October, a New York district judge ruled that Fourth Amendment protections, which safeguards citizens against unlawful search and seizure methods, do not apply to Ulbricht because he has not staked ownership of the server or Silk Road. Ulbricht is now faced with a wretched catch-22: either own up to authoring the site, or relinquish his constitutional legal shield.
'There's no doubt that Silk Road was involved in some bad businesses, but the new generation of drug sites have added even more dangerous offerings.'
Meanwhile, as lawyers prepare papers for Ulbricht's upcoming trial, researchers at an organization that analyzes Tor-hosted sites reminded VICE News that the dark web may be buried, but it's certainly not dead. Since authorities cut off digital routes to Silk Road, dozens of other sites have popped up to fill the vacuum left by the original site, including its successor, Silk Road 2.0, and major marketplaces, Agora and Evolution, that reportedly hawk even more nefarious products.
"We see sites now that have listings for weapons, credit card fraud, identity theft — things that Silk Road's operators claimed in the site's charter that they wanted to stay away from," Adam Benson of the non-profit Digital Citizens Alliance told VICE News. "There's no doubt that Silk Road was involved in some bad businesses, but the new generation of drug sites have added even more dangerous offerings."
"The dark net has become darker," he said.
Follow Liz Fields on Twitter: @lianzifields