Lawyers for Ross Ulbricht, the alleged mastermind behind the sprawling internet drug marketplace Silk Road, admitted for the first time that he founded the site — but claimed he wasn't "Dread Pirate Roberts," the anonymous user who allegedly controlled it.
The admission came in the defense's opening statement at Ulbricht's trial, which began Tuesday in Manhattan federal court. The Texas native is charged with a litany of crimes, including drug trafficking, hacking, and money laundering.
The Silk Road existed on the so-called "dark web" and could only be accessed via the Tor network, a service that hides a person's real IP address. Prosecutors allege the site was used primarily to buy and sell illicit drugs and other contraband. More than 1 million such exchanges took place, they claim.
Though not included in the list of charges against him, Ulbricht is also accused of attempting to assassinate several people involved with Silk Road. Authorities have provided no direct evidence to indicate any murders took place.
Prosecutor Timothy Howard said Ulbricht "set the rules that dealers had to follow," on the site and was "at the center of each of these drug deals," taking a cut of 10-12 percent from each exchange and earning some $18 million.
What it's really like to be one of the Silk Road's biggest drug lords. Read more here.
Ulbricht shook his head as Howard pointed to him and told jurors that he was Dread Pirate Roberts, the person who owned the site and profited handsomely from its illicit activity.
Defense attorney Joshua Dratel conceded Ulbricht "did invent the Silk Road" in 2011 as an "economic experiment," but gave up managing it soon after. Dratel said that his client did not go by Dread Pirate Roberts, a pseudonym taken from the book and movie The Princess Bride.
In an August 2013 interview with Forbes, a person claiming to be Dread Pirate Roberts said he paid to take over the site from its original founder.
Dratel suggested that a "naive" Ulbricht was entrapped, and said whoever took over control of the site set him up as the "fall guy."
FBI agents arrested Ulbricht in October 2013 as he sat at his laptop in a public library in San Francisco. The Silk Road was shut down around the same time, though similar sites have cropped up since.
The government said Tuesday that agents trailed Ulbricht to the library, where he logged into an administrative section of Silk Road and was "caught red-handed." Howard told jurors that Ulbricht was chatting with an undercover agent who posed as a user on the site. The prosecutor also said that an electronic journal found on Ulbricht's laptop "contains devastating confessions" that implicate Ulbricht and, presumably, tie him to Dread Pirate Roberts.
Law enforcement officials seized more than 29,000 bitcoins from Ulbricht's laptop, which they later sold for $17 million after the cryptocurrency appreciated.
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The defense argued that the same string of careless errors that ultimately led to Ulbricht's apprehension are proof that he could not have been the meticulous Dread Pirate Roberts.
"If he's not guilty he needs to be set free," Derick Freeman, an Ulbricht supporter from New Hampshire who demonstrated outside the courthouse in Lower Manhattan, told VICE News. "If he is Dread Pirate Roberts, he is a hero for putting the black market in a safer place."
Witness testimony will continue Wednesday. Critics of the prosecution will look for evidence that federal authorities illegally gained access to Silk Road's servers around the world, something Ulbricht's defense has alleged.
The trial — which could lead to life imprisonment for Ulbricht — is expected to last at least a month.
Follow Samuel Oakford on Twitter: @samueloakford