Econintersect: The internet drug dealer Silk Road was busted 27 September 2013 when the FBI filed a 39 page complaint with the U.S. Federal Court for the Southern District of New York in Manhattan. The complaint charges that a young engineer, Ross William Ulbricht, not only was trafficking in illegal narcotics but also was selling internet hacking services, anonymous bank accounts, counterfeit currency, stolen info and hitmen.
In addition the charges allege the site was also a gun and ammunition dealer. Also in the complaint were 801 listings under the category “Digital goods” which included pirated media content.
The site also traded in forgeries of government documents, such as passports and fake IDs.
The complaint alleges that Ulbricht also made an effort to hire a hitman to handle a blackmailer.
The site was apparently operating as a facilitator, in the same manner as E-Bay, to arrange for intermediation between the buyers and sellers of the nefarious products and services offered.
The business was avoiding scrutiny of financial transactions by operating only with bitcoins. The amount of business was very large. From the complaint (page 15):
The complaint (link below under Sources) reads like the outline of a thriller mystery novel of movie script. It is worth a read from start to finish.
Also worth a read is an article by Dan Kervick (who has contributed to Global Economic Inetrsection). Kervick has collected some further material on Ulbricht (second link below under Sources). For example he writes:
He’s got a Facebook page full of beer pong pics and, of course, was a vocal supporter of Ron Paul, donating $200 to his campaign in 2007. “He doesn’t compromise his integrity as a politician and he fights quite diligently to restore the principles that our country was founded on,” Ulbricht told the Penn State student newspaper in 2008.
And as everyone knows, the principles on which our country was founded are narcissistic greed, anti-social duplicity and flim-flammery, the exploitative hustle and the casual murder.
Sounds like Ulbricht is just another All-American boy-next-door success story. Except that, according to Tracy Alloway and Kara Scannell in the Financial Times, he used to have about $3 million in bitcoins readily accessible for the FBI to sieze.
- Sealed Complaint: United Sates of America vs. Ross William Ulbricht, aka “Dread Pirate Roberts”, aka “DPR”, aka “Silk Road”, U.S. Court for the Southern District of New York, 27 September 2013)
- Heisendorp (Dan Kervick, Rugged Egalitarianism, 02 October 2013)
- US grabs $3m worth of Bitcoins in Silk Road raid (Tracy Alloway and Kara Scannell, Financial Times, o2 October 2013)