The US government's case against Ross Ulbricht, the alleged mastermind of a conspiracy to sell massive quantities of illegal drugs on the Silk Road website, is slowly unfolding in a Manhattan court room. We've learned new details about how the government closed in and arrested Ulbricht. But how investigators determined he was the site's administrator, known only to site users as the Dread Pirate Roberts, is not yet clear.
Josh Dratel, Ulbricht's attorney, has been keeping trial observers on the edge of their seats with a dramatic counter-narrative. First, he stunned everyone by admitting in opening arguments that Ulbricht had created the site as a kind of free-market economic experiment. He claimed Ulbricht had handed off the reigns to "the real Dread Pirate Roberts" only to be lured back in as a fall-guy as investigators were closing in.
On Thursday, Dratel named the man he alleges to be the real Dread Pirate Roberts: Mark Karpeles, former CEO of Mt Gox, what was once the largest Bitcoin exchange. Karpales denies the accusations, according to the Daily Beast, which spoke to him shortly after Dratel fingered him in court.
The French Karpeles makes a handy villain for the defence. In 2013, he fled to Japan to avoid computer fraud charges and he's reportedly been under investigation by multiple law enforcement agencies for a host of cyber-crimes. In contrast, Ulbricht has been painted by family and friends as an idealistic and kind-hearted young man. His parents and other relatives have been a constant presence in the court during the trial. Every so often the boyish-looking 30-year-old defendant will turn around to smile and joke with them.
The jury may have an easier time believing that it was Karpeles who hired a hit-man to kill off those who were threatening to expose him and the Silk Road operation, as alleged by the government. Ulbricht is not currently being tried on those murder-for-hire charges, which are filed in a different court district, but Judge Katherine Forrest will allow prosecutors to talk about those allegations over the objections of the defence.
The defence will also have to overcome the fact that Ulbricht was caught red-handed in an FBI sting operation at a San Francisco library. The first witness in the case, Homeland Security Investigator Jared Der-Yeghiayan, described how he spent months undercover as a Silk Road customer support employee and later helped the FBI catch Ulbricht.
Investigators staked out Ulbricht's San Francisco apartment, waiting for him to leave and log onto an unsecure Wi-Fi network. Once Ulbricht did, Der-Yeghiayan contacted the Dread Pirate Roberts via a Silk Road employee chat room and asked him to take a look at a problem he had flagged. When agents stormed the library, they caught Ulbricht with his laptop opened to the Silk Road's administrative pages.
Twists and turns
We have yet to hear testimony, however, detailing just how investigators linked Ulbricht to the Dread Pirate Roberts. Der-Yeghiayan testified that he had learned Ulbricht's name from an IRS agent who was also working the case. Under cross-examination Der-Yeghiayan admitted that he had earlier, in a sworn affidavit, stated his belief that Karpeles was the Silk Road mastermind.
It is hard to know how the jury is taking all of this, but the revelation certainly caused a buzz amongst the many court reporters following the case. Al Jazeera producer Darius Rafieyan reported that journalists were left scrambling and comparing notes after Thursday's twists and turns.
Everyone is waiting to learn more about how investigators overcame many levels of online security, including Tor software that promises anonymity, to link Ulbricht to the Dread Pirate Roberts. We may get some answers when the next witness, an FBI computer specialist named Tom Kiernan, takes the stand. The trial is expected to last at least a month.