Judge Sends Accused Silk Road Founder to New York

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    NEWSLETTERS

    Ross Ulbricht, an alleged drug kingpin who ran an underground drug website, was arrested at the Glen Park library in San Francisco Tuesday afternoon, Oct. 1, 2013.

    SAN FRANCISCO (AP) - A federal judge on Wednesday ordered a California man charged with operating a notorious online drug marketplace known as Silk Road to be sent to New York to face charges.

    Ross William Ulbricht, 29, agreed to remain in custody, waiving his right to argue for release on bail.

    FBI: Underground Drug Kingpin Busted at SF Library

    [BAY] FBI: Underground Drug Kingpin Busted at SF Library
    Ross Ulbricht, an alleged drug kingpin who ran an underground drug website, was arrested at the Glen Park library in San Francisco Tuesday afternoon. Cheryl Hurd reports. (Published Wednesday, Oct 2, 2013)

    His public defender Brandon LeBlanc said Ulbricht will be transferred immediately from his jail cell in downtown Oakland and might argue for release once he reaches New York, where he is charged with three felonies related to the website, including solicitation of murder.

    Silk Road gained widespread notoriety two years ago as a black market bazaar where visitors could buy and sell drugs using bitcoins, a form of online cash. A so-called hidden site, Silk Road used an online tool known as Tor to mask the location of its servers.

    While many other sites sell drugs more or less openly, Silk Road's technical sophistication, its user-friendly escrow system and its promise of near-total anonymity quickly made it among the best known.

    The FBI shut down the site when they

    arrested Ulbricht on Oct. 1 at a small branch library in San Francisco

    as he chatted online with a cooperating witness, according to authorities and court papers.

    He is also charged in Baltimore federal court with soliciting the murder of a former worker who was arrested on drug charges. The indictment alleges Ulbricht feared the former worker would turn on him.

    The FBI said Ulbricht unwittingly hired an undercover agent for the murder, which the FBI staged but never took place.

    Prosecutors in New York have charged Ulbricht -- a native Texan who was living in San Francisco and holds degrees from the University of Texas and Penn State -- with trying unsuccessfully to solicit the murder of a Canadian man who allegedly hacked into Silk Road, obtained dealers names and began blackmailing Ulbricht.

    Ulbricht is accused of operating Silk Road under the alias "Dread Pirate Roberts'' and earning $80 million from commissions involving every sale.

    LeBlanc has denied the charges against Ulbricht and said outside court on Wednesday that Ulbricht will be represented by another lawyer in New York. LeBlanc declined to say if the attorney will be privately retained or a public defender.

    Inside, LeBlanc told U.S. Magistrate Court Judge Joseph Spero, "we ... disavow all aliases'' alleged in the government's charge.

    "All we admitted to is that he is Ross Ulbricht,'' LeBlanc said outside court. "That was the only admission.''

    Federal defendants must be formally identified before authorities can transfer them.

    Ulbricht appeared in court shackled at the ankles and wearing Alameda County jail garb. He said "good morning'' to the judge and peered into the packed gallery during the five-minute hearing.

    FBI agents appear to have penetrated the behind-the-scenes operations of Silk Road and obtained a list of the sites users and sellers, court papers show.

    Authorities in Britain, Sweden, and the United States have arrested eight people who are charged with using the site to sell drugs. In Washington state, a man and a woman were arrested on charges of selling cocaine, heroin and methamphetamine through the now-shuttered website.

    In the U.K., the country's newly established National Crime Agency indicated more arrests were on the way.

    "These latest arrests are just the start; there are many more to come,'' said Keith Bristow, head of the agency.

    In court papers, the FBI said it had managed to copy the contents of the site's server -- something one expert said would likely provide international authorities with detailed information about dealers who use the website.

    "Any large sellers on Silk Road should be very nervous,'' said Nicholas Weaver, a researcher with the International Computer Science Institute in Berkeley and the University of California, San Diego.

    The traceable nature of bitcoin transfers means the FBI "can now easily follow the money,'' Weaver said in an email.

     

    The FBI provided WNBC in New York screen captures of the Silk Road website, while it was still operational: