FBI: Silk Road Drug Website Shut Down Following SF Arrest

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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. Cheryl Hurd reports. (Published Wednesday, Oct 2, 2013)

    An underground website called Silk Road that the FBI says served as a major marketplace for drug dealers has been shut down after the site's alleged owner was arrested at a San Francisco library.

    A federal criminal complaint accuses Ross William Ulbricht of trafficking and conspiracy, including a murder-for-hire plot targeting a user of the site.
    The FBI arrested Ulbricht – known as “Dread Pirate Roberts” – at the Glen Park library branch in San Francisco Tuesday. The San Francisco Chronicle reports he had a laptop in his possession at the time.
    The arrest happened in California, but prosecutors in New York are the lead agency in the case.
    Prosecutors told NBC New York's investigative unit that Silk Road was used by thousands of drug dealers and hundreds of thousands of customers from across the globe in its two years of operation.
    Officials called Silk Road the most “sophisticated and extensive criminal marketplace on the internet.” The criminal complaint referred to it as a "sprawling black-market bazaar where illegal drugs and other illicit good and service have been regularly bought and sold by the site's users." 
    The FBI told the paper that Ulbricht had been running Silk Road out of his San Francisco home for the past year. They said that since at least 2011, he has generated millions of dollars in commissions by selling drugs on an underground website that Ulbricht once referred to as an "anonymous Amazon.com," the paper reported. 
    Ulbricht is accused of setting up a special network that would help drug dealers avoid detection by hiding IP addresses.
    Justice Department officials said more than $1 billion in sales took place and the website took in more than $80 million in commissions. The drugs included Ecstasy, marijuana, cocaine, heroine, and LSD, and the site also advertised services for other illegal activities, prosecutors said.
    “Silk Road” also used internet currency known as bitcoins to help facilitate the illegal deals, prosecutors said.
    In addition to drugs, the FBI said the site also had listings for computer-hacking services, and listed pirated media for sale.
    According to the criminal complaint, undercover law enforcement officers made more than 100 purchases of drugs like cocaine, LSD and heroin from Silk Road vendors. In one two-month period, the FBI said there were more than 1.2 million messages exchanged through Silk Road.
    Investigators said Ulbricht had a small staff of workers who helped administer the website who were paid between $1,000 to $2,000 per week.
    The FBI said Ulbricht once tried to hire a hit man to kill a Silk Road user who had been trying to extort $500,000 from him or else he would “leak” names of users.
    Investigators said Ulbricht offered $80,000 and the name and address to the online hit man, and details about his family. The intended target was not killed, officials said.
    Charges against Ulbricht include narcotics trafficking, hacking conspiracy and money laundering. 
    The FBI provided WNBC in New York screen captures of the Silk Road website, while it was still operational: