Bloomberg News

Silk Road’s Ulbricht Gets November Trial in Online Drug Case (2)

February 07, 2014

Ross William Ulbricht, accused of operating the billion-dollar online Silk Road website where customers used Bitcoins to buy and sell drugs, faces a Nov. 3 trial after pleading not guilty in Manhattan federal court.

Assistant U.S. Attorney Serrin Turner told U.S. District Judge Katherine Forrest today that the government had amassed “voluminous” amounts of evidence against Ulbricht, including a number of computer servers.

Ulbricht, 29, was indicted by a federal grand jury in New York Feb. 4 on four counts -- operating a narcotics trafficking scheme, money laundering conspiracy, computer hacking and operating a continuing criminal enterprise.

Charlie Shrem, a prominent evangelist for the currency whom prosecutors called a “Bitcoin millionaire,” was charged last month with conspiring to launder more than $1 million in the virtual currency in a case linked to Silk Road.

Silk Road was a “sprawling black-market bazaar” used by drug dealers and other vendors to distribute hundreds of kilograms of illegal drugs and launder hundreds of millions of dollars derived from the illicit transactions, the U.S. said.

Ulbricht designed Silk Road to include a Bitcoin-based payment system to conceal the identities and locations of the users, according to the indictment.

Review Material

Turner today said the government planned to turn over its evidence as well as provide Ulbricht and his lawyers a computer in the next few months so they can review the material.

Ulbricht, accused of running Silk Road under the alias Dread Pirate Roberts, is being held without bail at the federal jail in Brooklyn, New York, after a federal magistrate ruled that he had commissioned at least six murders-for-hire in an effort to protect his business.

He was arrested in October and charged with running “every aspect” of Silk Road, Manhattan U.S. Attorney Preet Bharara said.

Shrem, 24, is the former vice chairman of the Bitcoin Foundation, an industry representative to regulators formed to oversee the currency’s software protocol. He was also chief executive officer of BitInstant, a Bitcoin exchange company.

The charge of operating a continuing criminal enterprise carries a maximum life sentence in prison and a mandatory minimum term of 20 years. Narcotics conspiracy also carries a maximum life term while the money laundering conspiracy carries a term of as long as 20 years.

The criminal case is U.S. v. Ulbricht, 14-cr-00068; a civil forfeiture case is U.S. v. Ulbricht, 13-cv-06919, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at

pathurtado@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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