FBI Arrests Alleged Underground Drug Website Operator in San Francisco Library

Thursday, October 03, 2013
Ross William Ulbricht in 2012(photo: Renee Pin, YouTube)

For at least the past two years, the smoothest path to finding and purchasing illicit drugs and suspect products and services online was along “Silk Road,” a website operating behind the shield of anonymity provided by the Tor network.

On Wednesday, the Federal Bureau of Investigation (FBI) announced that it had blockaded that road and arrested the website operator as he plied his trade in the science fiction section at a branch of the San Francisco Public Library. The FBI said it arrested 29-year-old San Francisco resident Ross William Ulbricht and accused him of computer hacking, narcotics trafficking and money laundering. He was also accused of arranging a murder-for-hire of a man who threatened to expose users of the site.

The criminal complaints, filed in New York and Maryland, allege that the black market bazaar did more than a $1 billion worth of business, using Bitcoins as the legal tender for brokering the sale of drugs and services in more than 13,000 categories. It was a go-to destination for heroin, ecstasy, fireworks, erotica, hacking assistance, forged documents and more. But one survey of the site indicated that marijuana was its most popular item. The site operator charged commissions of 8% to 15%, netting around $80 million from its estimated 1 million users around the world.

The FBI said Ulbricht graduated from the University of Texas with a degree in physics before attending graduate school in Pennsylvania. They claimed his LinkedIn profile indicated his intention to build the Silk Road when he professed a desire to create an “economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force” by “institutions and governments.” 

The FBI said it had been monitoring Ulbricht’s online activities, conducted from the Glen Park branch library and an Internet café not far from his Hayes Valley apartment. They arrested him as he chatted with an FBI informant.

The website is only accessible through the Tor network. Tor is free software that hides a user’s identity and physical location by bouncing multi-layered encrypted communications through a distributed network of relays operated by volunteers around the world. Participants download the Tor browser, the only browser that can access the network. It is widely used by those seeking to cloak their activities from prying eyes, and is a favorite among media, activists, businesses, the military and plain folk looking to maintain their cover as just plain folk.

The Silk Road website, at first glance, looked very much like any other online vendor. It billed itself as the “anonymous marketplace,” featuring news, sales, special services and a menu to access its broad range of products by category. It also sported a comments section and forums for discussion.

In 2011, not long after the website launched, U.S. Senator Chuck Schumer (D-New York) described it as “a certifiable one-stop shop for illegal drugs that represents the most brazen attempt to peddle drugs online that we have ever seen. It's more brazen than anything else by light years.”

And if the FBI is to be believed, the site got its brazenness from its alleged founder. The San Francisco Chronicle reported that Department of Homeland Security agents paid a visit to Ulbricht’s apartment in July and asked him about a package they had intercepted which contained nine fake IDs, all with different names and his picture.

He reportedly responded by saying that “hypothetically” anyone could order that sort of stuff on “a website named ‘Silk Road’ on ‘Tor’ and purchase any drugs or fake identity documents the person wanted.”  

–Ken Broder


To Learn More:

Alleged Online Drug Kingpin Arrested at SF Library (by Henry K. Lee, San Francisco Chronicle)

Feds Arrest Mastermind Behind Underground Drugs Website at San Francisco Public Library (by Tom Hays, Associated Press)

F.B.I. Seizes Silk Road, an Online Drug Market, and Makes Arrest (by Joseph Goldstein, New York Times)

Exclusive: Inside the World of a Silk Road Drug Dealer (by Fran Berkman, Mashable)

The Drug’s in the Mail (by Eileen Ormsby, The Victoria Age)

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