TECH
11/22/2013 12:43 pm ET

Alleged Silk Road Founder Put Out Hits On 6 Enemies, Prosecutors Say

ASSOCIATED PRESS

A federal judge on Thursday denied bail for the alleged founder of the black market website Silk Road amid new charges that he hired hitmen to kill six people who tried to blackmail him.

U.S. District Judge Kevin N. Fox ordered that Ross Ulbricht remain in prison, citing evidence from prosecutors that he commissioned the murders of six people who threatened to publicly release information about him and his Silk Road customers.

Although none of the murders appeared to have been carried out, prosecutors claimed that Ulbricht’s efforts to hire hitmen show that he “will not hesitate to use violence in order to silence witnesses, safeguard his criminal proceeds, and otherwise protect his self-interest.”

The FBI shut down Silk Road in October and arrested Ulbricht, a 29-year-old self-professed libertarian, alleging that he ran the booming online marketplace known as "the eBay for drugs” under the alias "Dread Pirate Roberts." Ulbricht has been charged with narcotics trafficking, money laundering and computer hacking.

In a letter to the judge arguing to deny Ulbricht bail, Assistant U.S. Attorney Serrin Turner said Ulbricht was a flight risk, citing evidence found on his computer that suggested he had prepared for a life on the run. One such file, labeled “emergency,” contained a list of to-do items in case police were ever closing in, Turner said.

The tasks included destroying Ulbricht's cell phone and laptop hard drive, encrypting and backing up important files on a memory stick, finding a place to live on Craigslist that would accept rent in cash, and creating a new identity, according to Turner.

Since Ulbricht’s arrest, investigators also found other evidence on his computer confirming that he was the operator of Silk Road, Turner said. For example, they found a webpage titled “mastermind” that detailed transactions on Silk Road and a journal explaining how Ulbricht had created the site, according to Turner.

“I began working on a project that had been in my mind for over a year,” Ulbricht allegedly wrote. “I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them."

Investigators also found more than 144,000 Bitcoins, which at the time of Ulbricht’s arrest were worth more than $20 million, Turner said.

Ulbricht's supporters have painted a different picture, urging the public to “reserve judgement until all the facts are in” and asking for donations to his defense fund.

On Wednesday, his friends and family wrote on FreeRoss.org, a new fundraising site for his defense, that his case “has far-reaching implications” that “will establish precedent on such issues as individual and Internet freedom; personal and financial privacy; and the role of government in our lives.”

“The outcome of this case will impact our future and our freedom,” they wrote on the site, which was created by Ulbricht's mother, according to his attorney. “Its outcome will affect us all.”

In a video posted to the site, voiceovers appearing to come from Ulbricht's friends and family added: “Ross is not a criminal mastermind and Ross is not a killer. We ask you to look beyond the headlines and see the man we love.”

The defense fund, which launched Wednesday, had garnered about $2,400 on Friday morning, far short of its stated goal of $500,000. Ulbricht’s family and friends had already pledged more than $1 million to cover his bail.

But prosecutors argued Thursday that Ulbricht’s supporters “appear to only know one side of Ulbricht, as he has gone to great lengths to keep his criminal alter ego a secret.” As an example, Turner cited an online chat in which an undercover agent allegedly asked Ulbricht if his then-girlfriend knew that he was operating Silk Road.

“No way. Maybe never,” Ulbricht replied, according to a transcript of the online conversation presented by prosecutors.

“How can you hide that from her?” the agent asked him. “I have to guess that [you are] spending at least 10 to 12 hours a day on [Silk Road].”

“I’ve become good at hiding,” Ulbricht allegedly replied.

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