Silk Road Trial Preview: Ross Ulbricht Case Could Impact Cyberinvestigations, E-Commerce, Internet Freedoms

Narcotics dealing. Murder-for-hire plots. Conspiracy to traffic fraudulent identification documents. Those are just three of the allegations the U.S. attorney’s office in the Southern District of New York will make against Ross Ulbricht when the trial of the accused Silk Road founder begins Tuesday.

Prosecutors say Ulbricht facilitated $1.2 billion in sales on the black-market website and are seeking to put him behind bars. His supporters -- ranging from civil libertarian groups to respected cybersecurity experts -- paint a far different picture, accusing the government of an overzealous prosecution that could limit Internet freedoms and change the nature of e-commerce.

Ulbricht’s arrest in October 2013 sparked a wave of interest in the Dark Net, the criminal underside of the Internet made up of sites not listed through traditional search engines. It also marked the end of the Silk Road, which, upon launching in February 2011, made it possible for customers to anonymously connect primarily with drug dealers.

The entire operation, which dealt in bitcoins and stayed hidden thanks to the Tor anonymity service, was run by a user calling himself “Dread Pirate Roberts,” a name taken from the 1987 Disney film “The Princess Bride.” (The movie character’s true identity is not revealed, with the “Dread Pirate Roberts” persona being passed from one pirate to another.)

Who Is Ross Ulbricht?

That question has been a topic of debate since Ulbricht was collared while using his laptop in a California library. A Texas native, he has been accused by federal authorities of illicitly making nearly half a billion dollars in just a few years while also purportedly using his website to try to hire hit men to murder a potential informant.

It’s not exactly the narrative pushed by family members and friends since Ulbricht’s apprehension. He collected comic books and became an Eagle Scout as a kid, attracting friends with a “physics hippie” mentality, one friend told Rolling Stone magazine. But he also became a hardcore libertarian (a philosophy championed on the Silk Road and throughout the Dark Net) who earned a master’s degree in materials science only to abandon academia in favor of entrepreneurship.

“All of a sudden, it became so clear,” he wrote in an online journal upon formulating the idea for the Silk Road, according to quotes obtained by Rolling Stone. “Every action you take outside the scope of government control strengthens the market and weakens the state.”

Accusations And Charges

At the time of Ulbricht’s indictment last Feb. 4, he was charged with one count of narcotics conspiracy, one count of money-laundering conspiracy, one count of conspiracy to commit computer hacking and one count of engaging in a continuing criminal enterprise, U.S. Attorney Preet Bharara’s office said in a statement.

The feds also alleged Ulbricht solicited six murders-for-hire in connection with operating the site, although there is no evidence the murders were carried out. Ulbricht has been indicted for one murder in Maryland, though his defense attorney said Ulbricht will not be charged with the crime in the immediate future because it would be "legally vulnerable" in court.

In one case, he allegedly hired an undercover police officer to murder a former Silk Road employee. Federal officials did not formally charge Ulbricht for the purported crime, and Ulbricht supporters say there's no evidence the murders actually took place. Still, those accusations were cited in the refusal to grant Ulbricht bail, and helped change the image of the Silk Road from an online drug bazaar to a mafialike enterprise. They also created what Lyn Ulbricht, the defendant’s mother, described as a “fog of sensationalism around the Silk Road case.”

Defense Strategy

Defense attorney Joshua Dratel is expected to hammer away at the way the FBI was able to determine where the Silk Road’s servers were located. The website was only reachable via Tor, which obscures a site’s location and makes it possible for a site owner to operate without broadcasting location data. The FBI claimed in a recent court filing by the office of the U.S. attorney for the Southern District of New York that it obtained the server location, and thus the Internet Protocol address, because a CAPTCHA page was inadvertently broadcasting location details.

The trouble with that explanation, according to a number of security experts, it's just not possible. Or, as Nicholas Weaver of the International Computer Science Institute and University of California, put it, it’s “inconsistent with reality.” The issue became even more complicated when the FBI agent in question failed to save his documentation on how he identified the server.

“The program he was using has a prompt when you quit, asking, ‘Do you want to save your work?’ and you have to click ‘Don’t save’ in order to not save your work,” Lyn Ulbricht said. “I would think this was basic forensic protocol to save documentation in an investigation. It makes it very dubious.” Proving the FBI gained access to the site illegally, or violated the defendant’s Fourth Amendment right to privacy, could mean acquittal. Ulbricht has pleaded not guilty to all charges.

Chilling Precedents?

The Ulbricht case isn’t the first time the U.S. Justice Department has sought to put alleged cybercriminals behind bars. Yet this case, unlike other recent investigations, could have more importance because of the legal concept of transferred intent. If a user conducts illegal activity on a website, the idea goes, can the website operator be charged with wrongdoing?

The concept has traditionally been applied to violent crimes but has increasingly been used against services like Napster or the Pirate Bay. Those sites didn't actually pirate content, but they've been widely blocked and are the subject of police investigations throughout the world because they made it possible for users to share stolen content quickly and easily -- only instead of trading music and movies, Silk Road users were trading in much more nefarious content. What if someone uses Craigslist to sell an illegal handgun? Does that make the company guilty?

An answer in the affirmative might have implications not only for other Dark Net sites but also for piracy operators and even top online commerce sites like Amazon.com and eBay.

This story has been updated from a previous version. Silk Road’s terms of service did not allow child pornography or stolen credit card information to be trafficked on the site.