Ross Ulbricht: Untraceable?

The kingpin of the Silk Road drug cartel believed he was safely hidden online ... he wasn’t. Nina Burleigh on the rise and fall of Ross Ulbricht

THE clerk read each of the seven guilty verdicts. He was standing next to a large window that framed the Brooklyn Bridge in thin, winter sunlight. That panoramic view will be one of the last that Ross Ulbricht, who had just been convicted of multiple crimes, including drugs-trafficking conspiracy and money laundering, will likely enjoy for many years.

The man who built Silk Road, the Amazon of what’s often called the ‘dark web’, took his conviction stoically, then turned and smiled at his family and supporters — young men and women who distrust the government as much as Tea Partyers do.

As a federal marshal marched Ulbricht out a side door, a young man in black dreadlocks shouted: “Ross is a hero!” Derrick Broze, a member of the Houston Free Thinkers, had come to New York for this trial, part of a group of self-styled anarcho-libertarians who squeezed into the courtroom every day.

In the brush-cut precincts of the Southern District of Manhattan, they stood out with their dreads, vintage threads, tattoos, piercings and smoky odour, and they provoked the judge’s ire when they distributed pamphlets to potential jurors, urging them to declare Ulbricht innocent, no matter what the evidence.

They believe the US government’s prosecution of Ulbricht is about something more menacing than a simple drug-trafficking case. They say it is an ominous triumph for the agencies that are spying on all of us, all the time.

Ulbricht’s internet exchange was the logical extension of Craigslist or eBay or Uber. It matched customers with providers for a fee, although the buyers weren’t seeking poodle ashtrays or a ride in a Prius. Silk Road matched drug sellers and drug users across the globe. If hailing a taxi seems out of date, so, too, is walking around a city park hoping to score some weed.

Even before he was arrested, in October, 2013, Ulbricht portrayed himself as more than a drug kingpin — a philosopher kingpin, perhaps. He is ambitious, creative, tech-savvy and a dead-ringer for actor Robert Pattinson. Before he found his inner cartel leader, he was more Haight-Ashbury than Silicon Valley, more ’shrooms than Sand Hill Road, more into Adam Smith than Steve Jobs.

He fashioned himself a libertarian, perhaps a younger, hipper version of Mitt Romney in his early days at Bain Capital. A scientist and self-taught programmer, in recording his progression from grad’ student to online drug lord, he left digital crumbs on his computer; on YouTube and LinkedIn; and in chats and emails. His fatal error was thinking he could remain anonymous on the internet — the same internet that computer security writer, Bruce Schneier, has called “a surveillance state.”

In the post-Edward Snowden era, it is surprising that smart people are selling drugs online and think they are invisible and anonymous. But most of us harbour similarly naive beliefs, such as a faith that a strong password, two-step verification, and other bits of cyber-hygiene that we’re told to practice as diligently as we brush our teeth allow us to roam the internet safely. They don’t. Ulbricht believed the so-called ‘deep web’ would protect him. It didn’t.

The stunning rise and sudden fall of Silk Road is a story so compelling it was optioned by Hollywood before Ulbricht was convicted. In its short life, Silk Road earned him $80m, according to authorities, in commissions on the sales of drugs, guns and other contraband, until FBI agents nabbed him while he was tapping into the free Wi-Fi at a public library in San Francisco.

Ulbricht’s trial, concluded in Manhattan last month, revealed that he was brought down by an extraordinarily elaborate cat-and-mouse game, involving a maze of false internet identities, the betrayal of trusted friends and associates, and half-a-dozen fake murders.

Growing up in Austin, Texas, in the 1990s, Ulbricht didn’t look or act like an aspiring cartel boss. He was, his father says, “a healthy, happy, unflappable Buddha of a kid,” an Eagle Scout and honour student, a math whiz, and because his parents built bamboo, solar-powered houses in Costa Rica, Ulbricht was weaned on la vida pura, playing in the jungle and surfing.

The Free Ross Ulbricht website extols their hero’s humanitarianism (donations to prison reformers and the urban poor, water programmes in Africa). It omits the heedless hedonism. One of his friends, René Pinnell, in an interview with Rolling Stone magazine, said that when he told Ulbricht he had “dipped a toe” in drinking and drugs during high school, Ulbricht said, “I did, like, a cannonball in that department.”

All those drugs — Ulbricht reportedly favoured hallucinogens — didn’t seem to dull his wits. His SAT scores got him a full scholar

ship to the University of Texas at Dallas, where he worked on organic solar cells, a burgeoning branch of green-energy research that relies on polymers rather than traditional materials.

In graduate school, studying materials science at Penn State, he joined the College Libertarians and was a supporter of Ron Paul. By 2007, he was so deep into libertarian crank-dom (even the black-helicopter variety) that he answered one of presidential hopeful Mitt Romney’s YouTube questions, about America’s greatest challenge, with this reply: “The most important thing is getting us out of the United Nations.”

Ulbricht’s politics are rooted in the philosophy of Austrian economist, Ludwig von Mises, who fell somewhere on the political spectrum between Ayn Rand and anarchy. Mises was beloved by neither Milton Friedman nor the socialists, but his unrelenting contempt for government interference in markets drew acolytes.

By 2010, Ulbricht had turned away from materials science and academia and had announced, on LinkedIn, that he would be “creating an economic simulation to give people a firsthand experience of what it would be like to live in a world without the systemic use of force,” by which he seemed to mean police and laws. Around the same time, according to federal prosecutors, he was consulting a guidebook called The Construction & Operation of Clandestine Drug Laboratories and had built a DIY “shroomery” at a remote cabin in Texas, to grow hallucinogenic fungi that would be the first product he would sell through his economic “experiment.”

While his ’shrooms sprouted, Ulbricht taught himself computer programming. When he got confused about coding, he called on an old college friend, Richard Bates, a programmer at eBay. Ulbricht’s girlfriend and Bates were the only people he told about his project.

He hid it on Tor (The Onion Router), a browser system invented by the Navy that relies on layers of computer routers and is now used by dissidents, drug sellers and pornographers to cloak their web activities. He set up the site to accept the cryptocurrency, Bitcoin, evading both banking and government oversight.

Soon, Silk Road had vendors galore, and buyers were avidly building a ranking system to screen out the bad stuff, an echo of customer preferences on sites like Airbnb and Yelp. Ulbricht was getting rich, charging 10 to 12% on each transaction. He didn’t dare flash his wad, however, so he lived ascetically in rentals, often with roommates. He ditched Bates and the girlfriend before the end of 2011, moving to Australia for a while and then San Francisco. He limited his splurges to a Thailand jaunt, where he indulged in “jungles and girls.”

As his business grew, Ulbricht kept a journal — on his laptop, of course — as if he was writing for the benefit of future biographers. In one long entry, dated simply, “2011,” he described the early days of Silk Road.

“Only a few days after launch, I got my first sign-ups, and then my first message. I was so excited, I didn’t know what to do with myself. Little by little, people signed up, and vendors signed up, and then it happened. My first order. I’ll never forget it. The next couple of months, I sold about 10lbs of ’shrooms through my site.”

Later, in a chat, he joked that he wished he could explain Silk Road to family and friends, who couldn’t understand why an apparently unemployed young man was so busy: “I’m running a multimillion-dollar global drug operation!”

In addition to the diaries, he saved his chats, kept an Excel spreadsheet of his business and a Bitcoin “wallet” with $18m on his laptop.

The money was nice, but Ulbricht constantly portrayed Silk Road as a political act. He told Forbes magazine, in a blind online interview, that the site was “a way to get around the regulation of the state.” On the site, he often issued “proclamations”, like: “Silk Road is about something much bigger than thumbing your nose at the man and getting your drugs anyway,” he wrote in 2012. “It’s about taking back our liberty and our dignity and demanding justice.” Some people give money to the American Civil Liberties Union; Ulbricht tried to start a revolution.

A Silk Road vendor who went by the online name of Variety Jones picked up the banner. Jones, who advised Ulbricht to use the handle Dread Pirate Roberts, on the site and in his business communications, has never been publicly identified. He once wrote on a forum, according to Wired magazine: “I’m here to break the back of prohibition, to make the jack-booted thugs from the DEA roll up their tents and sneak off into the night, and to do what I can to ensure a future where 65-year-old MS patients aren’t shot by SWAT teams during drug raids, because they suspect there was a fucking plant growing in the back room.”

As his site grew, the US government took notice, and Ulbricht impishly revelled in the attention. As some US senators called for Silk Road to be shut down, Ulbricht made a chipper comment to Bates, in a chat, about how yet another national media outlet had mentioned his grand blow for freedom.

Meanwhile, federal agents in Maryland and Chicago were on his trail. US Homeland Security agents scanning incoming mail on foreign flights noticed hundreds of carefully wrapped, small shipments of drugs — two or three Ecstasy pills — in envelopes with “StudyAbroad.com” return addresses and slips of paper inside, urging recipients not to forget to give customer feedback. By July, 2013, the feds were so inside the Silk Road system that an agent was able to assume the online identity of a member of staff.

Ulbricht’s success brought myriad challenges, not the least of which was hiding the identities of vendors and customers. In March and April, 2013, prosecutors say, Ulbricht solicited the murder for hire of FriendlyChemist, a vendor who was demanding a half-million dollars not to reveal the identities of Silk Road vendors and suppliers.

A few days after the threat, another anonymous user, redandwhite, contacted DPR (Dread Pirate Roberts) claiming to be the person to whom FriendlyChemist owed money, and agreed to commit a murder for hire for DPR. Prosecutors claim Ulbricht paid $730,000 for the killing of FriendlyChemist and of five more individuals who had threatened to reveal vendors’ and clients’ real names.

Silk Road came to a dead end on the afternoon of October 1, 2013. Federal agents had trailed Ulbricht from his modest house to the library, and arrested him while he was chatting online with someone he thought was one of his employees, who was, in fact, an FBI agent sitting nearby. With Ulbricht logged on to his computer at a table in the science-fiction section, two agents pretended to have a loud domestic spat behind him. When Ulbricht turned to watch them, a third agent leapt onto his open laptop, so he couldn’t close it. Had Ulbricht been able to shut that encrypted machine, investigators would never have been able to access its contents, establish that he was the man behind the empire, or prove that he was the mysterious Dread Pirate Roberts.

Ulbricht’s trial was a tragic spectacle, from the squandered brilliance of the young defendant to the haggard faces of his parents sitting behind him, and his spectacular betrayal by his good friend, Richard Bates. When defense lawyer, Josh Dratel, accused the eBay programmer of cutting a deal to testify against Ulbricht, to avoid criminal charges, Bates, fighting back tears, conceded he had done just that.

In the courtroom, prosecutors projected chats between the two men on a giant screen, casual conversations in which Bates called himself “baronsyntax.” The two young men chatted about programming code, parties and the media attention Silk Road was getting. Ulbricht said that he was “overwhelmed.” (He was once so addled from stress — or the testing of his ’shrooms — that he forgot Bates had helped him move into a new apartment.) In November 2011, Ulbricht told Bates he had sold the website, and he drifted out of Bates’s life. But Ulbricht had only gone dark and had a new set of online advisers and fans, some of whom would prove to be devastatingly disloyal.

The trial revealed some, but not all, of the tricks FBI agents used to snatch Ulbricht out of the ‘dark web’. First, agents hacked into Silk Road after locating its servers in Iceland. The US government has never explained how it located those servers, at least to the satisfaction of tech experts. Once inside the site, government agents created fake personas to interact with the site’s administrator.

In the summer of 2013, one agent wormed his way into the top levels of the Silk Road operation, posing as an employee who went by the name of Cirrus. Once the FBI was dealing directly with Ulbricht through false identities, it was only a matter of time before they smoked out his identity and whereabouts.

After they charged Ulbricht, FBI agents built their case by gathering metadata, trawling through his personal email, chats, photographs and Dread Pirate Roberts’s chat logs. They matched known events from Ulbricht’s life — an illness (a case of poison oak), an OKCupid date with a woman named Amelia — with mentions of the same events by the virtual DPR. Ulbricht was ensnared by his actions and words online.

Ulbricht’s supporters argue that his prosecution is about something more important than Silk Road. They say it’s indicative of a rapidly spreading erosion of civil liberties — and they’re not the only ones who believe that. Gizmodo’s Kate Knibbs wrote after the verdict: “Law enforcement was allowed to present damning digital evidence without explaining where it came from. That’s bad news for our civil liberties.”

The ‘deep web’ has many legitimate users. Library-card catalogs and medical records have a home on it. Mainstream internet users concerned about corporate invasions of privacy use it. Tor hosts a New Yorker magazine whistle-blower site, Facebook has established a special web address for Tor users, and British rocker, Aphex Twin, recently released new music on it. Crucially, people living under tyrants find a home on it.

“We do know there are dissidents in Syria and Russia who use a forum that’s hosted on the ‘dark web’ to be able to communicate with each other secretly,” says Jamie Bartlett, author of The Dark Net and director of the Centre for the Analysis of Social Media. “How do you weigh the life of a Syrian dissident against the ability to access pornography? You can’t have the one without the other.”

After the Feds smashed up Silk Road, new black market sites sprouted on the ‘dark web’ like ’shrooms after a soaking rain. Many of them are much more sophisticated, having learned from DPR’s mistakes. The web may be the future of the drug trade, just as internet commerce has destroyed brick-and-mortar retail, but the Silk Road investigation resembled the gritty cops-versus-gangs saga depicted in The Wire. “Despite all the obscure technology, old-fashioned policing is how they caught him,” Bartlett says. “The answer to the problem of the ‘dark net’ markets is going to be increased reliance on what you might consider good old-fashioned policing.”

50,000 bitcoins — it’s an online currency — were seized from Ulbricht’s computer

and are being auctioned for .5m.

Ulbricht’s supporters have a name for this kind of policing: entrapment. After seizing those servers, FBI agents impersonated vendors and employees to snare DPR. Those murders-for-hire that Ulbricht allegedly ordered were another elaborate ruse. No-one has yet explained who was behind them, but Maryland federal prosecutors have indicted Ulbricht on one charge of hiring a federal undercover agent to commit murder.

Joshua Dratel, the defence lawyer, tried to convince the jury that anyone could be monitored by the government online, and that the chat logs purporting to involve Ulbricht under the Dread Pirate Roberts pseudonym could have been fabricated.

“The internet is not what it seems,” he warned in his closing statement, reminding jurors that FBI agents assumed multiple fake online identities to catch Ulbricht and controlled “dozens of accounts” on the website — all without obtaining a warrant. “No-one told anyone when he assumed new identities,” Dratel said. “The internet permits and thrives on misdirection and deception. Even the [FBI agent who posed as a Silk Road employee] said [the ruse] was so convoluted he couldn’t keep track.”

Dratel also argued in court that the FBI probably had help from an agency, like the US National Security Agency (NSA), in locating the servers in Iceland. In a court filing, the US government denied that. “Ulbricht conjures up a bogeyman — the National Security Agency.... The facts are not at all what Ulbricht imagines them to be.... The Silk Road server was located not by the NSA, but by the Federal Bureau of Investigation...using perfectly lawful means.”

But US government agencies do share surveillance data from the web; collaboration between intelligence agencies has been standard procedure since soon after 9/11. And given the magnitude of the FBI’s domestic surveillance power, it’s surprising it took the bureau two years to nail Ulbricht.

Shane Harris, in his 2014 book, @War: The Rise of the Military-Internet Complex, details a symbiotic relationship between the FBI and the NSA, claiming that, together, they are shredding online anonymity. He reports that while the NSA pays phone and internet companies to build their networks, so that the agency can tap into them, and has deliberately weakened cryptographic standards and worked to break Tor, the FBI enables the national intelligence agency’s domestic operations.

“When journalists say the NSA ‘spies on Americans,’ what they really mean is that the FBI helps them do it, providing a technical and legal infrastructure for domestic intelligence operations,” Harris says.

Schneier, the national security technology expert and blogger, is extremely bleak about online privacy. “Welcome to a world where Google knows exactly what sort of porn you all like, and more about your interests than your spouse does,” he wrote in a blog six months before Ulbricht was arrested.

“Welcome to a world where your cell-phone company knows exactly where you are all the time. Welcome to the end of private conversations, because, increasingly, your conversations are conducted by e-mail, text, or social-networking sites. And welcome to a world where all of this, and everything else that you do, or is done, on a computer, is saved, correlated, studied, passed around from company to company without your knowledge or consent; and where governments accesses it at will without a warrant.”

In other words, they did it to put Ulbricht in jail.

You could be next.

Dratel told Newsweek the US government’s reliance on metadata bodes ill for defendant rights, because it is easily manipulated. All of those coded bits of information — the time stamps and GPS stamps on photos and messages — can be easily manipulated, even forged. Lyn Ulbricht still denies her son participated in those incriminating chats with Bates and Variety Jones and the fake assassins. “There is no proof of who is behind that computer screen, or if it’s one or more people using that name,” she wrote in an email to Newsweek. “When everything is anonymous, identity becomes impossible.”

The young philosopher kingpin who freed drug users from the locavore 20th century model of drug selling — street corners, landlines, bike messengers — is now paying for that with his own liberty, and facing a future his mother calls, simply, “grim.”

Along with his supporters, Lyn Ulbricht will always see her son as more than just the audacious founder of a global drug eBay. “Internet freedom, the drug war, even liberty,” she says, “are all on trial along with Ross.”

Countdown to conviction

March 27, 1984 — Ross William Ulbricht is born in Austin, Texas.

April 12, 2007 — In a video posted to YouTube, in response to then-presidential candidate Mitt Romney’s question about America’s greatest challenge, Ulbricht replies, “Getting us out of the United Nations.”

July 5, 2010 — Ulbricht posts his thoughts on freedom in a Facebook note, urging readers to “build a world where we, and the generations that follow us, will be freer than any that have come before!”

2010 — Ulbricht opens Goodwagon Books, in Austin, a legitimate book business, and builds a DIY “shroomery”, to grow hallucinogenic fungi, in a remote cabin in Bastrop, Texas.

January 2011 — Ulbricht starts the Silk Road website and begins conspiring “to violate the narcotics laws of the United States,” according to the federal indictment.

50,000 bitcoins — it’s an online currency — were seized from Ulbricht’s computer

and are being auctioned for .5m.

The site is an exchange, matching customers with providers for a fee, although the website matched, among other transactions, drug sellers and drug users across the globe.

December 29, 2011 — Ulbricht writes in his journal that he’s told too many people about Silk Road. “It felt wrong to lie completely, so I tried to tell the truth without revealing the bad part, but now I am in a jam. Everyone knows too much. Dammit.”

February 2012 — The administrator of Silk Road takes a new name, Dread Pirate Roberts, after a character in the cult film, The Princess Bride (right).

March 2013 — Dread Pirate Roberts solicits the first of six murders for hire, after a Silk Road user tries to extort money by threatening to reveal users’ identities, according to prosecutors. (The killings were not carried out.)

June 2013 — The FBI locates the Silk Road server in Iceland.

July 2013 — Jared Der-Yeghiayan, a Homeland Security Investigations special agent, begins communicating with Dread Pirate Roberts, as a Silk Road staff member, with the online name Cirrus.

October 1, 2013 — Ulbricht is arrested in a San Francisco library and his open laptop is seized. Prosecutors allege that he was operating under the Dread Pirate Roberts pseudonym.

January 5, 2015 — Ulbricht’s federal trial begins in a Manhattan courtroom in the southern district of New York. He is charged with seven counts, including narcotics trafficking and money laundering. His defence tries to convince the jury that the chat logs purportedly involving Ulbricht, under the Dread Pirate Roberts pseudonym, could have been easily fabricated.

February 4, 2015 — Ulbricht is convicted on all seven counts. His sentencing is set for May.

February 17, 2015 — The US Marshals Service announces it will hold an auction of 50,000 Bitcoins seized from Ulbricht’s computer and from Silk Road servers. This is the third auction it has held of the Bitcoins, which are estimated to be worth $28.5m, according to Forbes.