What Happened on the First Day of the Silk Road Trial
The defense argues Ulbricht gave up control of the site, but took the fall for the real bad guys.
The trial of the alleged mastermind behind Silk Road, the anonymous online market that once peddled illegal drugs, officially began Tuesday afternoon with opening statements from the prosecution and defense as well as the examination of the first witness, Homeland Security Special Investigation Agent Jared DerYeghiayan.
The prosecution will argue that Ross Ulbricht, a mild-mannered Texas programmer, started the site that did more than a billion dollars in shady business. Meanwhile, the defense is arguing that Ulbricht is taking the fall for more sophisticated players who escaped the FBI.
Proceedings started with the jury selection and Judge Katherine Forrest reading a previously redacted list of witnesses to the court.
Assistant US Attorney Timothy Howard gave the opening statement for the prosecution, painting a shadowy picture of Silk Road as an "online shopping paradise for the sale of illegal drugs" that the government claims Ulbricht created and operated under the pseudonym "the Dread Pirate Roberts," or DPR.
"This is a case about a dark and secret part of the internet," Howard began in his opening statement. "It's about a website called Silk Road, where you could buy and sell drugs with the click of a mouse.
"And that man," he said, pointing at the defendant, "Ross Ulbricht, was the kingpin."
Howard went on to summarize all the evidence the prosecution plans to bring against Ulbricht, much of which has already been laid out, as well as several additions. He described in detail the day the FBI agents busted Ulbricht, following him from his apartment to the science fiction section of a San Francisco public library, where they tackled him with his laptop open after waiting for him to connect to Silk Road.
On Ulbricht's laptop, Howard said, investigators found a logbook of drug deals, incriminating chat logs, a to-do list related to Silk Road, and a personal journal full of "devastating confessions" on how he launched and operated the site.
"I am Silk Road, the market, the person, the enterprise—everything," Howard claims one entry found on the laptop said.
Howard also said that when Ulbricht's laptop was intercepted, Ulbricht was chatting under the name DPR with an undercover FBI agent who was posing as a site administrator.
"Ulbricht was caught red handed, with his fingers on the keyboard, on Silk Road," Howard said. "The Dread Pirate Roberts had been unmasked as Ulbricht, the defendant."
Ulbricht now admits he created Silk Road as an 'economic experiment'
However, while Ulbricht's attorney Joshua Dratel admitted for the first time in court Tuesday that Ulbricht did create Silk Road as an "economic experiment," he claims the defendant passed the site to other administrators when running it became "too stressful" after just a few months in 2011.
The defense argues those administrators then turned the website back over to Ulbricht in 2013 when they caught wind of a federal investigation, recruiting him to unknowingly take the blame.
Ultimately, the defense plans to argue that due to the faceless nature of the internet, there is no way to prove beyond a reasonable doubt that Ulbricht was acting as DPR for the duration of the site's rise and fall.
"The internet is an unusual place," Dratel said in his statement. "People can fabricate profiles of themselves and others in ways we couldn't imagine 25 years ago."
However, the prosecution claims to have at least one witness who knew Ulbricht in real life: an old college friend who said he helped Ulbricht with programming the site, and later forced Ulbricht to admit to him what he was doing.
Many have brought up concerns that technical aspects of the case won't be understood by the typical juror, and Forrest has already noted she will keep this in mind during the case. When DerYeghiayan testified, he included a very basic explanation of the anonymizing network Tor, which was necessary to connect to Silk Road. DerYeghiayan showed a step-by-step video to the jury of how it obscures IP addresses (a concept he also had to explain at length).
DerYeghiayan said he first became aware of Silk Road while working as a Homeland Security Special agent at Chicago O'Hare airport. He said he opened an investigation into the site after seeing thousands more seizures of drugs coming through the mail at O'Hare in 2011. DerYeghiayan provided photos of some of the seized drugs for the jury. He said to investigate Silk Road, he made an account on the site and spent thousands of hours exploring it, ultimately making more than 50 purchases undercover.
Due to this research and more, Howard said the state can prove Ulbricht, as the Dread Pirate Roberts, had a hand in every aspect of the site's operation. They say he advised drug dealers how to package shipments, resolved disputes between dealers and buyers, supervised and paid employees, and ultimately earned more than $18 million dollars from the more than 1 million drug deals that took place through the site in its lifetime by making a commission of at least 10 percent on every purchase.
The prosecution also claims Ulbricht lured in vendors who had never sold drugs before with the ease and anonymity of Silk Road. One of those vendors will testify in the case.
Howard also said that Ulbricht ordered multiple murders in order to protect Silk Road, which has been alleged in criminal complaints filed in New York and Maryland. Although these hits were not successful, they showed "he was willing to stop at nothing to protect his empire."
Over the next four to six weeks, the prosecution will present evidence to try to prove just that. Meanwhile, Dratel argues that Ulbricht was not the Dread Pirate Roberts, but "the perfect fall guy."
"That Ross is DPR is a contradiction so fundamental it defies common sense," Dratel said. "The real DPR is still out there."
Motherboard will be covering the trial as it unfolds, so check back here for updates.