The Government Tells Ross Ulbricht He Owes It $183,961,921
Ulbricht faces a mandatory minimum of 20 years in prison. Now the government says he owes money too.
Ulbricht, left, with a friend. Image: filed in court by the defense
As Ross Ulbricht waits to hear if he will spend the rest of his life in prison for the creation of deep web marketplace Silk Road, the government has filed an order requesting he pay up a major fee equal to transactions that took place on the site.
In a memo on Thursday, government prosecutors imposed a money judgement against the Ulbricht equal to $183,961,921. They came to that number based on the transactional records from Silk Road showing the amount of illegal drug sales as $182,960,285 combined with the transactions for fake identification equal to $1,001,636.
The government contends Ulbricht is liable for all transactions on Silk Road because of the structure of the site.
"Silk Road automatically laundered all proceeds passing through its Bitcoin-based payment system, including by passing them through a 'tumbler' whose sole purpose was to obfuscate the source and nature of the funds," the government wrote. "Hence, Ulbricht is liable for a money judgment in the amount of all the criminal proceeds laundered through Silk Road, regardless of the extent he personally retained those funds."
Ulbricht will be required to pay the full amount of money, which is likely not dischargeable in bankruptcy, according to Braden Perry, partner in the Kansas City-based law firm of Kennyhertz Perry, LLC and former federal enforcement attorney.
"These types of fines are typical if the government can trace the funds to the illicit conduct," Perry said. "Selling the illicit goods online made it easy for the government to trace the funds."
The government noted that the pending civil forfeiture against Ulbricht, which includes the bitcoins found on his laptop at the time of his arrest, can be credited to the judgement. That includes 700,000 bitcoins, which were worth $13.4 million at the time of transactions but are worth $166,124,000 at current conversion rates.
That would leave Ulbricht with $17,837,921 left to pay up—not a negligible fee, especially when the 31-year-old and his family are struggling to gather funds for his appeal process.
Ulbricht faces a mandatory minimum of 20 years in prison and a maximum of life. He will be sentenced tomorrow at 1 PM in a New York courthouse.