Judge sends drug website suspect to New York

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(AP Photo)

(AP Photo)

SAN FRANCISCO (AP) — A federal judge on Wednesday ordered a California man charged with operating a notorious online drug marketplace known as Silk Road to be sent to New York to face charges.

The order by U.S. Magistrate Judge Joseph Spero came during a brief court hearing in San Francisco for Ross Ulbricht. Federal authorities in New York have charged Ulbricht with three felonies related to the operation of the website.

Ulbricht’s attorney, public defender Brandon LeBlanc, has denied the charges.

Silk Road gained widespread notoriety two years ago as a black market bazaar where visitors could buy and sell drugs using bitcoins, a form of online cash. A so-called hidden site, Silk Road used an online tool known as Tor to mask the location of its servers.

Ulbricht agreed to remain in custody. Authorities have said Ulbricht operated the website under various aliases, including “Dread Pirate Roberts”.

His attorney denied he used any aliases.

While many other sites sell drugs more or less openly, Silk Road’s technical sophistication, its user-friendly escrow system and its promise of near-total anonymity quickly made it among the best known.

The FBI shut down the site when they arrested Ulbricht on Oct. 1 at a small branch library in San Francisco as he chatted online with a “cooperating witness,” according to authorities and court papers.

He is also charged in Baltimore federal court with soliciting the murder of a former worker who was arrested on drug charges. The indictment alleges Ulbricht feared the former worker would turn on him.

The FBI said Ulbricht unwittingly hired an undercover agent for the murder, which the FBI staged but never took place.

Prosecutors in New York have charged Ulbricht — a native Texan who was living in San Francisco and holds degrees from the University of Texas and Penn State — with trying unsuccessfully to solicit the murder of a Canadian man who allegedly hacked into Silk Road, obtained dealers names and began blackmailing Ulbricht.

FBI agents appear to have penetrated the behind-the-scenes operations of Silk Road and obtained a list of the sites users and sellers, court papers show.

In the following days, authorities in Britain, Sweden, and the United States arrested eight people who are charged with using the site to sell drugs. In Washington state, a man and a woman were arrested on charges of selling cocaine, heroin and methamphetamine through the now-shuttered website.

In the U.K., the country’s newly established National Crime Agency indicated more arrests were on the way.

“These latest arrests are just the start; there are many more to come,” said Keith Bristow, head of the agency.

In court papers, the FBI said it had managed to copy the contents of the site’s server — something one expert said would likely provide international authorities with detailed information about the site’s dealers.

Silk Road’s eBay-style customer review system means that months’ worth of sales history are now in law enforcement hands, according to a computer expert who studies bitcoins.

“Any large sellers on Silk Road should be very nervous,” said Nicholas Weaver, a researcher with the International Computer Science Institute in Berkeley and the University of California, San Diego.

The traceable nature of bitcoin transfers means the FBI “can now easily follow the money,” Weaver said in an email.

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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