Silk Road mastermind convicted of running online drugs hub

A San Francisco man was convicted Wednesday of creating and operating the illicit Silk Road website — an online hub that enabled drug dealers around the world to reach customers they would never find on the street, prosecutors said.

Ross William Ulbricht was convicted of drug and conspiracy charges. The jury's verdict in federal court in Manhattan came after little more than three hours of deliberations and one day after prosecutors urged jurors to follow Ulbricht's "digital fingerprints."

The government said drug dealing made up nearly all of Silk Road's sales during its nearly three years in business, which ended with Ulbricht's October 2013 arrest. Prosecutors also discounted defense claims that Ulbricht was framed.

Prosecutors said Ulbricht enabled more than 1 million drug deals on Silk Road and earned about $18 million in bitcoins. Sales of illegal drugs of every type were delivered through the website, representing at least $180 million in sales, they said.

He now faces up to life in prison.

After the verdict was read, Ulbricht turned toward his supporters and raised his hand as he was led from the court. "Ross is a hero," shouted one supporter.

Silk Road operated from at least January 2011 until October 2013, when authorities seized the website and arrested Ulbricht at a public library in San Francisco.

Prosecutors said Ulbricht ran Silk Road as "Dread Pirate Roberts," an alias borrowed from a character in the 1987 movie "The Princess Bride."

The website relied on the Tor network, which lets users communicate anonymously, and accepted payment through bitcoins, which according to prosecutors allowed users to conceal their identities and locations.

By the time it was shut down, Silk Road had generated nearly $213.9 million in sales and $13.2 million in commissions, prosecutors said.

Prosecutors said Ulbricht took extreme steps to protect Silk Road, soliciting the murder of several people who posed a threat. No evidence exists that the murders were carried out.

Ulbricht conceded that he created Silk Road, and his lawyer Joshua Dratel said it was intended as a "freewheeling, free market site" where all but a few harmful items could be sold.

But government witnesses said the promise of anonymity drew dealers and drug customers to the site.

Giving evidence during the trial, Homeland Security Agent Jared Der-Yeghiayan testified that shipments originating on the website first came to his attention in June 2011 when X-rays and canine detection dogs at Chicago's O'Hare Airport turned up envelopes from the Netherlands containing Ecstasy pills wrapped in vacuum seal and foil. Soon, the drugs were being sent through many countries.

By late September of that year, Der-Yeghiayan said he learned about Silk Road and began infiltrating it, taking over staff member accounts each time one was arrested or agreed to cooperate.

The agent fingered the defendant as Dread Pirate Roberts and prosecutors presented numerous instant message conversations involving a person using that persona.

Defense attorney Dratel insisted evidence proved Ulbricht was not Dread Pirate Roberts.

But Der-Yeghiayan said he was the agent who was communicating online with Ulbricht when he was arrested while sitting at his computer at San Francisco's Glen Park Library. Agents, he said, were instructed to snatch the laptop before arresting Ulbricht.

On it, he said, they discovered that Ulbricht was signed in as Dread Pirate Roberts and was immersed in a chat with Der-Yeghiayan.

During closing arguments Tuesday, Dratel said his client quit Silk Road soon after creating it to sell anything on the Internet and before the website was overrun by drug dealers.

But Assistant U.S. Attorney Serrin Turner said Ulbricht operated the site from beginning to end and was willing to do anything to protect it. He cited emails that he said showed Ulbricht was willing to spend hundreds of thousands of dollars to kill as many as five people he thought were threats to his operation.

Ulbricht faced no murder charges in New York, but still awaits trial in Baltimore in a murder-to-hire plot.

His sentencing in New York is scheduled for May 15.

Wire services