Silk Road

Silk Road Trial Roundup: Damning Alleged Ulbricht Journals, One Alternate Dread Pirate Roberts Theory Inadmissible

Things are Getting Tougher and Tougher for the Ulbricht Defense

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See my blogging about the first week of the trial of Ross Ulbricht for allegedly being the operator of the Silk Road website under the pseudonym "Dread Pirate Roberts" here and here, and my big Reason feature from our December issue about the Silk Road and the background of the Ulbricht arrest and prosecution here.

In this week's trial developments, as Business Insider reported from the trial:

prosecutor Timothy Howard called FBI agent and digital forensics expert Tom Kiernan to the stand to walk him through some of the journal entries and chat logs found on Ulbricht's Samsung 700z after the government seized it on Oct. 1, 2013. 

The files support the picture of Ulbricht the defense has attempted to paint: a young libertarian dissatisfied with his day job as a book seller who decided to experiment with a decentralized online marketplace free from government regulation.

Ulbricht's alleged journals go on to detail his beginnings selling mushrooms via the Silk Road site. Ulbricht's defense attorney Joshua Dratel admitted last week in a surprise announcement on day one of the trial that Ulbricht did start the site. I have asked Dratel how this admission dovetails with the rest of their defense via email last week, but he has not responded.

The journals discussed in court contain further chatter allegedly from Ulbricht on the vicissitudes of keeping such a site functioning and safe, including detailed discussions with a fellow Silk Road worker going by the name of "Variety Jones" who apparently helped Ulbricht both improve security on the site and shaped his intentions and plans for it.

Andy Greenberg of Wired, who had the first and only interview with Dread Pirate Roberts back in August 2013, has more details about what the prosecutors revealed from these alleged Ulbricht journals about his plans for the Silk Road brand:

Ulbricht had allegedly planned to created "Silk Road brand" chat software, currency exchange, and more.

The young Texan had allegedly planned to expand the Silk Road into a "brand people can come to trust and rely on," according to a 2011 passage from the journal. "Silk Road chat, Silk Road exchange, Silk Road credit union, Silk Road market, Silk Road everything!"

A particularly bad-for-the-defense detail that also came out in court today, Greenberg reports:

Prosecutor Howard went on to lay out a maelstrom of evidence pulled from Ulbricht's laptop , including a PGP private key that had been used for "signing" messages as the Dread Pirate Roberts, html code that matched the code on the Silk Road website, and an application for "economic citizenship" in the Caribbean island of Dominica that had been filled out with Ulbricht's full details.

Greenberg has also written about how Judge Katherine Forrest has forbidden the jury from considering as legitimate evidence hearing in testimony last week that a federal agent thought that the DPR who Greenberg interviewed sounded like someone else, former Bitcoin exchange Mt Gox boss Mark Karpeles:

In a ruling Tuesday morning, Judge Forrest sided with the prosecution, saying that agent Der-Yeghiayan's "belief" that my interview with Dread Pirate Roberts might be Mark Karpeles was indeed hearsay, and not "competent evidence." That decision will prevent the defense from bringing it up, at least in its cross examination of [Jared] Der-Yeghiayan. "Whether [Der-Yeghiayan] believed the interview was with the man on the moon or Karpeles doesn't matter," Forrest said.

After that denial yesterday, the Wall Street Journal reported, Ulbricht's lawyer Dratel got openly upset, and explains why:

Forrest's ruling on Tuesday will likely limit how aggressively Mr. Ulbricht's lawyers can pursue their claims that there were multiple people who were Dread Pirate Roberts, the online pseudonym that prosecutors say was used by the leader of Silk Road.

After the judge's ruling, Mr. Dratel's cross-examination of Mr. Der-Yeghiayan on Tuesday was interrupted repeatedly by prosecutors' objections, with some stretches where prosecutors objected to every single question.

Mr. Dratel said on Tuesday that it's "unfair" to allow prosecutors to "completely eviscerate" his defense by raising so many objections without giving him time to prepare a new line of questioning. Mr. Dratel also raised constant objections during the government's second round of questioning later in the afternoon.

In a heated back-and-forth with Judge Forrest, Mr. Dratel even said at one point, "I'm not sure I can proceed" with the questioning of Mr. Der-Yeghiayan.

This Ars Technica report has more details about how the cross-examination of Der-Yeghiayan went yesterday.

Other Silk Road trial clips of interest:

•FBI agent Michael Panico, a cybercrime investigating agent who did not work on this case in particular, tells Vice how the combination of online and real-world surveillance of Ulbricht is a gold standard in successful prosecutions.

•Crowdfunding a private attempt to buy the expensive trial transcripts.

•And other arrests connected with the federal takedown of the next Silk Road, Silk road 2, also continue.