Silk Road

If Ross Ulbricht Admits to Starting Silk Road, Why Isn't That Essentially a Guilty Plea?

The letter of Ulbricht's indictment indicates little wiggle room

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As I blogged, on day one of Ross Ulbricht's trial, for various charges connected to running the shut-down website Silk Road, used by many to exchange bitcoin for illegal items including drugs, his defense attorney Joshua Dratel shocked many of Ulbricht's supporters by admitting that, yes, Ross Ulbricht did invent and launch the website, but got out of actively running it early and was not the pseudonymous "Dread Pirate Roberts" operating it in its latter days.

I spent a long time reading and thinking about the case while researching and writing my December Reason print feature on the site and the Ulbricht prosecution, and as I wrote earlier, it was unclear to me why this wasn't tantamount to a guilty plea.

Neither Dratel nor the attorney general's office prosecuting Ulbricht have responded to emailed requests to comment on the matter now. I went back and rechecked the first February indictment in this case and the August superseding indictment and communicated with a couple of lawyers with drug-crime experience who, since they are not actually working on the case, did not want their thoughts quoted by name.

I state these thoughts with extreme caution. Dratel knows things I don't, as does the prosecution, and since as near as I can tell the prosecution didn't instantly leap up and say "case closed!" or the equivalent, this matter, like most legal matters, is complicated and not cut and dried.

I'm also given pause that near as I've seen (corrections on this point, or any of my points, welcome in comments and I'll amend as needed) none of the reporters actually covering the case from court day by day leapt on this line of thought.

That all said, I do want to point to some elements of the August superseding indictment and wonder out loud about them.

The charges are narcotics trafficking; distribution of narcotics by means of the Internet; narcotics trafficking conspiracy; continuing criminal enterprise; conspiracy to aid and abet computer hacking; conspiracy to traffic in fraudulent identity documents; and money laundering conspiracy.

The charges all contain this language: "From in or about January 2011 through in or about October 2013…." I at first wondered if the loophole was the state needed to prove the crimes were committed over the entire range of the accusation, but lawyers have indicated to me this isn't generally the case, so that's not likely to be an out.

Although none of the charges name specific transactions or specific crimes of the "on this date you facilitated the illegal sale of this precise thing to this person" variety (and for that very reason those who worry about freedom of commerce on the Internet fret about the implications of this prosecution for criminalizing everyone operating a site that facilitates sales) the counts related to narcotics do discuss some specific amounts over time. Those include over 1 kg. of heroin, 5 kg. of cocaine, 10 grams of LSD and 500 grams of meth. If the defense can prove he got out when the site was still small and not well trafficked, those specific amounts may remain unproven.

If the government can make the case that from day one Silk Road both was intended to and did allow its users, buyers and sellers, to live in a state-free anonymous digital utopia where the specific statutory legalities of the items vended didn't matter, and that those items vended included illegal drugs, hacker tools, and fake IDs, and used an anonymous means, bitcoin, to "launder"/conceal the cash used and identities of the users, then admitting any role in its creation and early operation seems tantamount to admitting guilt to various charges in the indictment.

If the defense can make the case of "started, but got out early" stick in jury's and judge's mind, it could shape sentencing, or just jury's attitudes, in hard to predict ways. And it may be directly relevant to at least the "continuing criminal enterprise" charge, colloquially known as the "drug kingpin" statute. That requires supervision of more than 5 people and the gathering of "substantial income or resources" which perhaps they can argue didn't happen as charged if he got out during the site's earlier, smaller days.

It seems likely to me that merely proving that Silk Road from day one, by design and in fact, facilitated the commission of crimes should be equal to proving some elements of that indictment, now that Ulbricht has admitted starting the site. With juries, it sometimes helps to throw as much ink in the water as you can, but by my read, I don't see how the case wasn't more or less thrown from day one, at least in part.

As I reported in my December piece, Silk Road's use for illegality is reasonably well established from an early date:

Eileen Ormsby, the Australian author of a forthcoming book about Silk Road, thinks that the first media mention of the site was, unsurprisingly, on a libertarian movement radio show called Free Talk Live on March 17 of [2011].

Host Ian Freeman had poked around Silk Road-at a time when it had 151 registered users, 38 listings for sale, and only 28 completed transactions-and saw its promise. "This could be the killer app for Bitcoins," he said, since it allowed people to get "physical products that are normally fairly difficult to obtain; on a black market if you don't know anyone selling you can't buy it."

Freeman noted how much this system "eliminated dangers" from the drug buying process (for buyers and sellers, each of whom might be happy to not have to meet the other in person). He also prophetically joked that "someone is listening horrified, like, I can't believe you are talking about how people go about purchasing drugs on the Internet." (One caller decided the site must be a CIA honeypot.)

Other useful Silk Road trial links, see:

Transcripts of week one, via Daily Dot.

Ulbricht's allegedly damning diary entries entered into evidence by the feds, via Wired.

In court this week, a testifying IRS agent who searched Ulbricht's gmail records claims it helps connect him to Silk Road, as reported by Ars Technica:

Prosecutors weren't able to show any direct mentions of Silk Road on Ulbricht's Gmail or on Facebook. Instead, they associated e-mails from Ulbricht's personal life and receipts for travel and electronics with the data found on his laptop, which was open to a Silk Road management page when he was arrested in San Francisco….

Travel receipts in Ulbricht's e-mail also lined up with chats with Silk Road admins recovered from his laptop. Over the course of Nov. 14 and 15, he traveled from Austin to the Dominica. Then the government showed a chat from Ulbricht's laptop where "myself" told a Silk Road admin late on Nov. 15 "I am done traveling, for a little while anyway." Ulbricht's e-mail shows a record of a return flight to Austin arriving Dec. 5.

"Myself" is how TorChat identifies the default user. So prosecutors say that in chats they retrieved from Ulbricht's computer, "myself" is Ulbricht acting in his role as DPR.

Investigators were also able to connect Ulbricht's e-mail to the few references that DPR made to his personal life. Another "myself"/DPR chat with a staffer took place on February 10, 2013. In that chat, DPR says he just got back from a weekend away, "one of the best I've ever had."

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  1. I’m confused. I thought this was about soliciting a murder for hire too?

    Am I totally lost?

    1. You’re not. It appears that the murder-for-hire issue was a red herring… a sort of nitrous boost to the governments case to get it off the line.

      I believe what we have here is a classic case of “the prosecution’s got bupkis” on that particular charge, because as logic dictates, if they had anything, that would be front-and-center in this case.

  2. That is not one of the charges in the indictment; my December feature explains all that.

    1. thank you. I missed that!

  3. And it is a great victory for the state’s obfuscations and muddying waters that you, and likely many other people half aware of this, also think the case involved proving accusations of murder for hire. It merely acts as if they are already proven.

    1. yes. I, being a reason reader, was suspicious of such a charge in the first place. I thought it was a trumped up “gotcha” charge that could force him to plea to the lesser charges… but yeah, didn’t catch that they didn’t even actually bring the charges at all.

      Of course, I don’t understand the problem with what he did. I understand the legal issues with it- but I don’t understand why those laws exist.

  4. If the government can make the case that from day one Silk Road both was intended to and did allow its users, buyers and sellers, to live in a state-free anonymous digital utopia where the specific statutory legalities of the items vended didn’t matter, and that those items vended included illegal drugs, hacker tools, and fake IDs, and used an anonymous means, bitcoin, to “launder”/conceal the cash used and identities of the users, then admitting any role in its creation and early operation seems tantamount to admitting guilt to various charges in the indictment.

    By this logic, if you were to set up a bunch of tents on a vacant piece of land you owned, and rented the space to merchants, and didn’t tell them what to buy or sell, and didn’t prohibit barter, then you would have committed crimes because of what those merchants may have done.

    Not seeing how renting out your land, or your cyberspace territory, is a crime if you aren’t personally selling anything illegal.

    1. but isn’t this exactly what they would do? I mean, if you rented a store that was used to sell drugs out of, regardless of your knowledge of such sales- don’t they just take the store from you and turn it into state property?

    2. Not seeing how renting out your land, or your cyberspace territory, is a crime if you aren’t personally selling anything illegal.

      1. Fuck you, citizen.
      2. FUCK YOU, CITIZEN.
      3. It is your job to help the state carry out prohibition.
      4. It’s not really your land. It’s the government’s land, and you only get to keep it as long as you obey.
      5. Fuck you, citizen.

      1. that is one hell of a name…

    3. By this logic, if you were to set up a bunch of tents on a vacant piece of land you owned, and rented the space to merchants, and didn’t tell them what to buy or sell, and didn’t prohibit barter, then you would have committed crimes because of what those merchants may have done.

      It’s essentially what some people were seriously contending about Craigslist and Backpage.com.

      Here’s a snippet from an NPR article on this very thing:

      Congress is set to hold hearings Wednesday on the sex trafficking of minors, and among the witnesses will be a representative from Craigslist. The online-classifieds company recently shut down the adult-services section of its website after repeated threats from state law enforcement officials.

      But Craigslist isn’t alone in its shady offerings.

      Note the use of language here: Craigslist is apparently making the offerings, not the people who post the offerings on the site. It’s the parking lot for the tents that’s “offering up” human trafficking.

      http://www.npr.org/templates/s…..=129863089

  5. The government’s entire case is based on that logic, though. If your thoughts were to guide the prosecutors, there would never have been any charges to begin with.

  6. As I wrote above: “Although none of the charges name specific transactions or specific crimes of the “on this date you facilitated the illegal sale of this precise thing to this person,” (and for that very reason those who worry about freedom of commerce on the Internet fret about the implications of this prosecution for criminalizing everyone operating a site that facilitates sales)…”

    1. I’m reminded of the case against Warren Jeffs, in which it was alleged that because he told the bride and groom, “to be fruitful and multiply” during the marriage ceremony, that made Jeffs himself complicit in the rape that followed–after the bride decided she didn’t want to sleep with the groom on her honeymoon.

      No doubt, many of the things Jeffs did were unconscionable and many of the things he did were almost certainly illegal, but whether he was guilty of the exact crime for which he was convicted was another question entirely.

      http://www.nytimes.com/2010/07……html?_r=0

      If there is any substitute for a juror with critical thinking skills, maybe it’s a defense attorney who’s playing for an appeal from the get go.

      Yeah, there’s a lot of ink in the water, and although a jury is like a box of chocolates, I doubt they’re going to buy the story about how homie admits to being caught with a smoking gun, but he wasn’t the one that pulled the trigger.

      The defense case just looks like they’re playing for a hung jury, a mistrial, or a well provisioned appeal–from the get go.

      He should have flown to New Zealand and shacked up with Kim Dotcom.

  7. I agree with you, Brian, I don’t see how this isn’t tantamount to a guilty plea, if you accept (agreeing or disagreeing with being a separate issue) that operating the site was the crime.

    1. Yes. It’s tantamount to, if being named Spencer was a crime, stating my name to the court would be an admission of my guilt.

      They can always be going for jury nullification, right? I mean, you can plea not guilty, admit guilt, and then argue that it doesn’t matter and the jury could (HAHA!) side with liberty and acquit?

      No?

      1. I just don’t see that in the defense’s strategy though.

        And did I miss something? When did we decide that being named ‘Spencer’ isn’t a crime? That’s as bad as being named ‘Skylar’.

        1. I did it first- so it’s not so bad.

      2. If you’re playing for a hung jury, a mistrial, and excellent grounds for an appeal, then the defense might do what they did.

        My understanding is that the feds seized his laptop–powered and on–while he had a chat window open as DPR talking to a government agent.

        If that’s so, there’s no use in disputing the fact. Then, I guess it becomes a war of attrition.

        It’s sort of like the justification for invading Iraq. I used to argue around here that we shouldn’t just dispute it on the grounds that there isn’t any WMD, and that’s because I would have opposed invading Iraq on other grounds anyway–even if they had WMD. And if you don’t want to invade Iraq, what are you going to tell people once they find WMD? Once you dispute the war on a lack of WMD grounds–and they find WMD? You’ve lost in the idiot court of public opinion that we shouldn’t invade Iraq.

        Well, these guys have decided to show that, yeah, there was WMD–from the very beginning. Now, hopefully, the case won’t be decided on the question of whether he was ever Dread Pirate Roberts.

        Now the question will hopefully be decided on whether he was DPR at the time the allegations were perpetrated–and that’s a case the prosecution has to make on more shaky evidence.

        Still, I think you expect a conviction. Your best shot is probably with an appellate judge.

    2. I don’t understand why somebody would operate a site like that from within the United States.

      The U.S. government, under various presidents, has shown itself willing to invade foreign countries and direct foreign armies–against drug distribution networks in other countries.

      Whether this guy should be convicted is beside the point–weren’t the chances of the government coming after him about 100%?

      He made a fool out of an awful lot of government officials. They’re not going to stop until he’s guilty of somethin’.

      1. I don’t understand why somebody would operate a site like that from within the United States.

        I’m sure some posters here think I’m being snarky or cynical, and I’m not, but there seems to be a belief within the (younger) so-called tech community that total-identity-and-informational-security can be achieved with an “app”.

        From all I’ve read from this case, it appears that Ulbricht laboured under such a misconception.

        I believe that one could operate a site within the U.S., but you’d have to incorporate a large amount of ‘tradecraft’ in your logistics.

        He made a fool out of an awful lot of government officials. They’re not going to stop until he’s guilty of somethin’.

        I believe this is what it’s going to come down to. NOT finding Ulbricht guilty sends a very dangerous message, and right now, there’s an intense, but ‘quiet’ battle being waged over how much control of internet commerce the U.S. Government is going to implicitly cede. I suspect the feds aren’t going quietly into that good night.

        1. “There seems to be a belief within the (younger) so-called tech community that total-identity-and-informational-security can be achieved with an “app”.

          From all I’ve read from this case, it appears that Ulbricht laboured under such a misconception.”

          The Greeks called that “hubris”.

          And right or wrong was always beside the point. Whether it should be that way or not is beside the point.

          There’s just the way it really is, and given the way it really is:

          Messiahs get crucified.

          1. or they learn how to see, and speak, and hear an then tear down their disciples’ pinball themed holiday camp!

        2. I sense a plea that will save face/let the government regulate everything while he does a few years in the pen.

          1. I could see that too, given the magical disappearing murder charges.

  8. I wonder if he still has bitcoin. The FBI seized what was in the Silk Road escrow account, but he could have any number of undiscoverable bitcoin wallets.

  9. I trhink I like the way that is gfoing down dude.

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