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."