Silk Road Trial Over: Ross Ulbricht Found Guilty on All 7 Counts [UPDATED With Reaction from Lawyer Joshua Dratel]

Defense promises an appeal.

UPDATE: Ross Ulbricht's defense lawyer Joshua Dratel sent me this reaction to the verdict via email this afternoon: "The verdict was very disappointing.  Of course, there will be an appeal, and we are confident Ross has strong issues on appeal.  We believe there were significant errors at trial, including the limiting of defense cross-examination, the preclusion of defense experts, and the exclusion of certain defense evidence in the form of documents and other exhibits.  The extraordinarily short time the jury spent deliberating for a trial of this length and density demonstrates that these elements had a devastating effect at trial."

Original post:

Andy Greenberg, the only reporter to get an on-the-record interview with the Silk Road operator going under the pseudonym "Dread Pirate Roberts" back in August 2013, has the bad news from the trial, where after less than four hours of deliberation the jury has found Ross Ulbricht, accused of being DPR by the government, guilty on all seven counts. His sentence could range from a minimum 30 to a possible life. His defense team vows an appeal.

From Greenberg's Wired report:

30-year-old Ulbricht was convicted of all seven crimes he was charged with, including narcotics and money laundering conspiracies and a "kingpin" charge usually reserved for mafia dons and drug cartel leaders….

As the verdict was read, Ulbricht stared straight ahead. His mother Lyn Ulbricht slowly shook her head, and his father Kirk put a hand to his temple. After the verdict, Ulbricht turned around to give his family a stoic smile.

"This is not the end," Ulbricht's mother said loudly as he was led out of the courtroom. "Ross is a hero!" shouted a supporter.

Greenberg sums up why the verdict was so quick and easy for the jury:

From his first pre-trial hearings in New York, the government's evidence that Ulbricht ran the Silk Road's billion-dollar marketplace under the pseudonym the Dread Pirate Roberts was practically overwhelming. When the FBI arrested Ulbricht in the science fiction section of a San Francisco public library in October of 2013, his fingers were literally on the keyboard of his laptop, logged into the Silk Road's "mastermind" account. On his seized laptop's hard drive, investigators quickly found a journal, daily logbook, and thousands of pages of private chat logs that chronicled his years of planning, creating and day-to-day running of the Silk Road. That red-handed evidence was bolstered by a college friend of Ulbricht's who testified at trial that the young Texan had confessed creating the Silk Road to him. On top of that, notes found crumpled in his bedroom's trashcan connected to the Silk Road's code. Ulbricht's guilty verdict was even further locked down by a former FBI agent's analysis that traced $13.4 million worth of the black market's bitcoins from the Silk Road's servers in Iceland and Pennsylvania to the bitcoin wallet on Ulbricht laptop…….

Despite the case's grim outcome for Ulbricht, his defense team seemed throughout the trial to be laying the grounds for an appeal. His lead attorney Joshua Dratel called for a mistrial no less than five times, and was rejected by the judge each time. Dratel's protests began with pre-trial motions to preclude a large portion of the prosecution's evidence based on what he described as an illegal, warrantless hack of the Silk Road's Icelandic server by FBI investigators seeking to locate the computer despite its use of the Tor anonymity software. As the trial began, Dratel butted heads with the prosecution and judge again on the issue of cross-examining a Department of Homeland Security witness on the agency's alternative suspects in the case, including bitcoin mogul and Mt. Gox CEO Mark Karpeles. And in the last days of the trial, Dratel strongly objected again to a decision by the judge to disallow two of the defense's expert witnesses based on a lack of qualifications.

Why Greenberg think the feds may have won a battle in a largely fruitless war against online drug sales:

If the feds do find the administrators of the next generation of dark web drug sites, as they found Ulbricht, don't expect those online drug lords to let their unencrypted laptops be snatched in a public library, or to have kept assiduous journals of their criminal conspiracies. The Dread Pirate Roberts' successors have no doubt been watching his trial unfold and learning from his mistakes. And the next guilty verdict may not be so easy.

My blogging about the trial here, here, here, and here.

My December print feature on the rise and fall of Silk Road, the Ulbricht prosecution, and its possible dark implications for the future of anonymity and free markets on the web.