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Fall of online drug bazaar Silk Road began with tip to Md. agents

Bust in Harford was crucial as agents worked toward 'Dread Pirate Roberts'

November 18, 2013|By Ian Duncan, The Baltimore Sun

"It really isn't worth it for me to do below ten kilos," the agent wrote, according to a charging document against Ulbricht. Typical listings on the site advertised cocaine and heroin by the gram.

Dread Pirate Roberts offered to help find a buyer and set Green to work canvassing the top dealers on Silk Road, according to court documents in Green's case.

Green, a heavyset 47-year-old man who walks with a cane and used the nickname chronicpain, earned his salary resolving disputes between buyers and sellers. He was also supposed to be sniffing around for potential law enforcement plots.

"Hey, I think we have a buyer for you," Dread Pirate Roberts wrote to the agent a day later. "One of my staff is sending the details."

Over the course of the next month the buyer negotiated terms, eventually agreeing to sell a kilogram of cocaine for $27,000 worth of Bitcoins, according to Green's plea agreement.

But unknown to Dread Pirate Roberts or the undercover agent, Green had gone beyond what his boss requested of him. Green agreed to work as a middleman — and his address was sent to the agent.

On Jan. 17, 2013, an undercover postal inspector delivered the brick to Green's home. It was quiet — though a neighbor recalled an unmarked white van that stood out in the neighborhood — until armed men stormed toward Green's single-story house.

Green was booked at the local jail and released, and agents began examining his computers. Green had access to other Silk Road users' messages and financial accounts — including Dread Pirate Roberts' — according to documents supporting his guilty plea.

Word of Green's arrest got back to Dread Pirate Roberts the next week. He understood that a key member of his empire was in the hands of law enforcement. It's not clear whether Green was actively cooperating — that information is sealed in court records — but Dread Pirate Roberts reached his own conclusion.

"I have to assume he will sing," he wrote later to the undercover agent, according to court documents in Ulbricht's case. The bad cocaine deal didn't disrupt their rapport.

Dread Pirate Roberts asked for help, claiming that Green had also stolen from Silk Road users before his arrest.

"I'd like him beat up, then forced to send the bitcoins he stole back," Dread Pirate Roberts wrote, according to court documents.

Then, the next day, he added: "Can you change the order to execute rather than torture?"

The request caught the agents on the case by surprise, but they agreed on a fee of $80,000 for the job.

"I don't think that we had any sort of premise early on that this guy was involved in that level of violence," Tuggle said.

By this time, Green was working with authorities to stage the plot, according to a statement Green released to reporters.

"The agents took photos as they faked my murder," Green said.

Authorities took their case to a grand jury in Baltimore and obtained a sealed indictment May 1 charging Dread Pirate Roberts with drug offenses, attempted witness murder and murder for hire. The agents had charges, but they still did not know who Dread Pirate Roberts really was.

By that point, the Maryland agents were working with the New York FBI office. The two teams began to try to figure out what they each had.

"Everyone had that little piece of the puzzle, then it was time to sit at the table and put it together," Eisert said, a process carried out in a series of conferences and phone calls.

They also continued to ratchet up pressure on Silk Road.

In May and July, authorities in Maryland announced that they had seized the assets of a company called Mt. Gox, the largest exchanger of Bitcoins, alleging that it had violated currency trading rules.

Bitcoin exchanges are a critical link between the online wealth being accumulated by Silk Road users and the real world, and the seizure was also part of a bid to smoke out Dread Pirate Roberts. Those cases are still open; Mt. Gox did not respond to a request for comment and has responded in court.

Tuggle said Dread Pirate Roberts began looking for ways to "insulate himself," and soon moved to obtain fake identity documents so he could rent servers under assumed names, according to court documents in Ulbricht case.

In July, Customs and Border Patrol intercepted documents on the way to his San Francisco home at the Canadian border, according to the charging papers.

At the end of the month, HSI agents turned up at the address and finally, they were face to face with the man they believed to be Dread Pirate Roberts.

At around the same time, the FBI made another major step forward, obtaining a complete image of a Silk Road server hosted in another country. Authorities said that image gave them a look at all messages and transactions on the site.

How the FBI tracked down the server, which should have been masked in the Tor system, and exactly how critical it was to unmasking Ulbricht are still unexplained. The FBI New York office declined to answer questions for this article.

"There are a number of theories flying around, some even include the use of [National Security Agency] exploit tools to hack into Silk Road," said Runa A. Sandvik, a researcher at the Tor Project. "I am hoping we learn more during Ulbricht's trial."

Authorities also found a LinkedIn page for Ulbricht. They wrote in the charges against him that it showed clues to his hidden life, including that he was "creating an economic simulation" believed to be Silk Road.

Ulbricht was arrested in October. Silk Road was seized and shut down, and charges were announced against a number of other users of the site.

Among them was Green, who pleaded guilty to a drug charge in Baltimore this month.



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