Silk Road founder claims he was fall guy for illegal drug site

The trial of the mastermind behind Silk Road began with the defense admitting Ross Ulbricht founded the illicit online drug marketplace but arguing he really wasn't the true operator of the site.

Seth Rosenblatt Former Senior Writer / News
Senior writer Seth Rosenblatt covered Google and security for CNET News, with occasional forays into tech and pop culture. Formerly a CNET Reviews senior editor for software, he has written about nearly every category of software and app available.
Seth Rosenblatt
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Supporters of Ross Ulbricht, the alleged creator and operator of the Silk Road underground market, stand in front of a Manhattan federal court house on the first day of jury selection for his trial on Tuesday in New York City. Spencer Platt, Getty Images

The man who prosecutors claim is the mastermind behind the the Silk Road illegal online drug marketplace is not who they say he is.

That, at least, was the argument Tuesday of defense attorney Joshua Dratel in his opening statements at the trial of Ross William Ulbricht. The government alleges Ulbricht ran the criminal marketplace known as Silk Road, where the underworld sold illegal drugs, weapons and hacking services, according to reports by Wired, Bloomberg and other media covering the trial this week in New York.

Dratel acknowledged for the first time that Ulbricht, a former Eagle Scout, founded and initially oversaw the $1.2 billion contraband site, which the federal government shut down in October 2013. But Ulbricht, who called himself the Dread Pirate Roberts from the movie and novel "The Princess Bride," was just a "fall guy" who handed control of his "economic experiment" to others when daily operations became "too much for him," and returned to run the site just as federal authorities closed in, Dratel argued.

"Ross was not a drug dealer, Ross was not a kingpin, Ross was not involved in a conspiracy to do anything like that," Dratel told the court, according to Bloomberg.

In the story of The Princess Bride, Dread Pirate Roberts is the name used by pirate captains who assume their predecessor's identity.

Assistant US Attorney Timothy Howard told jurors Ulbricht, 30, made millions of dollars by taking a cut of every sale made through Silk Road. Contraband goods and services were paid for with bitcoin, a digital currency that lets users exchange money anonymously.

"His idea was to make online drug deals as easy as online shopping," Howard said, according to Ars Technica. "And that's exactly what he did."

Ulbricht, who was arrested in October 2013, pled not guilty to charges including attempting to arrange six murders, computer hacking, money laundering and conspiracy to traffic narcotics. He faces a maximum life sentence if convicted.

On the Road with drugs, bitcoin and murder

Silk Road was founded in early 2011 as a bazaar for illegal drugs, and garnered early attention because buyers and sellers were able to conduct business using bitcoins.

By February 2014, when, prosecutors charged Ulbricht with running a criminal enterprise, the Justice Department claimed more than 100,000 people had used Silk Road. The site allegedly had around 13,000 listings for drugs such as cannabis, ecstasy, opioids, psychedelics and stimulants.

The prosecution based its argument on Ulbricht's alleged cut of Silk Road transactions and statements he'd made saying he founded, ran the site and managed its 10 employees. Howard alleged Ulbricht confessed to a friend, who has not yet been named in court, that he was behind the entire site, reported Wired. "He showed him the Silk Road, and he bragged that he was the mastermind behind the entire thing," Howard said.

The government also will present evidence Ulbricht tried to arrange six murders that were not carried out. In a separate case, he faces one charge of attempting to arrange a murder in Baltimore.

About a dozen protesters outside the courthouse in lower Manhattan yesterday raised placards in support of Ulbricht. Some handed out jury nullification pamphlets, which advised jurors to acquit people charged under laws they don't agree with, a move defense attorney Dratel condemned, reported Forbes.

The prosecution called Jared Der-Yeghiayan, an undercover agent for the Department of Homeland Security, to testify about his experiences as a customer service agent for Silk Road for at least 10 months, according to multiple news reports on the second day of testimony on Wednesday.

The trial is expected to last up to six weeks, US District Judge Katherine Forrest, who is presiding over the trial, told jurors.

Lawyers for the government and Ulbricht declined to say whether he will take the stand.