Man Behind Silk Road Website Is Convicted on All Counts

By BENJAMIN WEISERFEB. 4, 2015

A California man behind the website Silk Road, once a thriving online black market for the sale of heroin, cocaine, LSD and other drugs and illicit goods, was convicted on Wednesday of all seven counts related to the enterprise.

The verdict against the defendant, Ross W. Ulbricht, was delivered swiftly: Jurors began deliberating in the morning, and reported that they had reached a consensus about 3 1/2 hours later.

Prosecutors had portrayed Mr. Ulbricht, 30, as a “digital kingpin” who ran the website on a hidden part of the Internet, where deals could be made anonymously and without the scrutiny of law enforcement.

Evidence showed that Silk Road generated revenues of more than $213 million from January 2011 to October 2013, when Mr. Ulbricht was arrested by the Federal Bureau of Investigation in a library in San Francisco while he was logged on to his laptop as Dread Pirate Roberts, the pseudonym under which prosecutors said he operated the website. Deals were conducted in Bitcoins, and Mr. Ulbricht took millions of dollars in commissions, the government said.

The trial in Federal District Court in Manhattan was novel because of its technological intrigue and the way it delved into Internet culture; one debate erupted over whether smiley faces and other emoji in digital messages should be read aloud to the jury, or only shown to them. But the case also highlighted the Internet’s impact on a classic street crime, moving it to a safer and more anonymous venue and broadly expanding markets.

“That’s the legacy of Silk Road,” Serrin Turner, a federal prosecutor, said in a closing argument this week. “It lowered the barriers to drug dealing by enabling drug dealers to reach customers online they could have never met on the street.”

Prosecutors also introduced evidence that Mr. Ulbricht had paid hundreds of thousands of dollars in Bitcoins to commission the murders of several people whom he saw as threats to his business. (The government has said there was no evidence anyone was ever harmed.)

The four most serious convictions, including distributing narcotics on the Internet and engaging in a continuing criminal enterprise, carry potential life sentences. The criminal enterprise count also carries a minimum sentence of 20 years. Judge Katherine B. Forrest will sentence Mr. Ulbricht on May 15.

Preet Bharara, the United States attorney for the Southern District of New York, said Mr. Ulbricht’s arrest and verdict “should send a clear message to anyone else attempting to operate an online criminal enterprise.”

“The supposed anonymity of the dark web is not a protective shield from arrest and prosecution,” Mr. Bharara said.

Mr. Ulbricht stood silently as the verdict was delivered, and afterward, looked back at his parents and other supporters, offering what appeared to be words of reassurance.

Later, outside the courthouse, Mr. Ulbricht’s father, Kirk, said he was outraged by the verdict and the trial.

“We’re very upset,” his wife, Lyn Ulbricht, said. “We love our son. We don’t think he belongs in prison.”

Joshua L. Dratel, the lead defense lawyer, said there would be an appeal, and asserted that there were “significant errors during the course of the trial,” including the judge’s precluding of some witnesses and evidence.

Early in the trial, Mr. Dratel argued that his client was not the mysterious Dread Pirate Roberts, a character drawn from the book and movie “The Princess Bride,” and he suggested that Mr. Ulbricht had been framed.

Mr. Dratel conceded that Silk Road was Mr. Ulbricht’s idea, but he said Mr. Ulbricht had handed the operation off to others after only a few months before being lured back as a “fall guy.”

But the prosecutors, Mr. Turner and Timothy T. Howard, undermined that position with what Mr. Howard called “the mountain of evidence” showing Mr. Ulbricht had run Silk Road.

“It was his baby, and he stayed with it enthusiastically for nearly three years,” Mr. Turner told the jury.

The government introduced journal entries found on Mr. Ulbricht’s laptop, including one in which he described how he had created Silk Road.

A college friend, Richard Bates, also testified that he had once insisted on knowing what Mr. Ulbricht was working on, after Mr. Ulbricht repeatedly asked him for programming assistance.

“Did the defendant share a secret with you?” a prosecutor asked.

“Yes, he did,” Mr. Bates said, adding, “He shared with me that he created and ran the Silk Road website.”