"It wouldn't be suspicious. He would just leave one day and not come home."
Ars Updates and History on the trial
THE SILK ROAD TRIAL
- Ulbricht tells judge: I’m not going to testify
- Silk Road trial: How the Dread Pirate Roberts embraced violence
- On OkCupid, Ross Ulbricht was a “scientist turned entrepreneur”
- Heroin dealer describes how he started selling on Silk Road
- Silk Road trial: Prosecutors compare Ulbricht’s e-mail with DPR’s online life
The day ended with the government resting its case, leading to a rapid-fire set of three character witnesses who testified to Ross Ulbricht's good character. Defense lawyers made clear their case would be a short one, and closing arguments are expected tomorrow.
The government says that Ulbricht, the 30-year-old defendant who was arrested in 2013, was the Dread Pirate Roberts (DPR). Ulbricht's lawyer has said his client built the site but then handed it off to other people. The defense argues DPR was someone else, and that Ross Ulbricht was turned into the "ultimate fall guy."
On Thursday, the government showed chats where DPR reacted to an extortion scheme. A user named FriendlyChemist messaged DPR, saying that he'd been ripped off by a user named lucydrops. Unless DPR paid $500,000, FriendlyChemist said he would expose the names of thousands of Silk Road customers, which he'd acquired from lucydrops.
Shortly thereafter, a user named "redandwhite" got in touch with DPR, saying he represented a large criminal organization in Western Canada. Redandwhite explained that FriendlyChemist was a drug distributor they worked with.
Today, prosecutors showed how the conversation between redandwhite and DPR swerved into violence. Chats outline how DPR tried to order no less than five murders for hire—but there's no evidence any violence took place. No murders were reported in White Rock, the British Columbia town where FriendlyChemist was supposedly based. The other main "victim" was named today, and he might not have existed either.
The chats were entered into evidence as Brian Shaw, the FBI contractor who sifted through the image of the Silk Road server that agents made, sat in the witness stand.
"If it's not too much trouble"
As the story continued today, Redandwhite kidnapped a man named Xin, who was FriendlyChemist's supplier.
"Great news," Dread Pirate Roberts reacted.
Redandwhite soon lost interest in FriendlyChemist, telling DPR that his people had questioned Xin and ultimately executed him after getting drugs and money from him.
But FriendlyChemist kept threatening DPR, convinced that redandwhite and his people wouldn't ever let up. "i need that money to start over again with my family," FriendlyChemist wrote in one message. On March 29, he gave DPR a deadline to pay up or he'd release user info publicly. "500k is nothing to u but its life and death for me."
DPR asked for a favor from redandwhite, whom he was trying to coax onto Silk Road to sell drugs. "I would like to put a bounty on his head if it's not too much trouble for you," DPR wrote in a politely worded message sent on the Silk Road's private messaging system. "Hopefully this is something you are open to and this can be another aspect of our business relationship."
"As of right now, we don't care about him because we recovered more from Xin than what he took from us, and he also paid for it with his life," wrote redandwhite.
Still, redandwhite was open to helping out. In a bizarre all-business tone, he explained the economics of murder-for-hire to DPR. The cost for a "non-clean" hit would be at least $150,000, while a "clean" hit would be more. "The people we use to do the recon are the hitters themselves," he wrote. "If you want to make it look like an accident, it would cost a lot more. It wouldn't be suspicious. He would just leave one day and not come home."
"I have no problem putting my faith in you and I am sure you will do a good job," responded DPR. "The [bitcoin] exchange rate is above 90 right now, so at $90/btc, $150k is about 1670 btc. If the market tanks in the next few days, I will send more."
"I received the payment," said redandwhite. "I appreciate the offer if bitcoins lower in value. We know where he is. He'll be grabbed tonight."
About 24 hours later, redandwhite had an update: "Your problem has been taken care of... he won't be blackmailing anyone again, ever."
"I trust my hitters to do a good job"
The supposed hitmen had grabbed two laptops, which contained little, and also a USB sticks filled with addresses, presumably of customers.
Under questioning, FriendlyChemist had "spilled everything he knew," said redandwhite. He and Xin had been working together on the blackmail, and a third user, who went by tony76 and nipplesuckcanuck, was involved as well. His real name was "Andrew Lawsry" of Surrey, according to redandwhite.
Lawsry had been defrauding people on Silk Road for a few years.
"Apparently he makes selling accounts, sells for a while and then pulls a big scam and he just keeps creating new accounts after he does his scams," wrote redandwhite.
That got DPR's attention. "What do you think about going after Andrew Lawsry? This guy has probably ripped off millions of $ at this point from me and the rest of the Silk Road community."
"I will send 2 of my guys to go do some recon right now and find out what I can about him and get back to you immediately," wrote redandwhite. "We can discuss price later once we know more."
Redanwhite talked to his "hitters" and got more information. In an April 6, 2013 message to DPR he wrote:
I have found out who Andrew is exactly and who he was picking up his supply from. I talked to his supplier and he said he mainly grabbed Heroin,Coke,MDMA and LSD. He said he always goes through phases where he grabs a ton of product, and then stops for a couple of weeks and then starts again... When he first turned them [FriendlyChemist and Xin] on to the idea of doing this big scheme that he would often talk about how he stole so much money, and that he once stole 15,000 online currency coins from 1 person on this site, and how easy stealing money was on here. Does that ring a bell? Did he steal 15,000 BitCoins from a buyer here? That would be an easy way to find out if this Andrew person is the same person you think it is. Do you have his transaction history to see if he did actually steal 15,000 BitCoins from someone? I trust my hitters to do a good job, and they are excellent at what they do..Which is take people out, or interrogate/scare people, and they told me they didn't think he was lying.
DPR ultimately agreed the best idea was to take out both Lawsry and his three live-in associates for a total of $500,000.
"Our hitters have been watching their house and we have a 1 week window to do it," wrote redandwhite on April 11, 2013. Four days later he wrote, "That problem was dealt with."
On April 21, 2013, redandwhite wrote DPR with some more details. The hitters had found $15,000 in Canadian currency, 1/4 kilo of cocaine, and two ounces of heroin in the place they done the deed.
DPR writes back: "ok, I'll look for you as well, but probably won't be online for the whole day again until Tuesday."
After that, there's only one other communication between the DPR and redandwhite account. It's a strange end to the narrative, especially since the two were considering becoming business partners. They were discussing setting up a secure chat channel, so there may be conversations that the government never acquired or that aren't being shown to the jury in this case.
"Hey—I have some news regarding our organization selling on here," wrote redandwhite on June 1, 2013. "A bunch of chapter leaders flew in to town for a meeting and the main topic of discussion was actually Silk Road. Would you be able to meet on pidgin at 3PM PST on Sunday to discuss? There was quite a bit of stuff covered in the talk."
By the numbers
Prosecutors also showed bitcoin transactions in exactly the amount DPR had agreed to pay for the hits. The bitcoins moved from several addresses the government says were on Ulbricht's laptop, to addresses that redandwhite sent to DPR in private messages.
After the lunch break, Shaw presented an analysis he made of what was sold on Silk Road, based on the server data. The site provided a platform for a total of $182.9 million worth of drugs, he testified. (That's far less than an earlier government statement that the site had sold $1.2 billion). Only four percent of Silk Road sales, by value, were non-drug products.
Other illicit sales included around $1 million of fake IDs and passports and just over $3 million worth of currency, Bitcoin, gold, and silver. (Some Silk Road vendors offered cash in exchange for bitcoins.)
In all, the site contained 1.53 million transactions and hosted 3,748 seller accounts and 115,391 buyer accounts. The total revenue was $213.8 million, or 9,912,070 bitcoins. The site earned earned $13.17 million worth of commissions or 642,455 bitcoins. Those commissions were charged each time a sale was made. (In Shaw's analysis, dollar values were given to bitcoins based on the time of the sale.)
Ulbricht's lawyer Joshua Dratel's cross-examination of Shaw didn't take more than about half an hour.
"You created this, for trial, right?" he asked. Shaw said he had.
"Is there any way to tell whether FriendlyChemist are different people, or the same people?" asked Dratel.
"Not that I can think of," said Shaw.
Just after 4:00pm, Shaw was off the stand. He was the government's final witness. Defense lawyers immediately began presenting their case, with Dratel's associate Lindsay Lewis handling about 30 minutes of direct examination.
Today was the tenth day of testimony in the Silk Road drug trafficking trial. For complete trial coverage, see our series page.