Silk Road Creator’s Life Sentence Fails to Deter Online Drug Transactions


By Paul Gregoire and Ugur Nedim

Ross Ulbricht, founder of the online drug marketplace Silk Road, had his life sentence confirmed by a US Federal appeals court on May 31. Mr Ulbricht, known online as Dread Pirate Roberts, created the site in 2011. In its heyday, Silk Road was turning over an estimated US$15 million in transactions annually.

Silk Road opened for business in February 2011. The marketplace operated on the dark web: an encrypted online network that connects users via the Tor browser. Developed by the US Navy, Tor allows users to remain anonymous, as it routes them through encrypted relays around the world.

The online marketplace allowed people to purchase a wide range of items including illegal drugs, from cannabis to methamphetamine to heroin. Their purchases were sent to nominated residences using normal postal services.

The details of the transactions also remained anonymous, as they were made via Bitcoin: an online digital currency.

Needless to say, the venture annoyed the hell out of authorities. With the war on drugs raging, an online marketplace mailing some of the most contraband goods to people’s front doorsteps wasn’t looked upon favourably. And neither was the fact that the transactions could not be taxed.

Mr Ulbricht envisioned Silk Road as an online libertarian marketplace, beyond the reach of law enforcement and taxation office; but the FBI had other ideas. After intense investigations, the bureau arrested Ulbricht in October 2013, and shut down the site as well.

Deterrence doesn’t work

To the shock of many, Mr Ulbricht was sentenced to life imprisonment, without the possibility of parole, by Manhattan’s US District Court on May 29 2015. He was convicted on seven counts, including trafficking in narcotics, money laundering and a charge usually reserved for mob kingpins.

During the trial, accusations were made that Ulbricht had paid for the murder of six people, but no charges were ever brought against him on these matters. Prior to Ulbricht’s sentencing, the court heard from the parents of children who had overdosed on drugs that were purchased from the site.

Judge Katherine Forrest could have sentenced Ulbricht to a minimum of 20 years in prison, but instead chose the most severe punishment. The judge found that Ulbricht’s purpose was to be beyond the law, which was “troubling,” and the sentence was to act as a deterrent to others.

However, research by Boston College sociologist Isak Ladegaard suggests the sentence has had the opposite effect. He told Wired that after Ulbricht’s sentencing, there was actually a spike in people buying and selling drugs online on other dark web sites, including Alphabay.

One explanation for this, Ladegaard explained, is that media coverage of the trial drew attention to the ease of purchasing drugs online. The academic said the case exemplified the fact that harsh sentencing does not have a deterrent effect when it comes to computer crimes.

‘Kingpin’ comes undone

At the height of his success, Mr Ulbricht gave an interview to Forbes magazine under his pseudonym Dread Pirate Roberts.  “At its core, Silk Road is a way to get around regulation from the state,” he told the magazine. “The state tries to control nearly every aspect of our lives, not just drug use.”

Mr Ulbricht was arrested in the Glen Park Branch Library in San Francisco, whilst he was allegedly on his laptop running the Silk Road site and chatting with an undercover FBI agent. But it wasn’t through his dark web activities that agents actually tracked him down. Rather, they managed to detect Ulbricht through a social media and IRL trail he unwittingly left.

On his LinkedIn page, Ulbricht had boasted that he was “creating an economic simulation” outside of the “systemic use of force” of “institutions and governments.” He was also found to have ordered nine fake IDs with his own photo on them, which were to be used to rent servers.

In May 2012, Ulbricht logged into a user registered site called Stack Overflow to ask technical questions about coding for a hidden site on Tor. He also connected with courier services via Google+ using his own name.

Ulbricht also allegedly paid a man online to kill a former employee. The hitman turned out to be an undercover cop.

The appeal dismissed

At the appeal case last week, Ulbricht’s legal team argued that the surveillance of his Facebook page, Gmail account and home network, along with the seizure of his laptop were unconstitutional. However, the three judge panel said the searches were all backed by a warrant.

The lawyers also raised concerns over the fact that two of the investigators involved in the case were later found to be corrupt. Secret Service agent Shaun Bridges stole thousands of dollars’ worth of bitcoins from Silk Road, while DEA agent Carl Mark Force attempted to extort money from Ulbricht.

But the judges found that the misconduct of the two agents did nothing to effect any of the evidence obtained during the investigation. And the two Baltimore agents were not involved in the final phase of the investigation, which was taken over by New York agents.

The end of prohibition

However, in their summing up, the three judges did make it known that they don’t think the US “policy of prohibition, backed by severe punishment” is the best way to go. They wrote that many “reasonable people” disagree with “harsh sentencing” for illicit drug distribution, along with their “criminal prohibition.”

When it comes to illegal drugs in the US, it does seem that authorities simply won’t bend. The judges refused to reduce Ulbricht’s sentence, but only recently Chelsea Manning had her 35 year sentence reduced to 7 years, and this was after she was convicted on charges of treason.

“It is very possible that, at some future point, we will come to regard these policies as tragic mistakes,” the three-judge appellate panel continued. “And adopt less punitive and more effective methods of reducing the incidence and costs of drug use.”

But for 33-year-old Ulbricht this “future point” will come too late, as despite their reservations about the system of prohibition, the judges found that Dread Pirate Roberts should be kept behind bars for the rest of his life.

 


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