San Francisco News

SF man charged with running online drug bazaar

Thursday, October 03, 2013
Ross Ulbricht, the alleged mastermind behind Silk Road Bitcoin Ross Ulbricht

A San Francisco man will be in federal court Friday to answer charges he ran a massive online black market for drugs.

This arrest is part of the latest effort by the federal government to crack down on the anonymous online marketplaces that have grown because of virtual currencies and software created to help users browse the web without detection.

In recent months, there have been other arrests; but none as significant as this one.

There's BMR -- Black Market Reloaded. Drugs and even weapons are sold anonymously. If you want pure cocaine, there's Sheep Marketplace. The website Atlantis markets drugs called Sour Diesel or Happy Jack.

But the biggest and most successful of all the online black markets was closed by the feds. And they arrested the young man whom they say ran it.

The 29-year-old entrepreneur looked clean cut and innocent. But the FBI says Ross Ulbricht was secretly living the life of a digital drug lord; operating an online black market called "Silk Road" on the so-called deep web, where fictitious names are used and emails are hard to track.

His pseudonym was Dread Pirate Roberts, like a character in the movie "The Princess Bride."

Court records show Silk Road sold $1.2 billion of illegal drugs in just under three years, generating tens of millions in commissions by being the middleman for those transactions.

Documents say the secret site was used by several thousand drug dealers around the world.

But now Ulbricht is in federal custody on charges related to money laundering, drugs, and computer hacking.

He was arrested Tuesday at the Glen Park branch of the San Francisco Library.

"They heard a crashing sound coming from the science fiction section," library spokesperson Michelle Jeffers said.

According to Jeffers, library staffers went to find out what was happening.

"They walked over to look and they saw a library user being pressed against the window by several other plainclothes, as it turns out, FBI agents," she said.

In recent months, Ulbricht reportedly lived at several addresses.

An apartment on Hickory Street was one of them. Just about 500 feet away is an Internet cafe on Laguna, which he frequented and most likely operated his drug kingdom from his laptop.

Several patrons we spoke to said they recognized his picture but never spoke to him.

All were surprised.

Matt Hayne is a regular here.

"You're sitting here in a cafe and somebody next to you drinking coffee is selling heroin on the other wide of the world?" he said. "It's a little crazy, right?"

Ulbricht has also been charged with trying to hire a hitman to kill a user who threatened to reveal the identities of thousands of other users.

He was arraigned Wednesday, but goes back to federal court on Friday.

(Copyright ©2014 KGO-TV. All Rights Reserved.)

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Tags:
drugs, websites, internet, FBI, crime, san francisco news, vic lee
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