Silk Road Mom Learns Sad Truth About Son
The light pink shirt that Ross Ulbricht was wearing when he came into Manhattan federal court from the holding pen on Wednesday seemed to make his mom forget everything else for one wonderful moment.
“It looks good,” she told him.
Lyn Ulbricht appeared to understand that he had worn it for her. He also had on a gray sweater.
“The sweater looks good,” she added. “Is it comfortable?”
“It’s comfortable,” he replied.
She could do nothing to extricate her 30-year-old son from the charges that he ran an Internet marketplace for illegal drugs called Silk Road, charges that carry a maximum term of life in prison.
But she was still a mom, and during a lull in the trial the day before she had asked him from the spectators’ benches how all his clothes were fitting. He had been sitting in the defendant’s seat wearing a white shirt under his blazer and he gestured that the sleeves were too short.
She had reminded him that he also had a light pink shirt.
“There’s a stain in the collar,” he had said.
Light pink is not a hue favored by middle-class young men who find themselves behind bars for the first time, and a cynic might have figured he was just making an excuse.
“Any way you can hand wash it?” she had asked.
“No,” he had replied.
“How do you wash it?”
“I don’t think it’s washed.”
Ross had been the easiest of babies and he had literally been an Eagle Scout and he had never seemed to her to be anything but kind and thoughtful and generous, the very opposite of a drug kingpin.
His mom blew him a kiss as he was led back into the holding pen on Tuesday afternoon, a kiss that seemed well-deserved when he returned to the courtroom on Wednesday morning.
For there he was in that light pink shirt. He gave the collar a little tug as he re-assumed the defendant’s chair. And it seemed that maybe a guy who would wear this shirt for his mom might also be as innocent as she had often declared him.
She now motioned from her spectator’s bench for him to smooth out some bed head. He reached up.
“No the other side,” a relative said.
He patted down the errant hair.
“Looking good,” the mom said.
She smiled, seeming to feel the day was starting well. And that made her all the more difficult to watch as FBI Agent Thomas Kiernan testified about what he had found in her son’s Samsung 700Z laptop after he was arrested in a San Francisco library in October 2013.
Kiernan described the arrest and said the FBI’s aim had been to surprise Ross while he was on the Silk Road website as its mastermind, Dread Pirate Roberts, and grab him before he could close the laptop and trigger the encryption.
“The goal was to get the laptop in an unencrypted state,” Kiernan testified.
Two other agents, a male and female, had staged a fake domestic dispute behind Ross as he chatted online as Dread Pirate Roberts with an undercover.
“We were trying to create a diversion,” Kiernan told the court.
Ross had turned around to look, and the male agent had grabbed his open laptop, then passed it to the female agent.
Ross was handcuffed and Kiernan immediately began taking pictures of the laptop’s screen with his FBI-issued BlackBerry, beginning with the interrupted chat and continuing as he hit the back button. The photos documented that Ross had indeed been online as Dread Pirate Roberts and that he previously had been on an administrative page that the site’s founder had dubbed the “mastermind” page.
Earlier in the week, the Ulbricht family had admitted in an open email that it had been stunned when defense attorney Joshua Dratel allowed during his opening argument that Ross had founded Silk Road.
But Dratel had insisted that Ross had done so only as an “economic experiment” and had turned over the website to somebody else, who had then set him up as a “fall guy” when the feds closed in.
That assertion became all the more difficult to believe as Kiernan proceeded to testify about several journal entries that were recovered from the laptop.
The first entry was from 2010, after a series of business disappointments. Ross had received a master’s degree at Pennsylvania State University and he had embarked on what he termed “a promising career as a scientist.” But then he had been swept up in the fever that has led many young people to abandon science and become entrepreneurs.
Ross had tried to start an investment company and then a computer game company and then an online used-book site called Good Wagon that donated 10 percent of its profits and gave unsold books to prison libraries. He had then pursued what seemed to be a promising opportunity with a “private equity venture.”
“Unfortunately, they were all smoke and mirrors and after several weeks of them not returning my phone calls, I realized there was not an opportunity for me there,” the journal says. “This was extremely discouraging. There I was, with nothing.”
Ross had urgent need of employment.
“So I turned to Craigslist and found American Journal Experts. For the next six months, I edited scientific papers written by foreigners. It sucked. The hours were flexible, but it drained me. I hated working for someone else and trading my time for money with no investment in myself.”
He came to a decisive moment.
“I began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could lead back to them.”
He thought he had largely figured out the technical aspects, determining that such a thing was indeed possible in the “darknet,” where you can be all but untraceable.
“I had been studying the technology for a while, but I needed a business model and strategy. I finally decided that I would produce mushrooms so that I could list them on the site for cheap to get people interested.”
He headed for a spot in rural Texas with Petri dishes and a humidifier and other necessities for producing psychedelic “shrooms.”
“I worked my ass off setting up a lab in a cabin out near Bastrop off the grid. In hindsight, this was a terrible idea and I would not repeat it, but I did it and produced several kilos of high-quality shrooms.”
He must have been nearly busted, for he notes at one point that, “I was a hair’s breadth from going to jail before the site even launched.”
The tech involved in setting up the website was proving more difficult than he had anticipated.
“By the end of a year, I still didn’t have a site up.”
In 2011, he finally was able to launch Silk Road. He announced it on forums for the virtual money called bitcoins.
“A few days after launch, I got my first sign up, and then my first message. I was so excited I didn’t know what to do with myself. Little by little, people signed up, and vendors signed up, and it happened. My first order.”
Over the next few months, he sold roughly 10 pounds of shrooms, dealing in supposedly untraceable bitcoins.
“Before long, I was completely sold out… Traffic started to build. People were taking notice, smart, interested people. Hackers.”
He was almost too busy.
“Between answering messages, processing transactions, and updating the codebase to fix the constant security leaks, I had very little time left in the day, and I had a girlfriend at this time!”
A “benevolent hacker” gave him some tech tips in rewriting the site. The relaunch led to a harrowing crisis.
“Somewhere, the site accounting wasn’t balancing, and I was losing hundreds of dollars every few hours. I started to panic. I tried everything I could think of, but I couldn’t stop the bleeding. It was getting to be thousands of dollars and I was losing sleep and getting slow. I didn’t give up, though. I rewrote the entire transaction processor from scratch and somehow it worked. To this day I don’t know what the problem was.”
Such perseverance might have been admirable had the site not been selling illegal drugs.
“Most interestingly, two U.S. senators [Sen. Chuck Schumer of New York and Sen. Joe Manchin of West Virginia] came out against the site and against bitcoin. They made a big deal out of it and called for a shutdown of the site. I started to get in a bad frame of mind… The US gov’t, my main enemy was aware of me and some of its members were calling for my destruction.”
But he managed to enter what he called “a more calm and harmonious phase.”
“Most importantly, the market began its path to maturity.”
He says of 2011, “I am creating a year of prosperity and power beyond what I have ever experienced before. Silk Road is going to become a phenomenon… I have many friends I can count on who are powerful and connected.”
At a point when a visit by his parents was pending, the work was such that he had to turn down invitations to a beach party and a warehouse party.
“Too much time away from Silk Road and there is so much to do before the rents get here.”
At the end of that year, he wrote of “a larger vision.”
“A brand that people can trust and rally behind. Silk Road chat. Silk Road exchange. Silk Road credit union. Silk Road market. Silk Road everything!”
But he was still somebody living a secret life. And he already regretted having told some friends that he worked on a bitcoin exchange.
“I always thought honesty was the best policy, and now I don’t know what to do. I should have told everyone I am a freelance programmer or something, but I had to tell half-truths. It felt wrong to lie completely so I tried to tell the truth without revealing the bad part, but now I am in a jam. Everyone knows too much. Dammit.”
A spreadsheet found in the laptop valued the site at $104 million and showed transactions at one point exceeding $14 million.
As a promotion, the site held a $4,000 contest on April 20—420 being a popular code for pot. The winner proved to be a junkie who had been trying to go clean. The windfall promised to be of little help.
“Maybe our next prize will be three month in rehab.”
Ross joked about attracting younger users.
“Sponge Bob canoe and life size My Little Pony with every purchase of 50 bitcoin or more.”
In one of many chats found in the laptop along with the journal entries, an assistant he called “inigo” informed him that one of the vendors was offering cyanide.
“Cyanide has a bad reputation, [but] there are plenty of legitimate uses,” Ross wrote “I think we’re going to allow it… It’s a substance and we want to err on the side of not restricting things.”
“This is the black market after all :),” inigo replied.
“It is, and we are bringing order and civility to it,” Ross wrote.
One continuing difficulty was hiring reliable assistants to help handle the day-to-day tasks.
“Working for a criminal enterprise isn’t entirely attractive to everyone.”
In another chat, Ross assured a candidate he called Scout that with all the transactions presumably untraceable, the risk of getting caught was extremely small.
“Put yourself in the shoes of a prosecutor trying to build a case… What evidence could they pin on you?”
Even as the FBI moved to arrest Ross in that San Francisco library, they might not have had much evidence to pin on him had the agents not prevented him from closing that laptop.
Kiernan made sure it did not sleep or otherwise enter that dread “state of encryption” before they were able to copy its hard drive.
“I just ensured the laptop stood on,” Kiernan testified.
As one damning bit of evidence after another from the laptop was entered into evidence on Wednesday morning, Lyn Ulbricht sat looking battered in the tender part of her that must have been most deeply touched when she first held that easy baby three decades ago.
At the lunch break, Ross stood and turned toward his mother, raising his eyebrows.
But his mom did not even look at him as he was escorted back to the holding pen in that light pink shirt.
She would later say via Twitter that she had simply been distracted at that moment. “I’d NEVER look away from him,” she wrote. “Plse wait for the defense.”