SAN FRANCISCO (AP) — FBI agents found the Austin native in the science fiction section of a small branch of the San Francisco public library, chatting online.
The man known as Dread Pirate Roberts — 29-year-old Ross William Ulbricht — was on his personal laptop Tuesday afternoon, authorities said, talking about the vast black market bazaar that is believed to have brokered more than $1 billion in transactions for illegal drugs and services.
When a half-dozen FBI agents burst into the library in a quiet, blue-collar neighborhood, they abruptly ended Ulbricht's conversation with a cooperating witness, pinned the Texan to a floor-to-ceiling window and then took him off to jail, law enforcement and library spokeswomen said.
Ulbricht was later charged in criminal complaints in federal courts in New York and Maryland. He's accused of making millions of dollars operating the secret Silk Road website and of a failed murder-for-hire scheme, all while living anonymously with two roommates whom he paid $1,000 to rent a room in a modest neighborhood.
Federal authorities shut down the website.
Ulbricht, whose LinkedIn account decries "the use of force by one person over another, has not entered pleas to any of his charges. His federal public defender in San Francisco declined to comment Wednesday. Ulbricht is due back in San Francisco federal court Friday morning to discuss bail and his transfer to New York, where the bulk of the charges have been filed.
He is charged in New York with being the mastermind of Silk Road, where users could browse anonymously through nearly 13,000 listings under categories like "Cannabis," ''Psychedelics" and "Stimulants."
Ulbricht also is charged in Maryland with ordering first the torture, and then the murder, of an employee from an undercover agent. He feared the employee would expose his alias as Dread Pirate Roberts, a fictional character. Court records say he wired the agent $80,000 after he was shown staged photos of the employee's faked torture.
His arrest culminated a two-year-investigation that painstakingly followed a small trail of computer crumbs Ulbricht carelessly left for the FBI to find, according to court documents.
Ulbricht first came to the attention of federal agents in 2011 when they figured out he was "altoid," someone who they say was marketing Silk Road on other drug-related websites the FBI was watching. In October 2011, "altoid" posted an advertisement for a computer expert with experience in Bitcoin, an electronic currency, and gave an email address.
From there, investigators began to monitor Ulbricht's online behavior closely, according to the court records. Investigators said Ulbricht was living within 500 feet of a San Francisco Internet cafe on June 3, 2013, when someone "logged into a server used to administer the Silk Road website."
Court documents show investigators slowly connected Ulbricht to Silk Road by monitoring his email and picking up on some slipups, including using his real name to ask a programmers' website a highly technical question about connecting to secret sites like Silk Road.
His final mistake, according to the court papers, was ordering fake identification documents from a Silk Road vendor from Canada. One of the nine documents was a California driver's license with Ulbricht's photograph, birthdate but a different name. The package was intercepted at the border during a routine U.S. Customs search.
On July 26, Homeland Security investigators visited Ulbricht at his San Francisco residence. He "generally refused to answer questions," the agents said.
The investigators left that day without arresting Ulbricht, who holds a bachelor's of science degree in physics from the University of Texas at Dallas and a master's degree from Penn State University.
They returned Tuesday and arrested him at the library. He faces the prospect of life in prison if convicted of all the charges.
The Silk Road website protected users with an encryption technique called "onion routing," which is designed to make it "practically impossible to physically locate the computers hosting or accessing websites on the network," court papers said. One listing for heroin promised buyers "all rock, no powder, vacuum sealed and stealth shipping," and had a community forum below where one person commented, "Quality is superb."
The defendant announced in a website forum in 2012 that to avoid confusion he needed to change his Silk Road username, according to court papers released Wednesday. He wrote, "drum roll please ... my new name is: Dread Pirate Roberts," an apparent reference to a swashbuckling character in "The Princess Bride," the 1987 comedy film based on a novel of the same name.
As of July, there were nearly 1 million registered users of the site from the United States, Germany, Russia, Australia and elsewhere around the globe, the court papers said. The site generated an estimated $1.2 billion since it started in 2011 and collected $80 million by charging 8 to 15 percent commission on each sale, they said.
Federal authorities shut the site down and arrested Ulbricht on Tuesday afternoon in a branch of San Francisco's public library. Ulbricht was online on his laptop chatting with a cooperating witness about Silk Road when FBI agents from New York and San Francisco took him into custody, authorities said.
A library system spokeswoman, Michelle Jeffers, said she was told by staffers that on Tuesday afternoon they heard a loud commotion in the science fiction section of the library and saw a young man, who appeared to offer no resistance, pushed up against a floor-to-ceiling window by plainclothes FBI agents as they handcuffed him.
Ulbricht, 29, made an initial appearance in a San Francisco court on Wednesday, authorities said. A bail hearing was set for Friday. There was no immediate response to messages left with Ulbricht's attorney.
A criminal complaint said Ulbricht "has controlled and overseen all aspects of Silk Road."
The court papers cite a LinkedIn profile that says Ulbricht graduated from the University of Texas with a physics degree and attended graduate school in Pennsylvania. It says he has focused on "creating economic simulation" designed to "give people a firsthand experience of what it would be like to live in a world without the systematic use of force."
Along with drugs, the website offered various illegal services, including one vendor who offered to hack into Facebook, Twitter and other social networking accounts and another selling tutorials on how to hack into ATMs. Under the "Forgeries" category, sellers advertised forged driver's licenses, passports, Social Security cards and other documents.
Undercover agents in New York made more than 100 purchases of LSD, Ecstasy, heroin and other drugs offered on the site, the papers said.
The Maryland indictment alleges Ulbricht told an undercover investigator posing as a drug dealer this year he would pay the undercover to "beat up" a former employee he believed had stolen money from Silk Road. Later, it said, he wrote to ask whether he could "change the order to execute rather than torture" and agreed to make two payments of $40,000 each to get the job done.
The New York complaint cites messages from Ulbricht it says showed he plotted to kill another person who was trying to extort him.
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