Feds Crack Down on Version 2.0 of Notorious Illegal Drug Websiteby
Government authorities in New York have reported that the operator of a website used for illegal drug transactions has been apprehended in his home town of San Francisco. The website, called Silk Road 2.0, was patterned after a similar model shut down earlier by the FBI. It allowed over 100,000 people to buy and sell illegal drugs anonymously over the Internet.
According to a press release from Preet Bharara, the U.S. Attorney in Manhattan, George Venizelos, local Assistant FBI Director and Peter Edge, Executive Associate Director of Homeland Security Investigations (HSI), Blake Benthall (aka “Defcon”) was arrested in connection with illegal drug trafficking. Benthall is alleged to have resurrected a version of Silk Road, a secret website previously seized by law enforcement, and to be operating Silk Road 2.0, a nearly identical criminal enterprise.
The complaint unsealed in federal court reveals the following details of the nefarious activity: Dating back to 2013, Benthall secretly owned and administered an underground website known as Silk Road 2.0, reputed to be one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet today. The website was operated on the “Tor” network, a special worldwide network designed to conceal IP addresses of computers and thus disguise the true identities of its users.
Since its launch in November 2013, Silk Road 2.0 has been an online resource for thousands of drug dealers and other unlawful vendors and used to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as laundering millions of dollars generated by such unlawful transactions. As of September 2014, the website was generating sales of approximately $8 million per month from an estimated 150,000 active users.
Silk Road 2.0 was created after the government seized the initial Silk Road website in October 2013 and arrested its alleged owner and operator, Ross William Ulbricht (aka “Dread Pirate Roberts”). The original website was set up so that someone could buy and sell illegal drugs and other illegal goods and services anonymously from anywhere in the world without fear of retribution from law enforcement. Prior to its seizure, Silk Road was used extensively to facilitate these types of transactions.
In November 2013—about five weeks after Silk Road was shut down and Ulbricht was arrested—Silk Road 2.0 was launched to fill the void. It mirrored the original website in both appearance and function. Significantly, just like its predecessor, Silk Road 2.0 operated exclusively on the Tor network and required all transactions to be paid by Bitcoin as a means for preserving anonymity and evading detection by law enforcement. Likewise, the openly advertised offerings on Silk Road 2.0 consisted mainly of illegal drugs.
After Silk Road 2.0 was launched, it was controlled for a short time by a co-conspirator using the “Dread Pirate Roberts” moniker of Ulbricht. However, authorities claim that Benthall assumed administration of the site the next month under the Defcon name. He reportedly has owned and operated it continuously since that time, controlling all aspects of Silk Road 2.0. This includes, among other things, the following:
- The computer infrastructure and programming code underlying the website.
- The terms of service and commission rates imposed on vendors and customers of the website.
- The small staff of online administrators and forum moderators who assisted in the day-to-day operation of the website.
- The substantial profits generated from the operation of the illegal business.
During the Government’s investigation, which was conducted jointly by the FBI and HSI, an undercover HSI agent successfully infiltrated the support staff helping to administer Silk Road 2.0. The agent was granted access to private, restricted areas reserved for Benthall and his administrative staff. This enabled HIS to interact directly with Benthall during operation of the website.
Benthall has been charged with a wide range of crimes which could land him in prison for decades. The moral of the story is that online crimes are no more immune from prosecution than the old-fashioned brick-and-mortar crimes.
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...