For two years, cybercrime experts from the FBI pored over the secretive online   
   drug bazaar known as Silk Road -- an underground operation that had become, by   
   the time the FBI shut it down this week, the venue for $1 billion worth of   
   illegal transactions,    
   according to prosecutors. Photographer: Chih Hsueh Tseng/Getty Images   
      
   From an Internet café in San Francisco, a 29-year-old free-market evangelist   
   who called himself “Dread Pirate Roberts” used untraceable web services, an   
   international network of servers and anonymous digital currency to run a   
   global online exchange of    
   cocaine and heroin beyond the reach of the law.    
      
   For two years, cybercrime experts from the FBI pored over the secretive online   
   drug bazaar known as Silk Road -- an underground operation that had become, by   
   the time the FBI shut it down this week, the venue for $1 billion worth of   
   illegal transactions,    
   according to prosecutors. Seeking the mastermind behind it, investigators   
   began picking up clues: an anonymous posting to a website devoted to   
   hallucinogenic mushrooms, recurring references to an Austrian school of   
   economics, and early clues left on    
   public sites including Google and LinkedIn.    
      
   A big break came in July, when a routine inspection of inbound mail from   
   Canada turned up a parcel containing nine counterfeit IDs -- each with a   
   different name, but all featuring the photograph of the same man.    
      
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   According to a 33-page criminal complaint unsealed yesterday in Manhattan   
   federal court, the man in the ID photos was Ross Ulbricht, Silk Road’s alleged   
   overseer. FBI agents arrested Ulbricht in San Francisco the same day at the   
   Glen Park library in San    
   Francisco, where he had gone to log onto a computer, according to a person   
   briefed on the matter.    
      
   The criminal complaint against Ulbricht depicts the dark side of Internet   
   commerce. In it, special agent Christopher Tarbell of the FBI’s New York   
   office described Silk Road as “the most sophisticated and extensive criminal   
   marketplace on the Internet    
   today” -- a virtual bazaar where buyers could find everything from heroin and   
   hacking software to contact information for hit men in more than 10 different   
   countries.    
      
   The Charges    
      
   Ulbricht stands accused of narcotics trafficking, money laundering,   
   computer-hacking conspiracy and, in an indictment unsealed yesterday in   
   Maryland, of attempted murder.    
      
   The genius of Silk Road’s design and the reason it eluded the FBI’s grasp for   
   so long, according to the complaint, was its impenetrability. The site was   
   accessible only on a so-called tor network, which is designed to conceal the   
   true Internet addresses    
   of computers using it. Its exclusive reliance on Bitcoin, an anonymous digital   
   currency, added another layer of protection for its buyers and sellers.    
      
   Since November 2011, Tarbell’s team made more than 100 purchases of drugs from   
   Silk Road vendors, accepting shipments of ecstasy, cocaine, heroin, LSD and   
   other drugs posted from 10 different countries, including the U.S., according   
   to the complaint.    
      
   Magic Mushrooms    
      
   In the FBI’s bid to identify the individual behind Silk Road, an agent on   
   Tarbell’s team combed through Internet postings and discovered the earliest   
   mention of the site on shroomery.org, an informational website for consumers   
   of “magic mushrooms,” in    
   January 2011.    
      
   The posting, from someone with the username altoid, alerted the site’s   
   visitors to Silk Road and asked if anyone had tried it. Two days later,   
   someone using the same username posted a similar message on “bitcointalk.org,”   
   a discussion forum for the    
   virtual currency.    
      
   “The two postings created by ’altoid’ on Shroomery and Bitcoin Talk appear to   
   be attempts to generate interest in the site,” Tarbell wrote. “The fact that   
   ’altoid’ posted similar messages about the site on two very different   
   discussion forums, two days    
   apart, indicates that ’altoid’ was visiting various discussion forums…and   
   seeking to publicize the site among the forum users -- which, based on my   
   training and experience, is a common online marketing tactic for new   
   websites.”    
      
   Austrian Connection    
      
   In October 2011, altoid surfaced again on the Bitcoin forum, seeking an “IT   
   pro” to help build a Bitcoin startup company and directing potential job   
   candidates to the Gmail account of someone named Ross Ulbricht. From a Google   
   profile associated with the    
   account, the FBI learned that Ulbricht had an interest in the Austrian school   
   of economics and the Auburn, Alabama-based Ludwig von Mises Institute.   
   According to the group’s website, it functions as a center of Libertarian   
   political and social theory.    
      
   Similar sentiments are voiced on a page of professional networking site   
   LinkedIn that is also attributed to Ulbricht, according to the complaint. In a   
   LinkedIn profile accessed yesterday, a user identified as Ross Ulbricht   
   describes himself as an “   
   investment adviser and entrepreneur” and lists his interests as “trading,   
   economics, physics, virtual worlds, liberty.”    
   Seeks Hit    
      
   Agents made a connection between Ulbricht and Silk Road: The site’s webmaster,   
   who identified himself as Dread Pirate Roberts, made regular references to   
   Austrian economic theory and the teachings of Mises to justify Silk Road’s   
   existence.    
      
   The New York FBI agents weren’t the only lawmen gunning for Silk Road. In   
   April 2012, a federal agent in Maryland began communicating with Dread Pirate   
   Roberts in an undercover capacity, posing as a drug dealer.    
      
   In January, the undercover agent completed the sale of a small quantity of   
   cocaine to a Silk Road employee and was paid the equivalent of $27,000 in   
   Bitcoin currency. According to the Maryland indictment, Dread Pirate Roberts   
   subsequently asked the    
   undercover agent to murder an employee the site overseer believed to have   
   stolen money from Silk Road.    
      
   During this time, Tarbell’s team in New York tracked the Silk Road webmaster’s   
   online logins to an Internet café on Laguna Street in San Francisco, near an   
   apartment where Ulbricht had moved.    
      
   Intercepted Mail    
      
   Meanwhile, on July 10 of this year, customs officials intercepted the package   
   from Canada as part of what the complaint characterized as a routine   
   inspection. The package, addressed to an apartment on 15th Street in San   
   Francisco, contained nine    
   counterfeit IDs, each in a different name, but all featuring a photo of the   
   same person.    
      
      
   [continued in next message]   
      
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