pkg griffin silk road illegal website founder bust_00024204.jpg
FBI busts founder of online drug market
03:20 - Source: CNN

Program note: For more on this story, watch Drew Griffin’s report on AC360, tonight 8 pm ET.

Story highlights

Alleged creator of the Internet's biggest criminal marketplace arrested in U.S.

The FBI claims Ross Ulbricht, 29, earned $80 million in commission from the shadowy site

It had nearly a million registered users, responsible for an estimated $1.2 billion in sales

Despite the site's secrecy, Ulbricht was tracked after a number of online slip-ups

CNN  — 

The FBI caught the man accused of creating Silk Road – the shadowy e-commerce site it describes as “the most sophisticated and extensive criminal marketplace on the Internet today” – after he allegedly posted his Gmail address online, according to court documents.

Federal agents swooped on Ross William Ulbricht in a San Francisco public library Tuesday afternoon, charging the 29-year-old American with narcotics trafficking, computer hacking and money laundering. They allege he is “the Dread Pirate Roberts,” the Silk Road’s mysterious founder, who drew his pseudonym from the feared, fictitious character in the film The Princess Bride.

The FBI claims the former physics and engineering student even publicly alluded to his alleged criminal enterprise on his LinkedIn profile, with a statement describing how his goals had “shifted” in accordance with his libertarian economic views since leaving grad school at Pennsylvania State University.

Ulbricht’s LinkedIn profile states that, since completing his studies in 2010, he has focused on “creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force” of the kind imposed by “institutions and governments.”

“I want to use economic theory as a means to abolish the use of coercion and agression (sic) amongst mankind,” he wrote.

In the indictment against Ulbricht, filed in a New York court, the FBI cyber-crime specialist who led the investigation, Christopher Tarbell, stated that he believed “that this ‘economic simulation’ referred to by Ulbricht is Silk Road.”

The Amazon.com of vice

Ulbricht as pictured in his LinkedIn profile, which the FBI alleges alluded to Silk Road.

The FBI swiftly shuttered the site, an underground digital marketplace that, since its inception in 2011, has allowed users to anonymously trade illegal goods and services in near total secrecy, using the digital currency bitcoin, and an encryption network called Tor that routes traffic through a “hidden” area of the Internet known as “the dark web.”

Time.com: Online drug markets alive and thriving

Tarbell said the site “sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites,” and carried listings for hard drugs, hackers, counterfeit cash, forged ID documents, firearms, ammunition, even hitmen – one of whom Ulbricht is alleged to have enlisted to kill a blackmailer.

According to the indictment, Silk Road had acquired nearly a million registered users worldwide – about 30% of whom were based in the U.S. – in its two and a half years of operation, providing them guidance on how to encrypt their communications and vacuum-pack their wares before shipping through the postal service to avoid detection by law enforcement. Last year, it said, the site added a “stealth mode” for users who considered themselves “at risk of becoming a target for law enforcement.”

The indictment said the site had generated over 9.5 million bitcoins in sales revenue and over 600,000 bitcoins in commissions for its owner, allowing the site to employ a team of administrators. The value of bitcoins has fluctuated dramatically since the digital currency was created – it plummeted after Ulbricht’s arrest – but Tarbell estimated Silk Road’s turnover to be worth about $1.2 billion in sales, and $80 million in commissions.

In February, an Australian drug dealer became the first pers