NEW YORK – The accused mastermind of the online black market bazaar Silk Road pleaded not guilty Friday to drug and money laundering charges in federal court in New York.
Ross William Ulbricht, 29, wearing a blue prison suit for his arraignment, denied four criminal charges in a case that has opened a window onto the shadowy world of online crime.
Authorities claim Ulbricht is the infamous “Dread Pirate Roberts” who operated the underground site, an encrypted network that allegedly sold illicit items including drugs, hacker tools and “hit” services to kill people.
US District Judge Katherine Forrest set a trial date of November 3 in the case. Most of Friday’s hearing focused on logistics of the handoff computer data and other evidence that will be turned over to the defense.
Ulbricht’s attorney Joshua Dratel said he is considering a request for bail, but will wait until the discovery before potentially launching such a request. Prosecutors have previously said they would oppose bail.
Ulbricht smiled at family a couple of times after being led into the courtroom by guards. He appeared calm throughout a 25-minute hearing.
The government arrested Ulbricht in October on a criminal complaint charging him with drug trafficking and related offenses.
An indictment unsealed Tuesday charged Ulbricht with money laundering and conspiracy to commit computer hacking, and with running a criminal enterprise, which carries a minimum sentence of 20 years in prison.
The charges include the allegation that Ulbricht “solicited a Silk Road user to execute a murder-for-hire of another Silk Road user, who was threatening to release the identity of thousands of users of the site,” according to the document.
Assistant US Attorney Serrin Turner said the investigation into Silk Road is ongoing and more charges could be added against Ulbricht.
Family and friends of Ulbricht have stood by the defendant, setting up a “Free Ross” website to raise funds for his legal defense. A minute-and-a- half video includes testimonials of friends and family as to Ulbricht’s gentle and generous character.
“He’s doing about as well as can be expected under the circumstances, which are difficult,” said Ulbricht’s mother, Lynn Ulbricht, who said the family visits with her son weekly.
“He’s engaged,” Dratel said of his client. “We’re waiting to be able to review things.”
But government prosecutors have presented a very different picture of Ulbricht, calling him the brains behind “the most sophisticated and extensive criminal marketplace on the Internet,” according to the indictment.
Silk Road sold illegal goods to “well over a hundred thousands buyers worldwide,” the indictment said. Ulbricht pocketed commissions worth “tens of millions of dollars” from the illicit sales, the indictment said.
As part of the operation, US authorities seized a large cache of Bitcoins, a virtual currency used in Silk Road transactions.
Prosecutors say they have seized 173,991 Bitcoins, worth over $150 million at present exchange rates, in the investigation.
Three others have been charged in connection with the operation of Silk Road.
Authorities also filed criminal charges in January against two operators of a Bitcoin exchange, claiming they violated money laundering laws by allowing its users to buy drugs and other illicit goods on the Silk Road website.
Ulbricht was using a laptop in a San Francisco library when he was arrested on October 1 and investigators were expected to scour the machine for evidence he is indeed “Dread Pirate Roberts.” The online moniker appeared to be taken from a character in the film “The Princess Bride.”
But in November, a message saying that Silk Road was back in business turned up on a social network, signed “Dread Pirate Roberts,” or DPR. It remains unclear if the author merely assumed the title after Ulbricht’s arrest or had previously been running the website.