DAY 2 in Ross Ulbricht Trial
Before proceedings Judge said there were no signs or pamphleteers this morning and “that issue is resolved”. Issue was activist approaching jurors with signs and brochures.
Ross seemed in good spirits, waved to his family and had big smile
Direct Examination Part 2 – DHSI Special Agent Jared Der-Yeghiayan
Der-Yeghiayan (Agent) explains that a “hidden service” is a site you can only access through TOR (The Onion Router).
State is painting picture for that Ross used TOR for the purpose of hiding his actions.
State spends much time explaining TOR. Getting somewhat technical. Showed diagram of TOR nodes.
Jury seems confused, not entirely understanding.
State breaking down Silk Road site. How to login. what front page looked like. categories.
Der-Yeghiayan tells jury that in April 2012, Silk Road had drugs listed and in October 2013 there were 13,810 listings.
State shows screenshot from March 6th, 2013 of Der-Yeghiayan undercover buy.
State shows listing with “I am aware of latest stealth packaging” in notes.
Assistant U.S. Attorney Serrin Turner – “What is Bitcoin?”
Der-Yeghiayan – “a virtual currency used to buy and sell things in trade electronically on the internet”
“Bitcoin anonymizes you”
“There is nothing illegal about Bitcoin”
State shows jury how to buy bitcoin.
Der-Yeghiayan explains screenshots of Mt. Gox account. Screenshot of bank wire transfer. Screenshot of USD received to Mt. Gox. Screenshot of BTC purchase on Mt. Gox. Screenshot of transfer to Silk Road account.
Der-Yeghiayan Tells jury in Oct. 2011 btc was $2-$4
in April 2013 btc was $250
in October 2013 btc was $100
Der-Yeghiayan Tells jury about blockchain. A public ledger. Keeps track of transactions.
Shows screenshot of Blockchain.info and shows how bitcoins are accounted for.
I thought the explanation was very confusing and jury didn’t seem to get it.
Der-Yeghiayan shares that while working undercover as a customer on Silk Road he did over 50 buys from 40 dealers in 10 countries. Shows jury pics of drugs that were bought w/ pics of packages and drugs that came in them.
State enter chart showing an expert tested each of the drugs and fund that almost all of them tested positive as illegal drugs.
State shows many screenshots of Fake IDs and fraudulent documents and computer hacking.
Showed a screenshot of a pack of over a dozen hacking tools.
Showed screenshot of offers for people to buy $20 bills, discussed how criminal could use this listing to trade their coin for dollars without government knowing.
Agent tells jury he never sold drugs, only bought them.
Covering Silk Road forum.
Show screenshot of forums. One of them shows comments with messages from username Cirrus.
Prosecutor reads from how to Wiki Silk Road Buyers Guide
Buyers guide explains what a tumbler is. Agent tells jury tumblers make it harder for law enforcement to track transaction.
the state is continuously iterating that Ross was doing everything he could to avoid charges. I believe this is part of the Continuing a Criminal Enterprise Charge
Guide gives buyer advice on how to avoid detection when receiving packages through the mail.
- Jurors are dismissed for break
Defense is attempting to have evidence thrown out b/c screenshors do not show any actual sale or transfer of hacking materials or fraudulent documents. Judge does not agree and allows it to proceed.
Break for lunch
Agent testifies that DPR did not appear on forums until Jan 2012, before administrator was called Silk Road
Agent explains PGP encryption
Discussing forum posts by DPR re: maintenance or Silk Road servers
Agent – DPR set rules about what could and could not be sold on Silk Road
State shows screenshot of Jan 2012 post – Re: to State of the Road Address – DPR responds to criticisms of commission changes which now are tiered instead of flat rate
DPR – “I am the captain of the ship. If you don’t like the rules of the game or trust the captan you can get off.”
State shows more forum posts, this one from Oct. 6th 2013 shows DPR active with administrative.
State shares forum post showing DPR aware of drug sales. On a post where he says he loves the users he writes, “who knew that a softy could lead an international narcotics organization”
DHS Agent took over administrative Cirrus account after the account user was arrested and turned it over to Agent around July 26th/27th, 2013
Der-Yeghiayan tells jury aliases of other Silk Road staffers – Same Same But Different (SSBD), Libertas, and Inigo.
July 2013 – DPR sends msg to staff about Cirrus coming back on board.
DHS Agent acting as Cirrus would moderate forums and provide customer support, working 10 – 12 hours a day. Was paid $1,000 a week directly by DPR and in bitcoin sent to Silk Road account of Staffer.
State showed screenshot of transactions paid to Cirrus.
Staff began chatting through TOR chat that was separate from Silk Road. They referred to it as Staff Chat.
DPR teaches Cirrus how to install program called Pigeon. Cirrus uses ?Adium? because he uses a Mac.
State shows that Agent’s Cirrus account shows universal time in chat and DPR’s time shows up as PST time. they are showing this as at the time, Ulbricht was living in San Francisco.
Agent logged all chats with DPR. Showed pics of many of them.
New fourm was built on Silk Road site. DPR tells Cirrus to be more strict about moderating new forum. People who have spent more than $100 through SR would be allowed on forums along with all vendors.
Prosecutor asks DHS agent when he became aware of Ross Ulbricht. He replies through IRS special Agent Cory Alfred with a drug task force.
DHS and IRS and FBI begin working together.
ROSSS ULBRICHT ARREST AS TOLD BY DHSI AGENT DER-YEGHIAYAN
Warrant for Ross’ arrest is filed in Late September.
Der-Yeghiayan is invited to help with arrest by FBI Computer Science Expert Thomas Kiernan
DHS took part in arrest plan – “plan to get him in public place w/ internet and while in chat with Agent” “purpose was to try and get his computer in an open state so we could then see him chatting as DPR.”
Arrest took place Glen Park Library in San Francisco on Oct. 1st 2013. 3 PM PST.
Agent arrived in San Francisco September 30th, went to meet arrest team noon PST. Ross had plain clothes FBI following him days before arrest. Ross was observed at Internet Cafe day before.
Arrest team is led by FBI Agent Thomas Kiernan. 5 or 6 agents on team. Der-Yeghiayan says he is not aware who all of the team is.
Der-Yeghiayan “arrest is contingent upon Ross being on computer at internet cafe.
Der-Yeghiayan tells of how he monitored when DPR was logged in to private chat. FBI undercover following Ross notified Der-Yeghiayan to tell him Ross was leaving his house. Der-Yeghiayan leaves internet cafe and goes across the street to sit on bench with Kiernan. Der-Yeghiayan says he saw Ross walking on street with a shoulder bag. He then went in to Cafe Belo, the internet cafe but turned around and walked out because it was packed and instead went in to the library. At this point DPR was still offline.
Agent Kiernan instructs team to“make sure they pull laptop first and give time for undercover to chat with DPR.
DPR logs in to chat. Der-Yeghiayan asks if DPR is there. DPR replies yes. Der-Yeghiayan asjs DPR to check on something in the support panel for flagged comments. They chatted for 4 minutes.
Der-Yeghiayan tells jury he is “trying to get him online as DPR in Silk Road and on chat”
Der-Yeghiayan tells DPR to check out a recent post. DPR replies “which post”
Der-Yeghiayan says it was a post that was spamming for Atlantis.
When DPR says “which post”, Der-Yeghiayan knows he is logged in and gives Agent Kiernan word to make arrest. Kiernan emails team to arrest Ulbricht.
They arrest Ulbricht, take him out of library and over to stairs.
Proceedings for the day end
jury leaves
Judge responds to Defense’s previous Vayner objections.
Vayner was a case where the court ruled that screenshots were not allowed as evidence as they can be fabricated.
Judge says they were basically authenticated by Agent as he testified he saw them being taken or took them himself.
- Break for tomorrow