Ross Ulbricht, Silk road founder, sentenced to life in prison without parole

[marylander1940]

The convicted mastermind behind the world's largest online narcotics emporium has been sentenced by a federal judge to two terms of life in prison and three lesser sentences, USA Today reports.

 

The judge also ordered Ross Ulbricht, 31, to forfeit $184 million dollars. The website made over $187 million before it was shut down in 2013.

 

The government estimated that roughly $1.2 billion in illegal drug transactions took place on Silk Road.

 

The judge said it was a "demand expanding operation" and that what Ulbricht did was thoughtful, as opposed to just being an economic experiment. She added that he often referred to it as his life's work and a worldwide criminal enterprise.

 

"Silk Road was about creating demand and fulfilling demand," the judge said. "You don't fit the criminal profile" — noting that he was well educated — "but you are a criminal."

 

"I don't know that you feel a lot of remorse," the judge added. "I don't think you know that you hurt a lot of people."

 

Ulbricht’s defense team said it would seek an appeal, Wired reports, noting that two DEA agents on the case allegedly stole bitcoin used to make payments on the site.

 

Ulbricht's lawyer called life sentence "unreasonable, unjust, unfair."

 

http://finance.yahoo.com/news/founder-silk-road-drug-marketplace-195900814.html

[+ quoththeraven]

My heart bleeds. /end sarcasm. At least in this instance, the well-educated white collar criminal who traffics in millions didn't get a lighter sentence than the street criminals with few options for making money legitimately.

[Guest]

The convicted mastermind behind the world's largest online narcotics emporium has been sentenced by a federal judge to two terms of life in prison and three lesser sentences, USA Today reports.

 

The judge also ordered Ross Ulbricht, 31, to forfeit $184 million dollars. The website made over $187 million before it was shut down in 2013.

 

 

I guess I don't understand legal lingo. What if he refuses to hand over the $184 million (the word "dollars" is redundant since there is a dollar sign before the 184)? Will that give him three life terms instead of two? Of course, I'm not sure what he would do with the money if he has to spend the rest of his life in jail. Does having two life sentences rule out the possibility of parole?

[+ quoththeraven]

I guess I don't understand legal lingo. What if he refuses to hand over the $184 million (the word "dollars" is redundant since there is a dollar sign before the 184)? Will that give him three life terms instead of two? Of course, I'm not sure what he would do with the money if he has to spend the rest of his life in jail. Does having two life sentences rule out the possibility of parole?

 

The key word is "forfeiture," which enables authorities to immediately seize his assets.

 

What I find interesting is he apparently is getting to keep $3 million of his ill-gotten booty. Since there is no mention of life without parole, I assume he will be parole-eligible at some point. That doesn't mean he'll get it.

[maninsoma]

It was reported elsewhere that his sentences were life without parole. Unless he wins an appeal, he will spend the rest of his life in jail.

 

As to his getting to keep $3 million, I assume that money is already gone or it would have been part of the forfeiture as well. Or maybe the judge did want to leave him some money to pay lawyers' fees?

[mike carey]

I find the whole story interesting on a number of levels. The focus of most of the discussion is his involvement in the drugs trade, and there has been an emphasis on the harm drugs do. His involvement is different to that other great example in the trade of prohibited goods, the Al Capones and their ilk in the 1920s. Capone was actively trading in alcohol (and using gangster tactics to advance that trade) whereas Ulbricht was providing an amoral arms-length trading house. He had no stake in the commodities that were traded.

 

I'm not sure if he was really prosecuted because of the drugs aspect or because of the challenge he posed to the global financial system and its bankers. Wall Street's not all that concerned about drugs (apart from its propensity to use them) but it is concerned with threats to its profits. I'm not convinced that the prohibition of drugs is a good idea, but as long as it is, there need to be sanctions for those who do trade in them. What those sanctions should be is a separate question. As a contentious comparison, how much more culpable is Ulbricht (who set up a trading system that people could use for drug transactions) than the CEO of Visa if it were proven that Visa Cards had been used for drug transactions?

 

I don't know why the court didn't order forfeiture of all his profits from Silk Road. It could be that the court recognised that although drugs were a significant part of what it traded they were not all that it did. It may have recognised that some of the trade, though irregular was not illegal, or at least was not in illegal goods. Call me cynical, but I suspect that his true crime was disrupting the financial order of the world rather than facilitating drug transactions.

[+ quoththeraven]

I find the whole story interesting on a number of levels. The focus of most of the discussion is his involvement in the drugs trade, and there has been an emphasis on the harm drugs do. His involvement is different to that other great example in the trade of prohibited goods, the Al Capones and their ilk in the 1920s. Capone was actively trading in alcohol (and using gangster tactics to advance that trade) whereas Ulbricht was providing an amoral arms-length trading house. He had no stake in the commodities that were traded.

 

I'm not sure if he was really prosecuted because of the drugs aspect or because of the challenge he posed to the global financial system and its bankers. Wall Street's not all that concerned about drugs (apart from its propensity to use them) but it is concerned with threats to its profits. I'm not convinced that the prohibition of drugs is a good idea, but as long as it is, there need to be sanctions for those who do trade in them. What those sanctions should be is a separate question. As a contentious comparison, how much more culpable is Ulbricht (who set up a trading system that people could use for drug transactions) than the CEO of Visa if it were proven that Visa Cards had been used for drug transactions?

 

I don't know why the court didn't order forfeiture of all his profits from Silk Road. It could be that the court recognised that although drugs were a significant part of what it traded they were not all that it did. It may have recognised that some of the trade, though irregular was not illegal, or at least was not in illegal goods. Call me cynical, but I suspect that his true crime was disrupting the financial order of the world rather than facilitating drug transactions.

 

I think the biggest problem here was money-laundering for non-legit activities in a way that was hard to track. I'm sure arms smuggling, sale of WMD, human trafficking, and gun-running were going on, too. Those are legitimate areas of concern for law enforcement.

 

If Silk Road was targeted because it disrupted the financial world order, then Bitcoin - a much more obvious disruptor -- would have been shut down by now. But maybe I misunderstand? I don't see a direct connection between Silk Road and the world financial order other than the money being funneled into black market transactions. I doubt Silk Road significantly increased their dollar value; it simply made them less risky to carry out.

[+ quoththeraven]

It was reported elsewhere that his sentences were life without parole. Unless he wins an appeal, he will spend the rest of his life in jail.

 

As to his getting to keep $3 million, I assume that money is already gone or it would have been part of the forfeiture as well. Or maybe the judge did want to leave him some money to pay lawyers' fees?

 

Thanks for the correction. I thought that too, but wasn't secure enough that I was right to make the assertion.

[mike carey]

I think the biggest problem here was money-laundering for non-legit activities in a way that was hard to track. I'm sure arms smuggling, sale of WMD, human trafficking, and gun-running were going on, too. Those are legitimate areas of concern for law enforcement.

 

If Silk Road was targeted because it disrupted the financial world order, then Bitcoin - a much more obvious disruptor -- would have been shut down by now. But maybe I misunderstand? I don't see a direct connection between Silk Road and the world financial order other than the money being funneled into black market transactions. I doubt Silk Road significantly increased their dollar value; it simply made them less risky to carry out.

Fair points all, QTR. 'World financial order' was perhaps overstating it somewhat. I agree that both Silk Road and Bitcoin are or were disruptors, but Silk Road was more easily linked to illicit transaction, so more easily targeted (if indeed disruptors were what was being targeted). However clumsy I may have been, my point was that Silk Road = Drugs = Bad was simplistic and there may be deeper motives involved in prosecuting them. Drugs make it easier to sell it to the public.

[+ quoththeraven]

Fair points all, QTR. 'World financial order' was perhaps overstating it somewhat. I agree that both Silk Road and Bitcoin are or were disruptors, but Silk Road was more easily linked to illicit transaction, so more easily targeted (if indeed disruptors were what was being targeted). However clumsy I may have been, my point was that Silk Road = Drugs = Bad was simplistic and there may be deeper motives involved in prosecuting them. Drugs make it easier to sell it to the public.

 

I actually think most illegal drugs are in fact bad for you. Marijuana, which in many ways is less bad than alcohol (or is at least more consistent in its effects), is the only counterexample I can think of. Plenty of legit drugs are prone to abuse, too.

 

But I also think the War on Drugs is a misguided waste of money. It is human nature to seek pleasure. Addiction by somebody to something is inevitable. It's better to take as much of the criminal element and economic exploitation and waste out of the picture as possible.

[mike carey]

Off topic, but related to whether the war on drugs is in any way sensible. And yes, I am aware that cannabis is legal for recreational and medical use in some states in the US, but it's not here. Personal cases can make a difference though! A conservative rural women's group has come out in favour here over the last couple of days.

http://www.theherald.com.au/story/2907844/tribute-to-medical-cannabis-advocate-dan-haslam/

[mike carey]

Did closing Silk Road have any effect?

http://www.economist.com/blogs/graphicdetail/2015/05/daily-chart-13?fsrc=scn%2Ftw%2Fte%2Fbl%2Fed%2Fsilkroadsuccessors

[+ purplekow]

By closing down a well known and seemingly reputable clearing house, room has been made for other sites. However, those sites do not have the reputation and cautious trust of the Silk Road users and so, though they may grow, it will slow drug trade for a while and likely make it harder to deal drugs in this manner. Scams are occurring and drug dealers are losing money to the on line scammers. so that may also slow drug trade done in this manner.

[AdamSmith]

Interesting article on why 'darknet drugs' are here to stay:

 

http://www.theguardian.com/technology/2015/may/31/silk-road-sentencing-darknet-drugs

[wisconsinguy]

I have been following the Russ Albricht thing. He was allegedly involved in darker things than dark drugs. Like enlisting the services of hit men to take care of individuals that posed a threat to the business. The large site that has taken over top billing is Agora, there are many smaller cites listed. Yes, there are a lot of sources world wide to pick up the slack. The dark drug sites are here to say. My son is up to date on this stuff, and we were talking yesterday. He was well aware of Agora. Over that last few years the site has gone down at interval. They claim it's to catch up on new registrations. My son laughed. No, no he chucked. There are ways that sites that are under investigation, can be inundated with so much in it results in a shutdown.

He is positive that they under investigation.

 

What I am truly amazed at is the complexity of the methods these sites and Bitcoin use to protect the anonymity of the customers. It is a combo of really high tech computer knowledge, blended in with the the intelligence of the developers.

 

P.S. Russ Albricht was being tracked for sometime. His wire interactions were traced to a public library. I'm assuming that was his mistake. Undercover agents were at the library when he arrived. Sat down, and started his business. Was arrested typing on his computer.

[marylander1940]

Hopefully some fellows in Wall Street are next.... LOL, I'm just kidding.

[Frequentflier]

Hopefully some fellows in Wall Street are next.... LOL, I'm just kidding.

 

It does seem unfair that many on Wall Street tanked the global economy and lots of non millionaires/billionaires lost jobs and homes as well as picked up the check (as taxpayers) for bailing out reckless behavior; yet none went to prison. And for those of that have mutual fund/ETF investments as bank shareholders we're paying the fines while the criminal employees are back to making millions per year.