Blake Benthall is alleged to have operated a hidden drug marketplace on the Web.
The FBI and Europol have conducted a joint operation to take down the internet's thriving "deep web" drug marketplaces.
The official FBI New York Twitter account confirmed on Thursday the seizure of Silk Road 2.0, saying that the site's alleged operator, Blake Benthall, was arrested in San Francisco on Wednesday.
He now potentially faces life in prison, the FBI says.
Benthall is a former employee of SpaceX, Elon Musk's private rocket company. SpaceX confirmed to Business Insider that an employee with that named worked at the company from Dec. 9, 2013 to Feb. 21, 2014.
There are also reports that police have arrested a major online drug dealer in Ireland as part of what's being called Operation Onymous.
Silk Road 2.0 was taken offline exactly one year after it went live on Nov. 6, 2013. Visitors to the deep web's drug marketplace have been met with an official police notice informing them of the site's seizure.Here's what people see when they try and access the Silk Road:
The FBI alleges in its complaint that Benthall's unencrypted computer contained "address lists for customers all over the world that will be of significant interest to many global law enforcement agencies."
Benthall is charged with one count of conspiring to commit narcotics trafficking, one count of conspiring to commit computer hacking, one count of conspiring to traffic in fraudulent identification documents, and one count of money-laundering conspiracy. He potentially faces life in prison.Here's the full criminal complaint against Benthall:
During September and October, the DEA made purchases from the Silk Road, including 0.5 grams of heroin, two grams of cocaine, 120 micogrammes of LSD, and ten Oxycodone pills. Every one of those purchases was sent to a secret address in Manhattan and tested for illegal substances. The FBI claims that each purchase tested positive for drugs.
In its criminal complaint, the FBI claims that by October 2014, the Silk Road 2.0 was processing $8 million in monthly sales. Additionally, the FBI claims that Benthall, using the online name "Defcon," contacted his support staff in September 2014 to say that an unknown hacker had stolen "all of the Bitcoins" from the marketplace. The FBI investigated the hack and claimed that $1,412,000 in Bitcoin had been stolen.
In conversations with an undercover FBI officer, Benthall allegedly claimed that the Silk Road had over 150,000 monthly active users. "Defcon" expressed pride in that figure, going on to say, "That's why we have to save this thing." The FBI goes on to claim that the agency's undercover Silk Road account was paid for helping run the drug marketplace, receiving payments totalling $32,189 worth of Bitcoin.
It seems that the Silk Road had an aggressive strategy to beat competing drug marketplaces. In the criminal complaint, the FBI claims that Defcon, the screen name of the person who ran the site, instructed his employees to try and poach "bulk vendors and high-volume vendors" from competitors.
Elsewhere in the document, the FBI specifically references a tweet retweeted by Benthall on Nov. 7, the day after the Silk Road 2.0. was launched in 2013:This is the retweet referenced by the FBI in the criminal complaint:
A person identical in appearance to the person in the Twitter profile referenced in the FBI complaint also owns a Facebook account, where he lists his profession as a software engineer at SpaceX, Elon Musk's space-rocket development company based in California. Additionally, the FBI mentions Benthall's personal website in the complaint, which is referenced on his social-media profiles. The FBI cites Benthall's Github account in the indictment. Github is a code-sharing website for software developers.
In the criminal complaint against Benthall, the FBI claims that investigators were part of the original conversation that took place during the launch phase of the site, and that they were granted moderator privileges on the drug marketplace's forum.
Government investigators were able to find the Silk Road's servers in a foreign country, and briefly took them offline as they made a copy (known as an "image") of them. Sure enough, the site went down for a brief amount, and notification emails about the downtime were automatically sent to Benthall's personal email account. Additionally, Google handed over IP addresses to the FBI that tied Benthall's email account to the Silk Road server.
The original Silk Road was seized by police on Oct. 2, 2013. Police arrested Ross William Ulbricht, the man accused of running the site, in a San Francisco library.
European police have hinted that further shutdowns and arrests would occur. Operation Onymous, they say, will conclude within hours and will "disrupt global activity" on the deep web.
Almost all the deep web's major drug marketplaces are offline, raising the possibility that the FBI has caused severe disruption to the online drug trade. Agora, Alpaca, BlueSky, C9, Hyrda, Pandora, and the Silk Road are all currently offline.
Earlier today, one of the Silk Road's biggest drug dealers was arrested in Ireland, police claim. Ecstacy, LSD, and other drugs worth up to €180,000 were seized in a police raid, the Irish Examiner reports. Two men in their 30s were arrested at the scene. The arrests are part of the same police operation that led to the seizure of the Silk Road.Here's the full text of the FBI press release:
OPERATOR OF "SILK ROAD 2.0" WEBSITE CHARGED IN MANHATTAN FEDERAL COURT
Silk Road 2.0, Launched in November 2013 After Its Predecessor Was Shut Down by Law Enforcement, Has Enabled Over 100,000 People to Buy and Sell Illegal Drugs Anonymously Over the Internet
Preet Bharara, the United States Attorney for the Southern District of New York, George Venizelos, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Peter Edge, Executive Associate Director of Homeland Security Investigations (“HSI”), announced today the arrest of BLAKE BENTHALL, a/k/a “Defcon,” in connection with his operation and ownership of the Silk Road 2.0 website, a hidden website designed to enable its users to buy and sell illegal drugs and other unlawful goods and services anonymously and beyond the reach of law enforcement. BENTHALL was arrested yesterday in San Francisco, California. He will be presented later today in federal court in San Francisco before Magistrate Judge Jaqueline Scott Corley.
Manhattan U.S. Attorney Preet Bharara said: “As alleged, Blake Benthall attempted to resurrect Silk Road, a secret website that law enforcement seized last year, by running Silk Road 2.0, a nearly identical criminal enterprise. Let’s be clear - this Silk Road, in whatever form, is the road to prison. Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don’t get tired.”
FBI Assistant Director-in-Charge George Venizelos said: “It’s been more than a year since the FBI made an arrest of the administrator of the black-market bazaar, Silk Road, and here we stand again, announcing the arrest of the creator and operator of Silk Road 2.0. Following a very close business model to the first, as alleged, Blake Benthall ran a website on the Tor network facilitating supposedly anonymous deals of drugs and illegal services generating millions of dollars in monthly sales. Benthall should have known that those who hide behind the keyboard will ultimately be found. The FBI worked with law enforcement partners here and abroad on this case and will continue to investigate and bring to prosecution those who seek to run similar black markets online.”
HSI Executive Associate Director Peter Edge said: “Blake Benthall’s arrest ends his status as the alleged administrator of a website that allows illicit black-market activities to evolve and expand, and provides a safe haven for illegal vices. HSI will continue to work in partnership with its federal and international law enforcement partners around the world to hold criminals who use anonymous internet software for illegal activities who seek to hide behind the anonymity of the Internet to carry out illegal activities accountable for their actions.”
According to the Complaint unsealed today in Manhattan federal court:
Since about December 2013, BENTHALL, a/k/a “Defcon,” has secretly owned and operated an underground website known as “Silk Road 2.0” - one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet today. The website has operated on the “Tor” network, a special network of computers on the Internet, distributed around the world, designed to conceal the true IP addresses of the computers on the network and thereby the identities of the network’s users. Since its launch in November 2013, Silk Road 2.0 has been used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other illicit goods and services to buyers throughout the world, as well as to launder millions of dollars generated by these unlawful transactions. As of September 2014, Silk Road 2.0 was generating sales of at least approximately $8 million per month and had approximately 150,000 active users.
Silk Road 2.0 was created in the wake of the Government’s October 2013 seizure of the website known as “Silk Road” and the arrest of its alleged owner and operator, Ross William Ulbricht, a/k/a “Dread Pirate Roberts.” The original Silk Road website had been designed to enable people anywhere in the world to buy and sell illegal drugs and other illegal goods and services anonymously and beyond the reach of law enforcement. Before its seizure in October 2013, Silk Road was used extensively to facilitate such transactions.
In November 2013, approximately five weeks after the Government shut down Silk Road and arrested Ulbricht, Silk Road 2.0 was launched. Designed to fill the void left by the Government’s seizure of Silk Road, Silk Road 2.0 was virtually identical to the original Silk Road website in the way it appeared and functioned. In particular, like its predecessor, Silk Road 2.0 operated exclusively on the “Tor” network and required all transactions to be paid for in Bitcoins in order to preserve its users’ anonymity and evade detection by law enforcement. Likewise, the offerings on Silk Road 2.0 consisted overwhelmingly of illegal drugs, which were openly advertised as such on the site. As of October 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, 1,783 listings for “Psychedelics,” 1,697 listings for “Ecstasy,” 1,707 listings for “Cannabis,” and 379 listings for “Opioids.” Besides illegal narcotics, other illicit goods and services were openly advertised for sale on Silk Road 2.0 as well, including fraudulent identification documents and computer-hacking tools and services.
When Silk Road 2.0 was launched, it was controlled for a short time by a co-conspirator using the same online moniker as that allegedly used by Ross Ulbricht in operating the original Silk Road website - “Dread Pirate Roberts.” In late December 2013, however, BENTHALL, using the moniker “Defcon,” took over administration of the site and has owned and operated it continuously since that time. In that role, BENTHALL has controlled and overseen all aspects of Silk Road 2.0, including, among other things: the computer infrastructure and programming code underlying the website; the terms of service and commission rates imposed on vendors and customers of the website; the small staff of online administrators and forum moderators who have assisted with the day-to-day operation of the website; and the massive profits generated from the operation of the illegal business.
During the Government’s investigation, which was conducted jointly by the FBI and HSI, an HSI agent acting in an undercover capacity (the “HSI-UC”) successfully infiltrated the support staff involved in the administration of the Silk Road 2.0 website, and was given access to private, restricted areas of the site reserved for BENTHALL and his administrative staff. By doing so, the HSI-UC was able to interact directly with BENTHALL throughout his operation of the website.
BENTHALL, 26, of San Francisco, California, is charged with one count of conspiring to commit narcotics trafficking, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; one count of conspiring to commit computer hacking, which carries a maximum sentence of five years in prison; one count of conspiring to traffic in fraudulent identification documents, which carries a maximum sentence of 15 years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the outstanding joint efforts of the FBI and its New York Cyber Branch and HSI and its Cyber Crimes Center and Chicago-O’Hare Field Office. He also thanked the Drug Enforcement Administration’s New York Organized Crime Drug Enforcement Strike Force, which comprises agents and officers of the DEA, the Internal Revenue Service, the New York City Police Department, HSI, the New York State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the U.S. Secret Service, the U.S. Marshals Service, Office of Foreign Assets Control, and New York Department of Taxation. Mr. Bharara also thanked the Department of Justice’s Computer Crime and Intellectual Property Section for its assistance and support, the Department of Justice’s Criminal Division Office of International Affairs, and the law enforcement authorities of France, Germany, Lithuania, the Netherlands, and the United Kingdom. Mr. Bharara also noted that the investigation remains ongoing.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit and Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Serrin Turner, Timothy Howard, and Daniel Noble are in charge of the prosecution. Assistant United States Attorney Margaret Graham is in charge of the forfeiture aspect of the case.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
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