Silk Road: not so silky

Never ordered from this place. (link shows scary-assed banner* Feds posted at seized website)http://www.nytimes.com/2013/10/03/nyregion/operator-of-online-market-for-illegal-drugs-is-charged-fbi-says.html?_r=0Authorities have posted this notice* on the Silk Road Web site, which the F.B.I. seized.By JOSEPH GOLDSTEINPublished: October 2, 2013Federal authorities have charged a man with running Silk Road, a popular online black market for drugs.DOCUMENT: Criminal Complaint and Protective Order Related to the Silk RoadConnect With NYTMetroFollow us on Twitter and like us on Facebook for news and conversation.The authorities identified the man as Ross Ulbricht, who was arrested by F.B.I. agents Tuesday afternoon at a library in San Francisco. Court papers filed in the case in Manhattan accuse him of engaging in a “massive money-laundering” operation and of trying to arrange a murder-for-hire. Mr. Ulbricht is to appear in federal court on Wednesday in San Francisco.Mr. Ulbricht solicited a Silk Road user “to execute a murder-for-hire of another Silk Road user, who was threatening to release the identities of thousands of users of the site,” according to a criminal complaint unsealed Wednesday morning. Authorities also seized the Silk Road Web site.In interviews with news reporters in the past, Mr. Ulbricht has gone by the moniker Dread Pirate Roberts, the authorities said, and until now his identity has remained a mystery.The Silk Road marketplace is available through Tor, a popular tool for maintaining anonymity online. Bitcoin, a virtual currency, is used for transactions. The identities of sellers are not known to the buyers. About $1.2 million in sales were conducted a month in early 2012, according to a study by an assistant professor at Carnegie Mellon University, Nicolas Christin.As part of the investigation into Silk Road, authorities said, they seized 26,000 bitcoins worth $3.6 million.The arrest is part of the latest push by federal authorities to police the anonymous marketplaces that have flourished as a result of virtual currencies and software meant to help users browse the Web anonymously. In recent months, federal authorities charged seven people believed to be linked to Liberty Reserve, another virtual currency, which prosecutors described as a $6 billion money-laundering operation that facilitated a black market for everything from stolen identities to child pornography.One recent study found that a broad range of drugs, including ecstasy, LSD and heroin, were available on Silk Road, but that marijuana was the most popular item offered for sale. Books and erotica are also sold.

i don't understand the money laundering charges personally..

i'm no lawyer, but can someone explain to me how selling illegal drugs on the internet could be considered money laundering?? what are you supposed to do, claim the drug sales on your 1040 and pay taxes on it? but even that would only be tax evasion, no??
can anyone brighter than i explain that one for me? please and thank you..

http://www.nytimes.com/2013/10/03/nyregion/operator-of-online-market-for-illegal-drugs-is-charged-fbi-says.html?_r=0....Anything having anything to do w drug sales is considered money laundering in the eyes of the Feds. When they often can't prosecute on the sale of contraband, they get em on the cash end. No, they don't expect you to claim the income. Wait... Yes, they want to to pay taxes right up until they decide they'd rather bring the flighing-hammer dwn.

abe supercro said:

http://www.nytimes.com/2013/10/03/nyregion/operator-of-online-market-for-illegal-drugs-is-charged-fbi-says.html?_r=0....Anything having anything to do w drug sales is considered money laundering in the eyes of the Feds. When they often can't prosecute on the sale of contraband, they get em on the cash end. No, they don't expect you to claim the income. Wait... Yes, they want to to pay taxes right up until they decide they'd rather bring the flighing-hammer dwn.

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i just asked the same on another thread and got pretty much the same answer, thanks abe..

it felt somewhat inappropriate for me to respond because you requested "someone smarter". thought you wouldn't mind my guess anyway. peace

abe supercro said:

it felt somewhat inappropriate for me to respond because you requested "someone smarter". thought you wouldn't mind my guess anyway. peace

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lol, trust me abe, i'm not always the brightest bulb in the room myself... i do know how to type and spell, which makes me look a bit more intelligent than some people on this site..

Isn't there a place in the tax forms for "other income"?
Im not really sure because I don't do my own taxes (accountant) but
I do believe there is a place where you can claim the money as "other" so that would protect you from tax evasion
but the laundering and a slew of other charges would still apply if a person was ever caught.

abe supercro said:

http://www.huffingtonpost.com/2013/10/02/silk-road-closed_n_4032116.html

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i'm having a bit of a hard time someone so security conscience as him got caught because he ordered some fake id's out of canada.. something there doesn't add up imo..
i read in another article from forbes that they caught him in a public library, so idk how they knew he was at a library from some fake id's...
just saying..

money laundering charge stems from the sites use of "coin washing" some sort of feature the site had to wash the coin through a few different methods to obfuscate the money trail. Or at least thats what i read somewhere

racerboy71 said:

i'm having a bit of a hard time someone so security conscience as him got caught because he ordered some fake id's out of canada.. something there doesn't add up imo..
i read in another article from forbes that they caught him in a public library, so idk how they knew he was at a library from some fake id's...
just saying..

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Im willing to bet the site was already compromised, the authorities would have an easy time finding an ip to pin point where
he was at the time of the login.
Or,
They already sniffed his traffic and found the locations he was logging in from, as soon as he was active they knew the physical
address and just picked him up.

Sniffing is the best outcome for end users, a compromised site is far more dangerous because no one will
know how long they were there and what they were doing while they were spying on the sites members and activity
from inside.

I like how he was only 29 and rented a modest apt w a few roomates in San Fran. this sucker may have forgotten to stash 100 million when he had it, because it sounds like he wasn't living large... at least part of that was smart. they may have just followed him to the library til they had the take-dwn order. Anyone get any excellent drugs from this silk road place??

Money laundering has been criminalized in the United States since the Money Laundering Control Act of 1986. That legislation, contained at section 1956 of Title 18 of the United States Code, prohibits individuals from engaging in a financial transaction with proceeds that were generated from certain specific crimes, known as "specified unlawful activities" (SUAs). Additionally, the law requires that an individual specifically intend in making the transaction to conceal the source, ownership or control of the funds. There is no minimum threshold of money, nor is there the requirement that the transaction succeed in actually disguising the money. Moreover, a "financial transaction" has been broadly defined, and need not involve a financial institution, or even a business. Merely passing money from one person to another, so long as it is done with the intent to disguise the source, ownership, location or control of the money, has been deemed a financial transaction under the law. However, the lone possession of money without either a financial transaction or an intent to conceal is not a crime in the United States. (Cassella, Stefan)

Just another modern federal narcissistic legal catch all currently aimed at abusing MJ caregivers and patients throughout the country IMO.

A little more on how they found him:

http://www.bbc.co.uk/news/technology-24371894

I can't believe he was in the US.... Getting fake ID's sent to his house? Some geniuses, I tell you.

And just like all things in this drug war, there is already a company to take silk roads place.

ricky1lung said:

Isn't there a place in the tax forms for "other income"?
Im not really sure because I don't do my own taxes (accountant) but
I do believe there is a place where you can claim the money as "other" so that would protect you from tax evasion
but the laundering and a slew of other charges would still apply if a person was ever caught.

Click to expand...

You can even claim stolen money on taxes. Only one person has ever done it but, you can.

The money laundering charges had to do with the use of bitcoins. A lot of folks are saying the sole purpose of the FBI raid was to destroy the value of bitcoins:

http://www.reuters.com/article/2013/10/02/net-us-crime-silkroad-bitcoin-idUSBRE99113A20131002

You might be on to something, I did not realize the total value of all outstanding
bitcoins is currently around $1.5 billion. I saw in news about the bust that there was
1.1 billion in bitcoin traded on silkroad since 2011. That's a pretty big number in
comparison. If those numbers are true almost every bitcoin in circulation had been
on the road at some point. The market opens in Japan in a few hours, I would be
nervous if I had bitcoin.

SAN FRANCISCO (Reuters) - The price of the bitcoin digital currency dropped on Wednesday, after U.S. law enforcement authorities shut down Silk Road, an online marketplace used to buy and sell illegal drugs.
The bitcoin, valued by many for its anonymity, fell to $129 from over $140 a day before, according to a website for trading bitcoins, Mt.Gox. Earlier, the currency traded as low as $110.
Supporters say using bitcoins offers benefits including lower fraud risk and increased privacy, though critics argue the anonymity it offers makes the currency a magnet for drug transactions, money-laundering and other illegal activities.
The digital currency's drop came after the FBI arrested alleged Silk Road owner Ross William Ulbricht, 29, known as "Dread Pirate Roberts," on Tuesday in San Francisco.
Silk Road allowed tech-savvy sellers to post ads for drugs and other illegal products, which they sold for bitcoins and shipped to customers through the mail, according to the federal criminal charges filed against Ulbricht.
As well as Silk Road shoppers, drug traffickers who worried about the FBI tracking them down with data confiscated from Ulbricht may account for some of Wednesday's bitcoin selloff, said Garth Bruen, a security expert at Internet consumer group Digital Citizens Alliance.
"They're going to be pouring all over his records, getting subpoenas for every piece of data and account he has ever used and trying to figure out who all these different dealers are," said Bruen. "People are jumping ship."
While bitcoins, which are not backed by a government or central bank, have begun to gain a footing among some businesses and consumers, they have yet to become an accepted form of payment on the websites of major retailers such as Amazon.com.
The charges against Ulbricht said that Silk Road generated sales of more than 9.5 million bitcoins, roughly equivalent to $1.2 billion. There are currently about 11.8 million bitcoins in circulation.
With Ulbricht's arrest, authorities said they seized $3.6 million worth of bitcoins.
(Reporting by Noel Randewich; Editing by Leslie Adler)