A federal agent covertly infiltrated the online black market Silk Road, chatting with its operator just minutes before the man he believes ran the site was arrested, according to a 2015 testimony.
Jared Der-Yeghiayan, a special agent with the U.S. Department of Homeland Security, told jurors in Manhattan federal court that he took over a Silk Road moderator’s account in July 2013 and participated in the arrest of Ross Ulbricht, the man who is accused of being the site’s operator.
Who is Jared Der-Yeghiayan?
Jared Der-Yeghiayan is a seasoned law enforcement professional with a career spanning nearly two decades. He served as a Special Agent with DHS Homeland Security Investigations (HSI) in detail to the HSI Cyber Crime Center in Fairfax, Virginia.
Der-Yeghiayan’s law enforcement journey commenced in 2003 when he joined the Customs and Border Protection (CBP) as an Officer at Chicago O’Hare International Airport. His commitment to safeguarding borders and communities led him to serve as a member of the Counter-Terrorism Response Team.
In 2010, Der-Yeghiayan embarked on a new chapter, moving on to Criminal Investigator with HSI, assigned to the Chicago Resident Agent In-Charge Office for Chicago O’Hare International Airport. He leveraged his expertise in criminal investigations when he spearheaded the HSI investigation that dismantled the notorious online black market platform, Silk Road, in 2013.
Der-Yeghiayan’s dedication to combating online criminal activities extended beyond the Silk Road. In 2014, he led the subsequent investigation of Silk Road’s successor, Silk Road 2.0. This investigation, combined with Operation Onymous, a global HSI-led operation, resulted in the seizure of seven online black markets, including Silk Road 2.0.
In 2016, Der-Yeghiayan spearheaded another investigation, leading to the shutdown and seizure of the illicit torrent file-sharing website Kickass Torrents. This operation, a significant blow to the online file-sharing industry, had a profound impact on copyright holders, preventing over 1 billion dollars in losses.
The Testimony
Der-Yeghiayan said he began chatting with the suspected operator, whom he knew only as “Dread Pirate Roberts,” just hours before Ulbricht was arrested in San Francisco. During their conversation, Der-Yeghiayan said Dread Pirate Roberts joked about “damn regulators” and expressed frustration about the website’s increasing scrutiny from law enforcement.
“He was just kind of complaining about how the website was being investigated,” Der-Yeghiayan said.
Ulbricht, now 39 years old, is facing seven counts, including operating a continuing criminal enterprise and conspiracy to commit narcotics trafficking. Prosecutors say Silk Road generated $200 million in drug sales from 2011 to October 2013.
Ulbricht’s lawyer has said that his client created Silk Road but was not the Dread Pirate Roberts. He has argued that Ulbricht was the “fall guy” for the true operators of the website.
Der-Yeghiayan testified that he infiltrated Silk Road in July 2013 after a support staff member named “cirrus” gave him access to a moderator’s account. He said he reported to the Dread Pirate Roberts and earned $1,000 a week in bitcoin for his work.
After an IRS agent flagged Ulbricht as a possible suspect, Der-Yeghiayan said he joined an operation to confirm his identity and arrest him. He said he was in contact with Ulbricht on the day of his arrest and was able to watch as agents took him into custody.
“It was a very surreal experience,” Der-Yeghiayan said. “It was like something out of a movie.”
Ross Ulbrich Now and Then
Ross Ulbricht, the figure behind the infamous online black market Silk Road, led a life marked by both academic excellence and ideological convictions. His early years were shaped by a passion for science and technology, coupled with a strong libertarian philosophy that influenced his later endeavors.
Born in Austin, Texas, in 1984, Ulbricht excelled in academics from a young age. He was a Boy Scout, achieving the rank of Eagle Scout, and attended West Ridge Middle School and Westlake High School, both near Austin. His academic prowess earned him a full academic scholarship to the University of Texas at Dallas, where he majored in physics and graduated summa cum laude in 2006.
Ulbricht continued to pursue a master’s degree in materials science and engineering at Pennsylvania State University. Immersed in the world of crystallography, he delved into the intricacies of molecular structure and material properties.
Alongside his academic pursuits, Ulbricht developed a keen interest in libertarian economic theory. He embraced the ideas of Ludwig von Mises, a prominent Austrian economist, and became an advocate of agorism, a philosophy that promotes voluntary exchange and the rejection of state intervention.
After completing his master’s degree in 2009, Ulbricht returned to Austin, eager to apply his entrepreneurial spirit. He dabbled in day trading and attempted to launch a video game company, but both ventures met with setbacks. Undeterred, he partnered with a friend to establish an online used book store, Good Wagon Books.
In 2010, Ulbricht discovered the darknet, a hidden network accessible only through specialized software. Fascinated by its potential for anonymity and autonomy, he conceived the idea of an online marketplace for goods and services that existed beyond the reach of government regulations and law enforcement.
Embracing the alias “Dread Pirate Roberts,” Ulbricht launched Silk Road in January 2011. The site quickly gained popularity, providing a platform for users to buy and sell a wide range of goods and services, including illegal drugs, weapons, and stolen goods.
In 2013, the FBI took down Silk Road, identifying Ulbricht as the mastermind behind the operation. He was arrested and charged with multiple felonies, including narcotics trafficking, computer hacking, and money laundering.
In 2015, Ulbricht was found guilty of all charges and sentenced to two life sentences plus fifty years without the possibility of parole.
Conclusion
Since his conviction, Ulbrich has been held up by the Bitcoin community as something of a martyr. It is a fairly common opinion that the sentence inflicted on him was excessive, a sort of warning for anyone who tried to emulate his steps.
In 2023, US presidential candidate Robert F. Kennedy, during a rally at the Bitcoin 2023 conference, promised to consider a presidential pardon for Ulbrich, should it emerge that the sentence given to him was indeed excessive. Ulbrich has been in prison since 2015. There are frequent tweets in which he calls for a pardon for the crimes committed and a reevaluation of his sentence.
Only time will tell how this story will unfold.
