Busted: Silk Road 2.0

Friday, November 7, 2014 @ 11:11 AM gHale

One man ended up arrested in San Francisco Wednesday and charged with running an online drug marketplace and black market known as Silk Road 2.0.

Blake Benthall, 26, aka. “Defcon,” is under arrest on charges of drug trafficking, conspiracy to commit computer hacking, and money laundering, police said. If found guilty, he could face up to life in prison.

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In the classic case of picking up where another left off, the original Silk Road community ended up shut down after federal agents one year ago arrested Ross William Ulbricht, aka “Dread Pirate Roberts,” who they said operated the forum. Just about one year later, police arrested Benthall, who agents are saying launched Silk Road 2.0 about a month after agents shut down the original Silk Road. At the time of the arrest, police said Silk Road 2.0 was generating about $6 million a month in revenue.

U.S. and European authorities seized control of the servers that hosted the Silk Road 2.0 marketplace.

Benthall’s identity ended up discovered when the FBI, who investigated the case along with Homeland Security, found the server hosting the website at the time registered with his personal email address (blake@benthall.net).

Federal prosecutors said since December 2013, Benthall secretly owned and operated Silk Road 2.0, which the government describes as “one of the most extensive, sophisticated, and widely used criminal marketplaces on the Internet today.” Like its predecessor, Silk Road 2.0 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,” said Preet Bharara, the United States Attorney for the Southern District of New York, in a statement. “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.”

The complaint against Benthall claims by 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.” Apart from the drugs, Silk Road 2.0 also openly advertised fraudulent identification documents and computer-hacking tools and services. The government said in October 2014, the Silk Road 2.0 was generating at least approximately $8 million in monthly sales and at least $400,000 in monthly commissions.

Federal agents infiltrated Silk Road 2.0 from the very start, after an undercover agent working for Homeland Security investigators managed to infiltrate the support staff involved in the administration of the Silk Road 2.0 website, the compliant said.

“On or about October 7, 2013, the HSI-UC [the Homeland Security Investigations undercover agent] was invited to join a newly created discussion forum on the Tor network, concerning the potential creation of a replacement for the Silk Road 1.0 website,” the complaint said. “The next day, on or about October 8, 2013, the persons operating the forum gave the HSI‐UC moderator privileges, enabling the HSI‐UC to access areas of the forum available only to forum staff. The forum would later become the discussion forum associated with the Silk Road 2.0 website.”

The complaint goes into detail about how agents were able to locate and copy information from the Silk Road 2.0 servers.

“In May 2014, the FBI identified a server located in a foreign country that was believed to be hosting the Silk Road 2.0 website at the time. On or about May 30, 2014, law enforcement personnel from that country imaged the Silk Road 2.0 Server and conducted a forensic analysis of it. Based on posts made to the SR2 Forum, complaining of service outages at the time the imaging was conducted, I know that once the Silk Road 2.0 server was taken offline for imaging, the Silk Road 2.0 website went offline as well, thus confirming that the server was used to host the Silk Road 2.0 website.”

The charges against Benthall could send him to federal prison for life. He is facing 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; 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, and one count of money laundering conspiracy, which carries a maximum sentence of 20 years.

Click here to review the full interesting complaint against Benthall.

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