Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) and the FBI arrested the administrator of a black market website designed to buy and sell illegal drugs and other unlawful goods over the Internet. The arrest is the result of an international investigation by HSI, FBI and the European Police (EUROPOL).
Blake Benthall, 26, aka “Defcon” was arrested Thursday in San Francisco, California 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. He will have an initial hearing Thursday in federal court in San Francisco.
According to the complaint unsealed in Manhattan federal court:
Since about December 2013, Benthall 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.
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 aka “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.
The offerings on Silk Road 2.0 consisted overwhelmingly of illegal drugs, which were openly advertised as such on the site. As of Oct. 17, 2014, Silk Road 2.0 had over 13,000 listings for controlled substances, including, among others, approximately 1,783 listings for “Psychedelics,” approximately 1,697 listings for “Ecstasy,” approximately 1,707 listings for “Cannabis,” and approximately 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 HSI and the FBI, an HSI special agent acting in an undercover capacity (the “HSI-UC”) successfully infiltrated the support staff involved in running Silk Road 2.0 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, 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.