Prosecutors tighten case against alleged Silk Road mastermind

Prosecutors introduced computer files in court that appear to show the laptop Ulbricht was using at the time of his arrest was also used to manage the Silk Road during 2011 and 2012. The files appeared to weaken Ulbricht's contention that he was not involved with the Silk Road during its heyday.

Ulbricht was arrested in October 2013, at a library in San Francisco, where he was performing administrative work on the Silk Road website using the Dread Pirate Roberts account used to manage its operations. Law enforcement officers took the site offline the next day.

Ulbricht created the Silk Road site in early 2011. According to prosecutors, it would go on to facilitate the exchange of $1.2 billion in illegal goods, mostly drugs. Buyers used bitcoins to pay for the goods, which were delivered through the mail carefully concealed.

Ulbricht's defense lawyer, Joshua Dratel, argues that he handed off the site to other operators shortly after he started it. He rejoined immediately prior to his arrest, lured back in by the new operators to serve as a fall guy.

As a result, prosecutors need to convince the jury that Ulbricht was Dread Pirate Roberts for much of the Silk Road's existence -- quite a challenge given that much of the site's maintenance was conducted through anonymous accounts.

On the stand Wednesday was FBI computer forensic scientist Thomas Kiernan, who was at scene of Ulbricht's arrest in 2013 and spent the following months examining the contents of his laptop, a Samsung 700Z running Ubuntu Linux.

Under questioning, Kiernan showed a number of files on the laptop that seemed to link Ulbricht with Dread Pirate Roberts.

The computer had one account on it, in the name of Frosty, which Ulbricht was signed into at the time of his arrest. Kiernan discovered that many of the files under the Frosty account were created at the same time, in May 2012, suggesting that's when Ulbricht may have started to use the computer. Among the files, in a folder called IDs, were images of Ulbricht's passport and Texas state driver's license.

Kiernan examined log files under the Frosty account for a program called TorChat. A log file from April 2012 shows the operator of the computer identifying himself as DPR, an abbreviation frequently used for Dread Pirate Roberts. Additional files showed the user of the Frosty account recruiting help for the site.

There were also journal entries on the laptop that seemed to summarize Ulbricht's previous year. A file marked "2010," last modified in early 2011, describes in detail how the Silk Road came into being. The author hoped the Silk Road would become a "phenomenon."

To jump-start sales, the author of the journal describes growing 10 pounds of mushrooms to sell on the site, something he later says he regretted.

A similar journal created in February 2012 summarizes the Silk Road's rapid growth in 2011. The author describes learning how to code, and creating advanced features such as a tumbler service to make Bitcoin transactions anonymous.

The document describes the site's growing popularity, its exposure on Gawker and subsequent denouncement by two U.S. senators. The Silk Road was generating about $25,000 profit each month at that time, according to the document.

In later questioning, Kiernan revealed numerous other documents on the laptop that suggested it was used to maintain Silk Road. Many of the PHP files that made up the Silk Road Web site were found on the device, as was the private key used to sign many of Dread Pirate Roberts' forum messages through 2012 and 2013.

Also on the device was a PDF document explaining how to obtain citizenship in Dominica, an island in the Caribbean. Kiernan explained that Dominica offers a secondary citizenship for US$75,000, allowing applicants to retain their primary citizenship in another country.

In the same folder was also a disclosure form required to apply for Dominica citizenship that had been partially filled out with Ulbricht's personal information. Both Dominica documents were placed on the computer in May 2012, forensics showed.

The computer also contained a file of information, within a folder called "aliaces" (sic), containing contact information for Richard Page, a fictitious entity used to register the Silkroadmarket.org Web site in 2011. The contact information in the file matched the information supplied when the site was registered.

Dratel will have an opportunity to cross-examine Kiernan. He'll most likely try to convince the jury that just because Ulbricht used the computer on which the documents and files were found, that doesn't mean he necessarily created them.

That was Dratel's approach earlier in the day when he questioned the prosecution's previous witness, Department of Homeland Security agent Jared DerYeghiayan, who led the investigation of Ulbricht and coordinated his arrest.

Dratel asked DerYeghiayan if he could provide direct evidence that Ulbricht operated the Dread Pirate Roberts account on any day other than that of his arrest. "No, I cannot," DerYeghiayan replied.

Ulbricht was charged with narcotics conspiracy, engaging in a continuing criminal enterprise, conspiracy to commit computer hacking and money laundering. The narcotics and criminal enterprise charges carry maximum penalties of life in prison. Ulbricht has pled not guilty to all charges.

The case is being overseen by District Judge Katherine Forrest of the Southern District of New York.

Joab Jackson covers enterprise software and general technology breaking news for The IDG News Service. Follow Joab on Twitter at @Joab_Jackson. Joab's e-mail address is Joab_Jackson@idg.com