The Justice Department announced new charges Thursday against one of the most notorious scammers on the now-defunct criminal marketplace Silk Road, who they say allegedly used the platform to sell a variety of drugs.
In a statement, the DOJ said 47-year-old Canadian national James Ellingson – known by his Silk Road account names “redandwhite,” “MarijuanaIsMyMuse” and “Lucydrop” – sold more than four kilograms of methamphetamine, more than 100 grams of heroin, more than two kilograms of cocaine, more than six grams of LSD, approximately seven kilograms of the drug commonly known as “ecstasy” or “MDMA,” and more than 19 kilograms of marijuana, among other narcotics, in exchange for bitcoin.
Ellingson is best known for his role in scamming Silk Road’s founder Ross Ulbricht out of thousands of dollars in exchange for what was later determined to be faked assassinations. Prosecutors believe Ellingson used one account name to tell Ulbricht that people were threatening to release the personal information of Silk Road vendors in March 2013.
He then approached Ulbricht from another account with an offer to kill the man. Ellingson was paid $150,000 for the alleged killings and sent Ulbricht proof – all of which was fake.
Ulbricht paid Ellingson another $500,000 to kill four other people in Canada. Several law enforcement agencies have said no murders were ever committed.
“As alleged, Ellingson used the Dark Web to ship dangerous drugs around the world, including to New York City. He discussed with Silk Road’s founder a plot to kill five people and received hundreds of thousands of dollars in Bitcoin in exchange,” U.S. Attorney Damian Williams said.
“Others who would try to hide in the shadows of the Internet should know that federal law enforcement will continue to uncover crime, wherever and however committed.”
Ulbricht was sentenced to life in prison without the possibility of parole in 2015 for his role in running Silk Road.
Ellingson was previously arrested in Canada for his role in the Silk Road saga and has a long criminal history that includes three convictions for drug possession and trafficking. He has seven other convictions related to weapon use, harassment, assault, probation violations and more.
The Vancouver-native is now facing one count of narcotics trafficking conspiracy and one count of narcotics importation conspiracy, which each carry a mandatory minimum sentence of 10 years in prison and a maximum sentence of life in prison. He is also facing one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison.
“Ellingson’s alleged criminal actions are far more egregious than just money laundering or the large quantities of narcotics trafficked through the ‘Silk Road’ online marketplace,” IRS-CI Special Agent in Charge Thomas M. Fattorusso said.
“He also claimed to have acted as the middleman between the Silk Road founder and murderers-for-hire. Now, Ellingson will face the consequences of his actions.”
Jared Der-Yeghiayan, who was the lead case agent for the U.S. Department of Homeland Security’s investigation into Silk Road, told Recorded Future News that the latest charges are essentially tying up the remaining threads and loose ends.
For some investigators who worked on the case, particularly agents at the IRS, Ellingson was their “white whale” and the Justice Department is likely looking to seize the massive amount of bitcoin and money that he was sent from various scams on Silk Road.
“There are a few outstanding people that were either associated with the service side of the website – from the vendors that are still outstanding to some of the people that got paid money for doing different things like scamming,” said Der-Yeghiayan, who currently leads the advanced cybercrime & engagements team at Recorded Future. The Record is an editorially independent unit of the company.
“There's not too many left on the bigger side of things, but there's most certainly a few administrators and people that played administrative roles in smaller capacities from earlier stages that I think will potentially see some charges at some point.”
Der-Yeghiayan noted that law enforcement agencies gained access to more than 16,000 names and addresses from the servers connected to Silk Road, so officers are likely working through those and distributing them to other agencies.
“I wouldn't expect it to be the end. The only thing is the statute of limitations,” he said.
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FAQs
Utilizing privacy techniques such as the Tor network and cryptocurrency transactions, people were able to transact in drugs, hacked passwords, illegal data, and other contraband. The FBI shut down Silk Road in 2013, and in 2015, its founder, Ross Ulbricht, was sentenced to prison for life.
What was the Silk Road drug operation? ›
While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to more than 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
Who was Red and White Silk Road? ›
In a statement, the DOJ said 47-year-old Canadian national James Ellingson – known by his Silk Road account names “redandwhite,” “MarijuanaIsMyMuse” and “Lucydrop” – sold more than four kilograms of methamphetamine, more than 100 grams of heroin, more than two kilograms of cocaine, more than six grams of LSD, ...
What is the link between money laundering and drug trafficking? ›
Drug trafficking refers to the illegal production, distribution, and sale of drugs, while money laundering involves disguising the proceeds from these illegal activities to make them appear legitimate.
Is the Silk Road guy still in jail? ›
Ross William Ulbricht (born March 27, 1984) is an American serving life imprisonment for creating and operating the darknet market website Silk Road from 2011 until his arrest in 2013.
How did Silk Road Guy get caught? ›
Investigators traced a series of network records that they obtained under court warrants and eventually identified Ulbricht as a suspect. The FBI arrested Ulbricht and seized his laptop on October 1, 2013. A judge sentenced Ulbricht to life in prison for drug trafficking, computer hacking, and money laundering in 2015.
Is Silk Road legit? ›
The Silk Road was the first modern dark web marketplace, an online place for anonymously buying and selling illegal products and services using Bitcoin. Ross Ulbricht created The Silk Road in 2011 and operated it until 2013 when the FBI shut it down. Its creator was eventually arrested and sentenced to life in prison.
What was the Silk Road owner sentenced to? ›
Ross Ulbricht is infamous for creating and running the Silk Road market and a federal jury found him guilty on seven charges, including conspiracy to traffic narcotics. He was sentenced to spend the rest of his life in prison. Federal Bureau of Investigations.
What killed the Silk Road? ›
The truly decisive blow to the trade arrived around A.D. 1450, when the taxes and tolls of the burgeoning Ottoman Empire deterred almost all of the remaining trade along the traditional Silk Road routes.
Is Silk Road a true story? ›
IN OCTOBER 2013, Ross Ulbricht was arrested by the FBI and charged with money laundering, conspiracy to commit computer hacking and conspiracy to traffic narcotics.
Shut down by FBI in October 2013. Silk Road 2.0 shut down by FBI and Europol on 6 November 2014.
Who traded slaves on the Silk Road? ›
“Central Asian merchants and the elite class in Tang Dynasty were found buying, selling and traveling with human chattels,” asserted Prof. Skaff. Purchase contracts of slaves written on paper have come to light in several tombs in the Turfan region.
Why do cartels need to wash money? ›
“This DEA investigation uncovered a partnership between Sinaloa Cartel associates and a Chinese criminal syndicate operating in Los Angeles and China to launder drug money. Laundering drug money gives the Sinaloa Cartel the means to produce and import their deadly poison into the United States.
What crimes are associated with money laundering? ›
Money laundering is concealing or disguising the origins of illegally obtained proceeds so that they appear to have originated from legitimate sources. It is frequently a component of other serious crimes such as drug trafficking, robbery or extortion.
What is an example of human trafficking and money laundering? ›
To launder dirty money, and as front entities for illegal prostitution and human trafficking, criminals often set up businesses such as model agencies, travel agencies, massage parlors, employment companies, or babysitting services.
What happened during the Silk Road? ›
An abundance of goods traveled along the Silk Road. Merchants carried silk from China to Europe, where it dressed royalty and wealthy patrons. Other favorite commodities from Asia included jade and other precious stones, porcelain, tea, and spices.
What big events happened on the Silk Road? ›
- Creation of Silk. 3000 BCE. China breeds silkworms and creates first instance of silk. ...
- Alexander the Great. 336 BCE — 323 BCE. ...
- The Silk Road Begins. 138 BCE — 116 BCE. ...
- Rome Discovers Silk. 100 BCE. ...
- Buddhism Arrives in China. 100. ...
- Silk Production is Leaked. 400. ...
- Xuan Zang. 629 — 664. ...
- Genghis Khan and Pax Mongolica. 1200.
In 2015, Ulbricht was sentenced to two consecutive life sentences plus 40 years – effectively, life in prison without the possibility of parole – for creating and operating Silk Road.
Why did the cop go to jail in Silk Road? ›
He was arrested and charged with money laundering, computer hacking crimes, conspiracy to traffic narcotics and attempted murder to silence at least five people who threatened to unmask Silk Road.
