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Bitcoin Crime The Almighty Buck The Courts

Silk Road Trial Defense: Mt. Gox CEO Was the Real Dread Pirate Roberts 119

rossgneumann writes The defense team for Ross Ulbricht, the 30-year-old man accused of running the online black market Silk Road under the pseudonym Dread Pirate Roberts, just dropped an unexpected new theory: Mark Karpeles, the CEO of failed Bitcoin company Mt. Gox, is the real Dread Pirate Roberts. "We have the name of the real mastermind and it's not Ulbricht," Joshua Dratel, Ulbricht's lawyer, said in court today. He plans to argue that Karpeles framed Ulbricht.
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Silk Road Trial Defense: Mt. Gox CEO Was the Real Dread Pirate Roberts

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  • Grab the popcorn (Score:5, Insightful)

    by phantomfive ( 622387 ) on Thursday January 15, 2015 @04:42PM (#48824313) Journal
    At this point, I don't care who the real 'dread pirate Roberts' is. I'm here for the show, and the show just got good.
    • If the lawyer was smart, he would pit the DEA against the NSA instead of some bitcoin bozo.

      Now that would be entertaining.

      • Re:Grab the popcorn (Score:5, Interesting)

        by Anonymous Coward on Thursday January 15, 2015 @05:06PM (#48824561)

        What is entertaining is that this agent was actually after Karpeles in 2012 and 2013 as the DPR, complete with prepping search warrants on flimsy and thin theories and asking other agents in separate operations focused on Karpeles not to spook him and ruin his own investigation and reading them the riot act when they did spook him. So really he's just using the Agent's own history to cast doubt.

        • by Anonymous Coward

          Very interesting that he prep'ed search warrant requests but didn't submit them. The other interesting question: How did the defense find *that*? How did that show up.

          • Re: (Score:3, Interesting)

            by monkeyzoo ( 3985097 )

            This is an awesome development! That Karpeles is so hate-able.

            Has anyone watched "The Rise and Rise of Bitcoin" scene where Karpeles apologizes for losing everyone's money? It's hilarious. He says, in Japanese (paraphrasing here), "There was inadequate security, and we lost everyone's bitcoins. I am very sorry about that," and he bows down at the waist, and stays there (awkwardly) for an eternity! It's the funniest thing to see this pudgy Frenchman speaking Japanese and awkwardly performing these Ja

      • by Anonymous Coward

        Maybe the CIA was behind it all long. They have no problem selling drugs to fund their operations in other countries.

      • by Anonymous Coward

        How do you know the real Dread Pirate Roberts didn't work for the NSA. In fact, the most amusing scenario I can come up with is that the NSA created Silk Road and was the first Dread Pirate Roberts. Then they sold it to the DEA. Eventually the FBI got wind of the whole thing and the DEA passed it off to the Mt. Gox dude who framed Ross Ulbricht.

        They only thing that would add to this is if Ross Ulbricht or the Mt. Gox dude worked for the NYPD.

      • What sort of idiot DEA agent would go after the NSA? They have a nice cozy relationship with Big Brother, and would no doubt like to keep it that way. Even if an NSA agent *was* TDPR, the defense would need rock-solid evidence to even consider raising the accusation - after all this case is only addressing whether Ross is TDPR, a much easier case to win if you present an alternative that's a palatable lie rather than an unacceptable truth. Even with rock-solid evidence they might well be better off prese

    • at what point do they trot out Vinnie and Butch before the strongmen get rushed into the Witness Protection System? this looks like the eMafia.

    • by aaron4801 ( 3007881 ) on Thursday January 15, 2015 @06:15PM (#48825141)
      Karpeles kidnapped Ulbricht and made him work on the site. Every evening..."Good night, Ross. Good work. Sleep well. I'll most likely kill you in the morning." Three years he said that. "Good night, Ross. Good work. Sleep well. I'll most likely kill you in the morning." Eventually he wanted to retire. So he took Ross to his cabin and told his secret: "I am not the Dread Pirate Roberts," he said. "My name is Mark. I inherited this site from the previous Dread Pirate Roberts, just as you will inherit it from me."
  • I miss Law and Order (Score:5, Interesting)

    by mythosaz ( 572040 ) on Thursday January 15, 2015 @04:43PM (#48824321)

    You see, *this* would have been the Ripped from the Headlines story of the century.

    I love, love, love this story. Murder for hire, drugs, computers, cryptocurrency, false identities, frame-ups, parallel construction. Oh man, I can't wait for the miniseries.

  • Trolling (Score:5, Insightful)

    by Forgefather ( 3768925 ) on Thursday January 15, 2015 @04:43PM (#48824325)

    It's official. Ross Ulbricht is trolling the government.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      ...and I'm loving every minute of it. Just for that he should be let off.

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Not so much it's actually what the witness (and agent for the gov) thought in 2012
      ""I have a wealth of evidence to prove that [Karpeles] is Dread Pirate Roberts," the agent wrote at the time.

      Karpeles, who is from France, ran what was once the world's largest Bitcoin exchange, Mt. Gox, which was based in Tokyo. DerYeghiayan's theory was that Karpeles wanted to create a market that used Bitcoin in order to keep the price of the semi-anonymous cryptocurrency robust, which he believed was probable cause for Kar

    • Re:Trolling (Score:5, Funny)

      by tnk1 ( 899206 ) on Thursday January 15, 2015 @04:55PM (#48824441)

      Maybe Ross Ulbricht took over from Karpeles after Karpeles retired to Patagonia.

      • by Anonymous Coward

        That real question is what of the 6 fingered man?

        • by mcl630 ( 1839996 )

          And who is Kaiser Soze?

        • That real question is what of the 6 fingered man?

          The 6 fingered man is an allegory; it's actually 6 departments of the US government.

          But we have yet to see the appearance of Inigo Montoya....

  • by halivar ( 535827 ) <(moc.liamg) (ta) (reglefb)> on Thursday January 15, 2015 @04:51PM (#48824395)

    "I am not left-handed."

    • Re: (Score:3, Funny)

      by Anonymous Coward

      Judge: "Oh, there's something I ought to tell you... I'm not left-handed either."

  • by sirwired ( 27582 ) on Thursday January 15, 2015 @04:54PM (#48824419)

    Karpeles: "I'm not the real Dread Pirate Roberts either. His name was Cummerbund, and he's been living like a king in Patagonia for 20 years."

    • I think these guys are the "real killers" too

    • by Grog6 ( 85859 )

      The drag is that there probably is a more Evil character involved than DPR, much like the movie.

      I predict there will be R.O.U.S. springing from the woodwork everywhere soon as well. :)

      There is a lot of Parallel Construction at work as well.

  • The agent's theory that this was done to keep the price of bitcoins high doesn't make sense. There's more money to be made in arbitrage by having the price fluctuate wildly, especially if you're the one controlling when bitcoins that are taken off the market (MtGox trades them for real money) are converted to other currencies.. A small float leaves it open to greater manipulation, same as penny stocks.

    Also, why would anyone wait until now to introduce such a theory? "Oh, maybe they want to sue the US af

    • And now he's gonna piss off the jury,because they're going to smell it for what it is - an attempt to fool the jury.

      unfortunately, i think you are overestimating most juries

      their affinity/ understanding of soap opera level drama is way more than their understanding of basic tor networking or how bitcoin works

      get into the technical facts that prove ulbricht is guilty, and their eyes will glaze over and they will fall asleep

      start tossing random unfounded accusation smoke screens, the prosecution shouting "objection," the judge growling "sustained"... and they'll perk right up and start writing notes

      • At the same time get into the technical facts that prove someone is innocent and they will zone out until something loud and shiny happens.
      • Jurors have a good bs detector. They don't need to understand the technical details to know when someone's blowing smoke up their skirts.
        • Do you say this because the jurors are your peers?

          I've been on juries where the people with BS detectors were a vocal minority. It made me think: "What if I was on a jury where the guy with the BS detector wasn't so vocal?"

          The worst part is that on one of these, we found the guy not guilty even though he had obviously done it -- because the prosecution failed to prove their case but attempted to lean on BS to prop things up instead of evidence, leaving reasonable doubt.

          See, the prosecution thought they'd done enough because most of the jury was nodding and obviously agreeing with their argument. That one guy pointed out the fact that no actual evidence had been presented, just circumstantial evidence.

          Unfortunately, that one guy wasn't even me :) The prosecutors did a really good job until you broke everything down and tossed out what wasn't fact -- which on this case took days of being sequestered to fully untangle. Many others were really annoyed that the one guy wouldn't just shut up and let everyone go home on a guilty verdict.

          • No, I say this from experience with a couple of murder trials - one as a witness, the other as a juror.
          • That one guy pointed out the fact that no actual evidence had been presented, just circumstantial evidence.

            It's tough to judge based on that description. But enough circumstantial evidence is evidence.

            • Yeah; that was what took the extended deliberation -- deciding if it was enough. The prosecution probably *could* have provided enough in this circumstance, but the jury decided he didn't, likely because he was so confident that he'd already swayed us with the "obvious" circumstantial evidence.

              This just proves the point I was making though -- even when the jurors can see through the grandstanding, it doesn't mean that they'll react positively or negatively to being cajoled along by the professionals -- the

      • I've actually been on juries and I've seen this sort of tactic tried a number of times as well. No one on any of the juries fell for it and it ended up always backfiring for he defense.

        • Coworker of mine was on a drug trial jury (back in ~1990 in New Jersey.) The (Hispanic) defendant had bought some airplane glue at the hardware store, and was carrying it home in the plastic bag from the store. The cop claimed that obviously he was intending it for glue sniffing, and the plastic bag was the drug paraphernalia he was planning to sniff it in, and was obviously Guilty Guilty Guilty. Joe was not only appalled that the case was brought in the first place, but that he and one other techie were

          • by Anonymous Coward

            I once had police issue a warrant for my arrest for "assaulting a police officer". When I handed myself in a week later, rejecting the charge, they made out a "statement" by the officer which contained my description.
            When it went to trial I called the people that had cut my beard and trimmed 6 inches off my hair on a day BETWEEN the alleged assault and the day that I handed myself in.
            The police were caught out in a lie and their fabricated story didn't wash with the jury and I was acquited, but NOTHING ever

    • by drerwk ( 695572 ) on Thursday January 15, 2015 @05:05PM (#48824549) Homepage
      I don't think the soundness of the theory is so important to the jury as is the fact that the agent was sure this other guy was the DPR, and now the agent is sure the defendant is the DPR - the agent has to admit to being wrong before and can be asked why in 6 months he would not have a new theory about who really is the DPR. I think it leaves a lot of doubt about the certainty the agent ought to feel about his theory.
      • by BarbaraHudson ( 3785311 ) <barbarahudson@gm a i l.com> on Thursday January 15, 2015 @06:11PM (#48825103) Journal

        The juror is there to determine the facts of the case. The prosecution and defense are both giving their sides. The jury may decide that there's reasonable doubt, doubt but it's not reasonable, or no doubt one way or another. It's their call. They really don't care about the agent's theories, because they are not FACTS.

        You can present 1,000 theories about why there should be some doubt about you being the killer, including the police originally thinking it was someone else - but if facts, such as a video surfaces of you doing the deed, and they find the weapon with your dna and fingerprints on it, you're most likely toast. The facts trump any amount of theories.

        • by lgw ( 121541 )

          Juries want a "story of the crime" they can believe. Prosecution and defense each tell such a story, and juries go with the more compelling tale. The job of the defense is to invent a story that includes all the facts and still explains why the defendant didn't do it.

          That's why we have this somewhat goofy story of the bitcoin CEO - the defense does far better when they present a specific alternative killer (that's a better story than "some unknown guy"), and any suggestions that put the alternative in the

        • by drerwk ( 695572 )

          The juror is there to determine the facts of the case. The prosecution and defense are both giving their sides. The jury may decide that there's reasonable doubt, doubt but it's not reasonable, or no doubt one way or another. It's their call. They really don't care about the agent's theories, because they are not FACTS.

          I assume that the agent's theories were developed to support some set of facts that he had at hand and that those facts can still be pointed to in support of the previous theory. I've not studied this case in any detail, but I know that the goal of any prosecutor is to get a conviction, sometimes more so than being sure they have the right guilty party on trial. While in the ideal world, justice and truth might converge, in our world justice is on a clock and the truth is not.

    • Having oil traded in dollars seems to be working out reasonably well for some.
    • by Anonymous Coward on Thursday January 15, 2015 @05:51PM (#48824921)

      Why wait until now?

      Now, they've got a Federal agent on the witness stand, they've gotten his files through discovery, and they're asking him to read from those files.

      Money quotes like "I have a wealth of evidence to prove that [Karpeles] is Dread Pirate Roberts"

      Did the Fed have a fully consistent theory of how and why Karpeles was interested in keeping a lot of bitcoin on the move?

      Who cares - the discovery produced excellent reasonable doubt from a prosecution expert witness.

      If they'd introduced this argument ahead of this agent's testimony, the DoJ would have made him temporarily unavailable until they reclassified his work on national security grounds. The prosecution's already halted the trial to have a meltdown at the notion that the defendant is entitled to a vigorous defense.

      • No, it hasn't. It depends on what facts both sides are able to come up with. Theories are just that - theories. Jurors are there to sort through it all and determine the facts of the case. If I were the prosecutor, it would be very easy to turn this testimony to my advantage by asking the agent what finally changed his mind, since he was SO certain - he must have had a pretty powerful reason.

        If the prosecutor is having a meltdown, either he or she is out of their league, or they're acting because they wan

        • Theories can be useful to the defense. The jury is there to determine facts, but primarily to either be convinced (beyond reasonable doubt) that the defendant did it or not to be so convinced. Ideally, a plausible explanation that doesn't involve the defendant being guilty will result in an acquittal.

    • The agent's theory that this was done to keep the price of bitcoins high doesn't make sense. There's more money to be made in arbitrage by having the price fluctuate wildly, especially if you're the one controlling when bitcoins that are taken off the market (MtGox trades them for real money) are converted to other currencies.. A small float leaves it open to greater manipulation, same as penny stocks.

      Arbitrage is only useful for something for which there is an established market.

      A simultaneous purchase and sale of bitcoins will only work if you have, simultaneously, both a buyer and a seller, and you are the middleman. Mt. Gox was indeed the middleman, and could, indeed, attract sellers (miners), but in order to have buyers, bitcoins would have to have utility.

      Mt Gox was more in the position of what's called a "Market Maker", and made money not through Arbitrage, but by providing liquidity in the marke

    • by rtb61 ( 674572 )

      Of course maybe it is just a lie built around a truth, there was more than one Dread Pirate Roberts, in fact there was a whole family of them. With any digital ponzi currency that is easy to produce at first and then gets harder, all you want is a high price because of course those that kick off the ponzi currency scheme create a huge hoard for themselves prior to attempting to launch the currency. So rising and falling prices does them no good at all because they have a huge hoard to get rid of. Of course

      • by Maritz ( 1829006 )
        You call it a 'digital ponzi currency' to express your disdain for it, but in doing so your completely weaken your own position, because a ponzi scheme is completely fucking different.
        • by rtb61 ( 674572 )

          Ponzi schemes start easy and become hard, for late comer a delusion for early starters very profitable, basically selling nothing but pretending it will have a huge future value that others will pay for ie exactly like bitcoin schemes and I am surprised why they are not prosecuted as such. Seriously money for nothing https://www.youtube.com/watch?... [youtube.com] here cheer up and listen to your theme song.

  • by sirwired ( 27582 ) on Thursday January 15, 2015 @05:00PM (#48824491)

    Hans Reiser tried the "somebody else did it" defense. He suggested it was somebody else, but presented no more than vague hints in that general direction suggesting that somebody else had motive. (And, of course, it was all silly hand-waving, since he later confessed and led police to the body.) For Ulbrict's sake, let's hope he has something more substantive.

    The police have no obligation to investigate alternate suspects once they've decided on one to charge. If you, defendant, want to blame the crime on somebody else, you need to perform your own investigation rather than merely pointing out the police didn't chase after whomever the defendant thinks would be a more worthy suspect.

    I don't know if Ulbrict has some real evidence; if he did, you'd think he would have released it by now.

    • Yeah, tfa says the people investing âUlbricht also have a "wealth of evidence" that Dread Pirate Roberts was Karpeles.

      Mix that in with Ulbricht only needing one air tight alibi that he couldn't of done something DPR did (highly likely if multple users shared the DPR account)

      And he'll be walking out a free man.

    • Hans Reiser tried the "somebody else did it" defense.

      Maybe he suggested that at some point, but his main argument was that Nina had gone back to Russia.

      For Ulbrict's sake, let's hope he has something more substantive.

      For justice's sake, let's hope the jury is able to navigate the technical details, filter out bullshit theories and scare-mongering, and render an accurate verdict--whether it's guilt or not gulity.

  • by goldcd ( 587052 )
    Or maybe it isn't.
    Just personally I'd liked the idea of the defendant stepping up, admitting running the whole thing, and saying he'd arranged a x many hundred thousand/million drug deals where nobody got hurt, nobody was coerced and to possibly point out that the major issue with narcotics is merely how they're handled, rather than their eternal existence and the last century's completely useless attempts at prohibition.
    Whoever ran SR, they'll forever have my admiration for what they did and voluntarily
    • Re:FUD (Score:4, Informative)

      by GameboyRMH ( 1153867 ) <gameboyrmhNO@SPAMgmail.com> on Thursday January 15, 2015 @05:58PM (#48824969) Journal

      Do you also support contract killings? Because he ordered hits on a few people.

      • by goldcd ( 587052 )
        He didn't.
        • According to the charging documents he most certainly did. They document a case where he hired a hitman to wipe out a former developer but the job went to the FBI who faked the death and provided "proof". Said person is one of the witnesses against him that he is DPR. You might argue that it's a made up story but the story exists.

          • I seem to originally recall when he was first arrested, that he was charged with actually having people killed.
            This having been proudly announced before they actually knew who these people were, had any bodies, just ridiculously, laughable over-charging (and clearly designed to bias whatever came next).
            I'm interest to see where this all goes - but so far it appears to be utter bollocks and lies (now) from both sides.
      • by sjames ( 1099 )

        We get the killings either way. Admittedly when the U.S. does it they use cool flying robots, but still...

      • Re:FUD (Score:4, Insightful)

        by jdavidb ( 449077 ) on Thursday January 15, 2015 @10:55PM (#48826893) Homepage Journal

        Do you also support contract killings? Because he ordered hits on a few people.

        The U.S. government that is prosecuting Ross pays for killings every day. Why should they have a monopoly?

      • Do you also support contract killings? Because he ordered hits on a few people.

        Or so you've been told by the Fed^H^H^H Media.

      • by sudon't ( 580652 )

        I would like to take the time to point out to anyone thinking of doing this: Anyone claiming to be a hit man is actually a cop. That probably goes for anyone claiming to be a teenage girl who is interested in your online sexual advances, as well. Hope I've saved you some trouble.

  • Blame the dead bank....

    If this is the best he can do, I'm going out on a limb here and predicting he will be convicted on all counts....

    BTC is just a cauldron of crime and deceit, it's basically used to launder money, hide assets and pay for illegal goods... Oh yea, now and then somebody does something perfectly legal using it...

  • If it hadn't been for this kids and their dog
  • I'd be all over that Kim Something Ill or other, and blame North Korea! After all, they have the most elite hackers in the world! Use the FBI against themselves.

  • Where the FBI submit a swore affidavit that Kim DotCom is Dread Pirate Roberts to the New Zealand courts in a bid to further his extradition to US, because surely those sheep-loving Kiwis can't possibly resist the War-on-Drugs(tm) as a legitimate reason to let the MPAA/RIAA go after Kim DotCom for digital piracy[1].

    If he wasn't under so much financial pressure (freezing of assets) I'd expect him to make a press release suggesting it himself.

    But the conspiracy theorists will posit that John McAfee is the rea

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