ZOE CHACE, BYLINE: Hey, PLANET MONEY listeners. When you finish with today's episode, NPR recommends another great show, the TED Radio Hour hosted by the excellent Guy Raz. You can find the TED Radio Hour where you get all your podcasts - iTunes, Stitcher. Just a warning, this podcast has some language and adult themes that might not be appropriate for children.
STEVE HENN, HOST: Last year, this guy named Ross Ulbricht was working away on his laptop at a local library - the Glen Park Public Library in San Francisco. Now, most days it's a pretty busy place. There are rows of public computers. There are some desks in a corner next to these giant windows and Ross was sitting back there, it's in the Science Fiction section, right next to like, the Isaac Asimov and Arthur C. Clarke novels.
CHACE: The library is tiny. It is quiet. It does not feel like the secret lair of an international super villain.
HENN: But according to the FBI, the DEA and Homeland Security the library was, at least on that one day last year, the global headquarters of an international online drug market. On October 2, 2013 a team of federal agents snuck up behind Ross Ulbricht. They pinned his arms to his side and grabbed his open laptop.
CHACE: Ross, they allege, was the criminal mastermind better known online as the Dread Pirate Roberts.
HENN: Hello and welcome to PLANET MONEY. I'm Steve Henn.
CHACE: I'm Zoe Chace. Today on the show, the story of the Dread Pirate Roberts, the man who dreamed of setting up a utopian marketplace on a dark little corner of the Internet.
HENN: A place where you could buy and sell almost anything in secret, anonymously. A place with no contracts, no regulations, no courts, no cops, really no government interference of any kind. The Dread Pirate Roberts believed in total economic freedom, but in order to make it work, in the end he had to do some really bad things.
(SOUNDBITE OF SONG, "THE BADDEST MAN ALIVE")
THE BLACK KEYS: (Singing) I'm the baddest man alive. I'll grab a crocodile by his tail. Handcuff the judge and throw the cops in jail.
HENN: OK so there's one thing we have to get out of the way right at the top. Ross Ulbricht denies that he's some kind of drug kingpin. He denies that he was the creator of this online persona the Dread Pirate Roberts. His trial isn't scheduled to begin until early next year and pretty much everyone he grew up with - his entire family, his former teachers, his friends - say they just can't see it.
CHACE: They say Ross is a sweet guy, a tech nerd. A guy who just a couple years ago spent an entire afternoon with his best friend in a radio studio recording his innermost thoughts and feelings for the public radio project StoryCorps.
(SOUNDBITE OF ARCHIVED RECORDING)
ROSS ULBRICHT: I'm pretty sure I want to start a family in the next five years and just, yeah - make more friends and close people I love, yeah. I want to focus on being more connected to people.
CHACE: OK so that's Ross. He went to grad school for physics, but something happened while he was there. He started writing online that he was no longer interested in research or science, he was now interested in economics. He said things like - this is a quote - "I want to use economic theory as a means to abolish the use of coercion and aggression amongst mankind."
HENN: Ross Ulbricht was becoming a libertarian, he saw governments' taxation and regulation as this massive system of coercion backed up by violent threats, jail, police guns and so on LinkedIn, of all places, Ross wrote this kind of manifesto and at the end he declared, quote, "I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systematic use of force." Now, what this project would be, what the simulation was, Ross didn't say.
CHACE: Here's what we do know. In January of 2011, a new site appeared on the Internet. It was called the Silk Road Anonymous Marketplace. You couldn't just Google it and click on a link. It was a hidden part of the Internet. You had to have a certain type of anonymous web browser to get there then you needed to know the exact address in order to find it. Andy Greenberg is a journalist and he remembers stumbling into the Silk Road Marketplace when he was looking for sites that accepted the digital currency Bitcoin.
ANDY GREENBERG, JOURNALIST: And it seemed to be trying to offer any drug imaginable, but I couldn't really tell if it was a hoax or a kind of silly experiment. Bitcoin itself was like, hardly something that anyone took seriously at the time so this idea that you could use it to create a totally anarchic drug market seems - you know, also seemed kind of far-fetched.
HENN: It was crude-looking, like, think about Amazon circa 1999. There was this picture of a funky green camel up on the upper left and then this long list of drugs underneath. You could click on weed or ecstasy or opiates or stimulants, and then you'd see a list of sellers and quantities and prices. Eventually the site added consumer reviews.
CHACE: The market was a libertarian dream. There was no leader, no guy in charge, no regulators, no rules, just a system administrator but even that guy did not have a name. If you wanted to send a message to him, you just sent it to the name Silk Road. But as the site grew and got more popular, this system administrator started to become a bit of a celebrity, especially when he started writing directly to the users of the site.
HENN: Now, this guy has never been recorded. He's never been interviewed in person. He never sat down with anyone. He's only sent computer messages.
CHACE: So this is what we did. We picked out a nice computer voice for him.
DREAD PIRATE ROBERTS: (Through computer voice) I need a name. Drum roll, please.
CHACE: One day, the system administrator wrote on the site.
DREAD PIRATE ROBERTS: (Through computer voice) My new name is Dread Pirate Roberts.
CHACE: The Dread Pirate Roberts. He was born on February 5 of 2012. The name of course comes from the movie "The Princess Bride."
(SOUNDBITE OF FILM, "THE PRINCESS BRIDE")
ROBIN WRIGHT, ACTRESS: (As Buttercup) I know who you are. Your cruelty reveals everything. You're the Dread Pirate Roberts, admit it.
CARY ELWES, ACTOR: (As Dread Pirate Roberts) With pride.
CHACE: It's the perfect title for this guy. The Dread Pirate Roberts in the movie isn't really a pirate. He's just a sweet guy named Westley and he's taken on the pirate's identity.
(SOUNDBITE OF FILM, "THE PRINCESS BRIDE")
ELWES: (As Westley) Let me explain - the name was the important thing for inspiring the necessary fear. You see, no one would surrender to the Dread Pirate Westley.
HENN: And even though the Silk Road was this bare-bones anonymous site, the Dread Pirate seemed to delight in having this name, this identity, a personality. He started to evangelize on the Silk Road. For him this is about more than drugs, it was a philosophical mission.
DREAD PIRATE ROBERTS: (Through computer voice) Every single transaction that takes place outside the nexus of state control is a victory.
HENN: Andy Greenberg, the journalist, was watching this transformation.
GREENBERG: Well, at first I was just reading his messages like everyone else. He was kind of the emcee of this whole party. He was posting these libertarian manifestoes and these love letters to the community. He was constantly talking about, you know, cyber-attacks that had hit the site or the threat of law enforcement. He was a really present character. People talked about him as this Che Guevara-like figure.
HENN: The Dread Pirate would preach economics, explain everything, reassure everyone.
GREENBERG: Then there was even a Dread Pirate Roberts book club.
HENN: So the Dread Pirate Roberts had a book club on the site?
GREENBERG: Right and very specifically, it was a book club all about free market economics, you know, Austrian theory, radical libertarian ideas.
HENN: So would they read like, Hayek one week and then have a discussion forum on Friday?
GREENBERG: I'm not sure that it was as highbrow also as you are making it out to be. I remember that they also at one point watched "V For Vendetta" and the Dread Pirate Roberts was really into it, he found it very inspirational.
(SOUNDBITE OF FILM, "V FOR VENDETTA")
HUGO WEAVING, ACTOR: (As V) People should not be afraid of their governments. Governments should be afraid of their people.
DREAD PIRATE ROBERTS: (Through computer voice) What a flake. I got so engrossed I forgot to chat with you guys while I was watching.
HENN: According to the Dread Pirate Roberts, the goal of the Silk Road was never just to get rich personally, or get lots of people high. According to the Pirate, this was all about freedom, but it became clear pretty quickly that in order for this market to work, it still needed rules.
CHACE: The Silk Road needed some kind of government, even if it was a government run by one guy. The Dread Pirate Roberts, he hired a team of administrators to help resolve disputes. That was one of the first steps in regulating this thing and he decided that even a lawless community was going to need some laws.
HENN: And the Dread Pirate Roberts was actually pretty firm about some stuff. He said, sure, you can sell drugs but absolutely no child pornography, no stolen credit cards.
GREENBERG: He was very clear about only selling victimless contraband and he believed that drugs were something that everybody should be free to use, it was your decision.
HENN: The Dread Pirate was now pretty clearly the center of this site. He was the law.
CHACE: And he wanted to be the center of the site not just for his ego, which presumably was substantial, but to solve a fundamental business problem the Silk Road had. How can a bunch of criminals trust each other to do business with each other?
HENN: Wait - they're not criminals. They're freedom-loving libertarians.
CHACE: (Laughter) Yes, that is another way to put it - and the first visitors to the Silk Road, they thought it looked like a scam, a list of anonymous drug dealers asking for money and then just promising that they will mail you hashish or whatever you want.
HENN: Hey Zoe...
HENN: ...I'll send you some drugs if you send me money first.
CHACE: OK, great. Yeah, like, I'm not going to send money to that guy - and so that is a problem for a marketplace.
HENN: To get around that lack of trust, Zoe, this is what they did - the Dread Pirate said when you bought drugs on the site, you wouldn't mail your money, your Bitcoin, directly to the drug dealer. You'd send the money to the Dread Pirate and the Pirate would hold it until you got the drugs and then when you did, then he'd release it and the drug dealer would get paid.
CHACE: And that's a really old solution. This is what banks do. It's just called an escrow account.
HENN: And Andy Greenberg - who interviewed the Pirate via encrypted chat - says this is actually what made the Silk Road work.
GREENBERG: Well, you know, I asked him what is your role as the Dread Pirate Roberts? Are you the CEO or the administrator? And he responded that he saw himself as the center of trust of the site, which I thought was a pretty interesting way of putting it because that is what the Silk Road requires.
CHACE: And this guy was a celebrity on that site. People loved him and they trusted the system. By 2013, according to the feds, the Silk Road had done $1 billion in business and the Dread Pirate Roberts had collected almost $80 million in commissions for these sales.
DREAD PIRATE ROBERTS: (Through computer voice) It gives me the sensation of, holy [bleep], this is epic.
HENN: It was so epic that the Dread Pirate said he heard the theme music from the movie "Tron" playing in his head.
HENN: So take one free anonymous legal market, fill it with criminals or free market libertarians and then you add a charismatic leader with almost total control, and what happened next perhaps isn't that surprising. The Dread Pirate Roberts eventually went too far. He allegedly used his power in a very disturbing way.
CHACE: The DEA, the Drug Enforcement Agency, they were watching the Silk Road and they had been for a long time, trying to find the Dead Pirate and take him down and in court documents they reveal how they did it.
HENN: On December 7, an undercover DEA agent calling himself nob - N O B - contacted the Pirate. Nob's cover story was that he was a big-time drug kingpin and he wrote this note to the Pirate and the note said, most buyers, they want very small amounts on the Silk Road - like he was intrigued - and then he said, but it's not really worth it for me to do below 10 kilos.
CHACE: And the Pirate responded.
DREAD PIRATE ROBERTS: (Through computer voice) I'll look around.
CHACE: The next day, the Dread Pirate writes back to the DEA agent.
DREAD PIRATE ROBERTS: (Through computer voice) Hey, I think we have a buyer for you. One of my staff will send you the details.
HENN: That staffer was the Pirate's right-hand man. Online, this guy went by the name chronicpain - and chronicpain had access to all of the site's money. He ran the site's escrow accounts. He arranged this entire deal but, without telling the Dread Pirate, he made one incredibly stupid decision. Now, we don't know why, but chronicpain agreed to have these drugs shipped directly to his own home in the tiny town of Spanish Fork, Utah.
CHACE: In real life, this guy chronicpain was a 47-year-old Mormon grandfather. His real name is Curtis Clark Green. He's overweight and he walks with a cane and on January 17, federal agents surrounded his home and took him in.
HENN: Now, at first the Dread Pirate Roberts doesn't know that any of this has happened. All he knows is that chronicpain has access to basically all of the site's money - millions of dollars in Bitcoin - and he has just disappeared from the Internet.
CHACE: Right, and so he thinks that he's been robbed.
HENN: So the Dread Pirate Roberts tracks down chronicpain's real identity and then he sends a message to nob, the DEA agent - and remember, he thinks nob is this real-life drug kingpin - and now, the Dread Pirate asks for a favor.
DREAD PIRATE ROBERTS: (Through computer voice) I'd like him beat-up then forced to send the Bitcoins he stole back. Like, sit him down at his computer and make him do it.
CHACE: The next day, the Dread Pirate Roberts hears that Green has actually been arrested. Now his anger turns to fear and he messages nob again.
DREAD PIRATE ROBERTS: (Through computer voice) Can you change that order to execute, rather than torture?
HENN: He just put a hit out on his own employee, Curtis Clark Green. The Dread Pirate Roberts was worried that Green would talk, that somehow he would leave the police directly to his own door so he decided to have him killed.
DREAD PIRATE ROBERTS: (Through computer voice) I have never killed a man or had one killed before, but it is the right move in this case. I'm more concerned about silencing him than getting that money back. Considering his arrest, I have to assume he will sing.
CHACE: Then the DEA, the FBI and Homeland Security did something that sounds kind of crazy - they faked this guy Curtis Green's death. They staged pictures of him being tortured, actually, waterboarded.
HENN: Then the feds sent the Pirate a fake picture of a dead chronicpain. The Pirate wrote back.
DREAD PIRATE ROBERTS: (Through computer voice) I don't think I've done the wrong thing. I'm sure I will call on you again at some point, though I hope I won't have to.
CHACE: And once he saw the pictures, the Dread Pirate wired nob, the federal agent, $80,000 for the hit.
HENN: For years, this guy, this online character the Dread Pirate Roberts, had railed on the Silk Road against the use of state-sanctioned violence, but when he was confronted with the choice between killing a man - one of his closest confidantes - or possibly watching his dream of this libertarian marketplace get torn apart, according to the feds, he chose to kill.
CHACE: The point of all the trickery from the feds's side was to get the Dread Pirate to trust nob, the federal agent, enough to possibly give up something to reveal his location or his real name but it actually wasn't the fake killing that was the downfall of the Dread Pirate Roberts. It was this stray bit of data.
HENN: The FBI had been trying to trace the data coming to and going from the Silk Road for years and eventually they say they saw something that gave up the computer's real location - the computer that ran the Silk Road - and apparently it was in Iceland.
HENN: They found the server, they copied it and then they followed this digital trail back through Pennsylvania, to San Francisco, to a public library, to a laptop computer with Ross Ulbricht at the keyboard. Now, once again, Ross Ulbricht denies he's the Dread Pirate Roberts. I was unable to speak to him and his attorney declined to comment.
CHACE: One thing we do know for sure is what Ross Ulbricht was doing the day before the whole drama started with the DEA and nob and chronicpain. The day before, Ross Ulbricht was in a radio booth recording himself for the public radio program StoryCorps.
(SOUNDBITE OF ARCHIVED RECORDING)
ULBRICHT: Today is November 6. Is that right?
UNIDENTIFIED MAN: December.
ULBRICHT: Oh. It's December the 6, 2012 here in San Francisco.
CHACE: Ross Ulbricht did not sound like a mastermind and a killer.
(SOUNDBITE OF ARCHIVED RECORDING)
ULBRICHT: I want to have had a substantial positive impact on the future of humanity.
UNIDENTIFIED MAN: Do you think you're going to live forever?
ULBRICHT: I think it's a possibility. (Laughter). I honestly do. I think I might live forever in some form by that time. Technology's changing so fast.
HENN: Federal prosecutors say they're sure this is the guy who was actually the Dread Pirate Roberts. They say they found Ross Ulbricht's laptop open to the Silk Road site to the administrative pages. They say they found the Dread Pirate's stash of Bitcoin on his computer and actually, Ross Ulbricht has claimed those Bitcoins as his own.
CHACE: But that isn't quite the end of this story. Within weeks of Ross Ulbricht's arrest, another Silk Road site popped up on this anonymous part of the Internet and just like in the movie "The Princess Bride," another person popped up online calling himself the Dread Pirate Roberts. Within months there were dozens of imitators.
HENN: Recently there have been more takedowns, more arrests and today, most cybercrime experts say the only illegal markets left standing are run by gangs of criminals in countries where they are protected by corrupt governments of their own. The days of libertarian, idealistic marketplaces seem to be over. We always love to hear what you think about our show. You can find us at planetmoney.com or on Twitter @planetmoney. I'd like to thank Andy Greenberg for his thoughts and help and being so generous with his time, and of course our own Phia Bennin, who produced this show and is our personal Inigo Montoya.
CHACE: (Whispering, imitating Inigo Montoya character) You killed my father - prepare to die. Also, if you want to hear other NPR podcasts now that you're at the end of this episode, NPR recommends you check out the TED Radio Hour. Of course you can find it where all podcasts are found, on iTunes or Stitcher. I'm Zoe Chace.
HENN: I'm Steve Henn. Thanks for listening.
(SOUNDBITE OF SONG, "THE BADDEST MAN ALIVE")
THE BLACK KEYS: (Singing) I'm the baddest man alive.
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