American Kingpin

by Nick Bilton

  “Ross, maybe it’s time to stop doing this,” Julia said to him after she, too, had realized the potential consequences. “Maybe this is growing too big and too quickly.”

  But Sweet Ross didn’t respond. Instead, Rebel Ross was toiling away trying to figure out the problems with the code that were making his profits on the Silk Road evaporate. Not only was he not going to take Julia’s advice to stop working on the site, he was instead going to batten down the hatches so those U.S. senators would never be able to find him.

  Chapter 13

  JULIA TELLS ERICA

  Calm washed over Julia as she lay on the floor listening to the orchestra of sounds outside the window. New York’s police sirens wailed; the trees rustled; the Bronx elevated subway trains screeched and squealed. As she waited for the weed to kick in, Julia felt relieved that she would be away from Ross for a week.

  “Here you go,” her friend Erica said as she leaned over and passed the joint back to Julia.

  Julia pulled the embers back toward her lips, swallowing the skunklike air into her lungs. She wondered if she should tell Erica the reason for the sudden visit to New York City. Julia hadn’t told anyone—not a solitary soul—about the Silk Road, the mushrooms, the senators, and the hackers Ross now employed to help him with his Web site. None of this had ever passed her lips. But lately she had become scared, not only for Ross but also for herself. She didn’t know if she was an accomplice in all this. She hadn’t written a line of code or profited a penny, but it still terrified her. For some perplexing reason, Ross had continued to share each new secret with her and expected her to keep them—and to be perfectly okay from a moral standpoint.

  In the beginning, eight months earlier when Ross had started the Silk Road, she had been fine with these random unknowns, as the site was so small and unimportant. But things had changed since then.

  Selling weed, she was fine with. She had never heard of a single recorded instance of someone overdosing from a bong hit. And mushrooms, well, they grew in the ground and they made you happy. But in recent months new products had become available on the site. Crack, cocaine, heroin, variations of highly addictive drugs she had never even heard of that were made in secret labs in Asia. Her doubts grew.

  “What if someone overdoses?” she said when crack and heroin surfaced on the Silk Road.

  “We have a rating system,” he replied resolutely. “So if someone sells bad drugs, they get a bad rating and no one will buy from them again.”

  “And if they’re dead? How are they supposed to give someone a bad rating if they’re dead?”

  These conversations would go on for hours, just spinning, spinning, spinning, and finding no end. No matter what Julia said, Ross always had an answer, often baked in intellectual analysis or libertarian theory. When the tête-à-tête went round in circles too many times, he would simply end the conversation by saying, “Well, we will just have to disagree on this.”

  Those disagreements, combined with the attention the site was now getting from the media and government, had turned the lovebirds’ once-in-a-while wrangles into a once-a-day war. “You have to quit,” Julia would yell. “You’re going to end up in jail for the rest of your life, and how am I supposed to get married and have a family with someone who is in jail?” To which Ross would calmly reply, “I can’t get caught because I’m protected by Tor and Bitcoin.” He would then begin a rehearsed diatribe about his legacy. The site, he proclaimed, would be his greatest contribution to society. He was helping people, keeping them safe from the streets, where drug deals could get one thrown in jail or, worse, hurt or killed. Didn’t Julia see that? Didn’t she want to be a part of it?

  As if they were repeatedly reading from the same script, a verbal brawl would ensue, and then one of them would storm out of the apartment or into another room. A few hours later, love would magnetically draw them back together. They would make up and fall asleep in each other’s arms, Julia dreaming of a white picket fence and a couple of giggling children running around in the yard, Ross’s reveries of the Silk Road growing so large that one day he would overturn the drug laws and be lauded for the positive impact he had had on society.

  The next morning the pugnacious lovers would start all over again.

  The site had also started to affect other areas of their relationship. Julia wanted to go out dancing or be taken to a nice restaurant with all the money he was now making from his commissions. And yet Ross was perfectly happy eating peanut butter and jelly sandwiches while tapping out code on his laptop. Days would go by where he wouldn’t shower, would barely talk to her, and would just sit in his chair in their bedroom (often naked) on his computer.

  Julia had begun worrying so much about the state of their relationship, and Ross’s well-being in general, that she had started to have panic attacks on a regular basis. She peered at men in the grocery store and wondered if they were undercover cops who knew that she lived with the man who had started the Silk Road. She cried in the shower. She loved Ross so much, but he appeared to love his Web site more.

  Life went on like this for weeks, each day echoing the last, until one evening Ross came home with fervent excitement in his eyes. Enraptured, he told Julia he had to show her something. He opened his laptop, fiddled around for a few seconds, and then spun the computer around for her to see. Over time he had made every effort possible to convince Julia that the hard drugs should be listed on the Silk Road, using his salient argument that the government should have no right to tell you what you could and could not put in your own body and that crime and violence would fall if there were no drug wars. While she didn’t necessarily agree with his viewpoints, she understood his reasoning, and it made sense in theory. But there would be no convincing Julia of the merits of what he was about to show her.

  “Look,” Ross said proudly as he pointed at his laptop screen. “There are guns that just got listed on the site.”

  Julia stared in disbelief, a feeling of nausea enveloping her. “Ross,” she said pleadingly. “This isn’t normal.”

  “Why isn’t it normal? It’s our constitutional right to have guns, we should be able to have—”

  She interrupted him: “Tell me why would someone need to buy guns anonymously.”

  “That’s not my responsibility to ask; it’s not up to me to decide why someone does something,” he remarked, annoyed that Julia didn’t share his excitement. “It’s the people’s choice.”

  “Yes, but—” she began, but he cut her off.

  “So the government can have guns, but the people can’t?” Ross said. (He would echo this on the Silk Road, privately telling his new employees, “I’ve always been pro gun. It is a power equalizer against tyrannical governments.”)

  Julia intuitively knew her conscience was right. But even when she offered clever, cogent retorts, Ross would shut the conversation down by simply saying, “Well, we will just have to disagree on this.”

  For Julia, the guns were an enough-is-enough moment. Light drugs? Absolutely. Hard drugs? Fine. Maybe Ross was right; maybe we all did have the right to put whatever we wanted in our own bodies. How could the government say that we could drink alcohol, which killed ninety thousand Americans a year; or that people could smoke cigarettes, which killed forty thousand people a month in the United States; or even red meat, which caused hundreds of heart attacks a day; and it wasn’t okay to smoke weed, which killed no one? But buying illegal guns anonymously? This Julia couldn’t agree with. A few weeks later she boarded a plane to New York City.

  She figured that fall in the Northeast would help clear her head. Erica greeted her with a big hug. Then they sprawled out on the living room floor and talked. In the distance, through the window, she could see the soft white and blue lights of Yankee Stadium radiating into the night sky. The setting couldn’t have been more different from the chaos of the past few months, and as the sounds of the Bronx hummed outside, J
ulia made a decision. She sat up from the floor and turned to Erica. “I have to tell you something,” Julia said.

  “What?” Erica replied.

  “You have to promise me you will never tell anyone,” Julia pleaded. “Never! Ross would kill me.”

  “I swear!” Erica said, now curious about the secret that loomed between them. “I promise.”

  Julia took one more deep drag of the joint and held the smoke in her lungs for a few seconds. She blew out, watching the cloudy whiteness dissipate into the air, and then she told Erica everything.

  Chapter 14

  WHAT HAVE YOU DONE?!

  Tears welled up in Ross’s eyes as he frantically ran up the stairs toward Julia’s apartment. He was overtaken by fear, mixed with anger, as he swung the door open, barged inside, and started yelling at her. “I can’t believe what you’ve done!” he shrieked, jolting the door closed behind him. “I’m done!”

  “What are you talking about?” Julia stammered, looking up from her laptop, shocked by the abrupt intrusion and then even more astonished by the very visible look of terror on Ross’s face.

  “You betrayed my trust!” Ross screamed as he wiped tears from his eyes. “I can’t believe you told someone.” Panic grabbed and shook him as he tried to figure out what to do. In his entire life he had never been this angry. Never this afraid.

  In that moment Julia knew exactly what had happened, though it would be another few minutes before she knew exactly how it had happened. It dawned on her very quickly that this had to have something to do with Erica. But how did Ross know about it now? And why was he so frightened? Julia played the events of the past few weeks over in her mind as Ross stood in front of her seething.

  After Julia had returned from New York City in the early fall, she had decided to break up with Ross, telling him that if he wanted to continue running his site, he would have to do it elsewhere; she wouldn’t allow it in her apartment any longer. He had chosen to do just that and rented his own place across town in Austin.

  Though resentment had driven them apart, love (and sex) kept them in each other’s lives and they continued to date sporadically.

  Soon after Ross moved out, Julia had convinced her friend Erica to move from New York City to Austin, renting the spare bedroom in Julia’s studio. Everything was moving along just fine until one evening, while partying, Erica had a bad acid trip from drugs purchased on the Silk Road and ended up in the hospital. When she returned, a fight erupted between her and Julia. Ross, who just happened to be there, tried to break up the brawl. This only exacerbated Erica’s and Julia’s tempers, and the fight grew so raucous that the police were called. Ross, who at first was trying to be helpful, soon lost his patience and pushed Erica out of the apartment. As Erica left in a taxi to the airport to return to New York City, Ross and Julia assumed that was the end of it. Good riddance, Erica; thanks for the story we’ll get to tell our friends tomorrow.

  But the next morning, when Ross went back to his apartment, he opened his beloved laptop, and checked the stats on the Silk Road before navigating to his social media accounts. There, in all its terrifying glory, was a new message from Erica posted on his Facebook wall, publicly, for all to see. “I’m sure the authorities would like to know about Ross Ulbricht’s drug website,” she had written, like a giant neon billboard on the Internet.

  The earth could have swallowed Ross whole. He began crying. He quickly deleted the message. Hands quivering, heart thumping, he picked up the phone and called Erica.

  “Please, I am so sorry,” Ross stammered on the phone, tears streaming down his face. “Please promise me you will never tell anyone about the site.” Hearing Ross cry, sounding like he was going to kill himself, Erica assured him that she wouldn’t say anything to anyone and hung up.

  But Ross’s mind swirled in a hurricane of thoughts. Who else knew?

  Fudge!

  There was only one person who could answer these questions. Ross got into his truck, floored it to Julia’s house, and then stormed up the stairs.

  “You betrayed my trust!” he yelled. “Who else did you tell?”

  “No one, I swear,” Julia pleaded as rivulets of tears rolled down her cheeks. “I can’t believe I told her. I’m so, so sorry. It was so stupid. It just came out of my mouth, I didn’t mean to—”

  Ross grew angry. “You’re a liar. I can’t trust you.”

  Hearing his accusations, Julia became defiant. “You left me alone in all of this. You told me all of this stuff and didn’t think about the risk to me.”

  “This is a huge breach to my security,” Ross replied, “because someone actually knows me and knows my face and knows I made the site.”

  Ross was remorseless and stern. Julia had broken his trust, and to Ross, that was much worse than any situation he had ever placed her in. Having simply uttered his name to someone else, having shared his most guarded secret in the world, she was done. Julia looked into his eyes, sensing that her explanation had only pissed him off more.

  “Maybe this is a sign that you shouldn’t even be doing this site anyway,” Julia whimpered as she fell to the floor in tears, pleading for his forgiveness.

  “No, it’s . . . not,” Ross stammered as he tried to calculate what he was going to do. “It means I’m going to have to hide. I’m going to have to leave Austin. All because of you.”

  “I’m sorry, I’m—” Julia said, sobbing. But it was too late.

  “This is over,” Ross said. He turned and walked out of the studio, the door slamming shut behind him.

  Chapter 15

  JARED AND THE FIFTY-TON FLAMINGO

  Chicago’s Federal Plaza appeared dark and morose against the late-November sky—except for two specks of color that punctured the gloominess. There was the red-white-and-blue American flag, rattling voraciously in the wind. And the massive bright red sculpture, called the Flamingo, that stood motionless in the center of the plaza’s black pavement.

  That fifty-ton Flamingo, with its abstract steel arches, was the first thing many people saw as they exited the L train onto the plaza, with most wandering past or below it as they headed into one of the adjacent federal buildings, including the post office, the courthouse, or the most intimidating of all, the thirty-story black tower at 219 South Dearborn Street known as the Dirksen Federal Building.

  On a late-November morning in 2011, two men with the last name Der-Yeghiayan were inside the Dirksen Federal Building. On the nineteenth floor, fifty-nine-year-old Samuel Der-Yeghiayan adjusted his robes and court documents as he prepared for the cases he would hear later that day as a U.S. federal judge. Sixteen floors below Samuel’s chambers his thirty-one-year-old son, Jared, was walking through the halls of the U.S. Attorney’s Office, his giant backpack over his shoulder, which was bulging with laptops, a Rubik’s Cube, and folders with pictures of evidence inside. In his hands he carried a large white mail-room tub filled with thirty or so envelopes of all shapes and sizes.

  Young Jared Der-Yeghiayan’s nerves were frayed as he made his way toward what would be the most important meeting of his career. It wasn’t lost on him that if he screwed this up, the story of his fuckup would make its way up all those flights of stairs to his father’s office.

  Jared had traded the baggy street clothes he wore at O’Hare for an oversize black suit and a crisp white shirt. His group supervisor from HSI followed behind at a leisurely pace. The two men arrived at the office of the assistant U.S. attorney for narcotics, who oversaw all prosecutions of drug-related cases in the state of Illinois.

  After a few introductions Jared dropped the mail tub in his hands onto the office floor with a thud. The attorney looked down at the container, then back at Jared, noticeably confused. This wasn’t exactly what the attorney had expected to see when he agreed to this meeting about drug smuggling through the Internet. A picture of a couple of big bricks of heroin? Sure. Some salty
white kilos of cocaine? Yeah. Pounds of marijuana? You betcha. But a box of empty envelopes in a mail carton? Not so much. Still, the attorney sat back to see what this was all about.

  Jared began explaining what the Silk Road was and how it worked, and as he did, he placed envelopes from the mail tub on the table one by one, as if he were dealing a deck of cards at a casino. “This one,” Jared said as he pointed to one of the envelopes, “had LSD inside.” He reached down and grabbed another package. “This one had amphetamines.” And then another. “This one had cocaine.” “Ketamine.” “Heroin.” He then pulled a white square envelope with a Chicago address from the tub. “And this,” he said as he rummaged in his backpack for the Silk Road case file, laying a picture on the desk of what appeared to be a tiny pink pill, “had this hit of MDMA inside.”

  Since June, when Jared had discovered that first pill of ecstasy in the envelope from the Netherlands, he had been trying to figure out how to persuade his supervisor, and now the U.S. Attorney’s Office, to let him build a case against the Silk Road Web site.

  Everything over the past few months had been leading up to this very moment.

  After his supervisor at HSI had given him the go-ahead to start investigating the site as a side project, Jared had obsessively started collecting every smidgen of evidence coming through Chicago O’Hare. Each night he would drive his ancient government-issued car (which other agents had nicknamed the Pervert Car because it looked like it belonged to a child molester) to the mail center at the airport where he would collect envelopes of drugs that had been plucked from the scrubs earlier that day.

  “I need you to seize and store every single envelope,” Jared had said to Mike, the customs officer who found the first pink pill.

  “What do you want it for?” Mike had asked, perplexed by the request. “No one ever wants these small packages of drugs.”