American Kingpin

by Nick Bilton

  And then there was the biggest new development between the two friends and associates: it seemed that VJ wanted more ownership too. Maybe this was why he had been so nice all along? Maybe when he had come up with the brilliant plan to rename the creator of the site the Dread Pirate Roberts, it was Variety Jones’s hope that one day he would become the next pirate to captain the ship.

  Their recent debates had come to a head when VJ wrote, “I think we need to formalize . . .” To create an official partnership between the two men . . . “If only to avoid confrontation in the future.”

  Ross was caught off guard by the question, and another debate ensued.

  “Here’s the thing,” VJ wrote. “I do well two ways.” Option one: “50/50.” Option two: “Me having it all.”

  What the heck was Variety Jones talking about?! Ross wasn’t giving up control of his site. Here was the only person Ross could trust in this online world, who had given him endless advice, and was now giving ultimatums.

  “Well, you can’t have it all now can you?” DPR wrote. “You could compete with me and maybe you’d win, but . . .”

  VJ could tell the conversation was getting contentious quickly, so he quelled the argument. “Naw, let’s not go down that road. I’m not gonna do that, ever, I promise. But, I do know what I bring to the table, and it’s a shitload.”

  “I know you do.”

  “Dude, I want equality,” Jones wrote. “I don’t do second fiddle very well.”

  But Ross had no interest in parity. In the current version of the site, it was Ross’s world, and he got to decide what went and what didn’t. He dictated who got a raise and who didn’t. People who worked hard were rewarded, as he had recently done with some focused employees, giving some of them an extra few hundred dollars in Bitcoin when they excelled. When Ross wanted to reward Smedley, the chief programmer, he did it on his terms. “You’ve really stepped up to the plate here already. Your base pay is still $900 of course, but I’ll throw [in] a bonus.” And when Inigo, another lieutenant, needed help finishing a renovation project on his house, Dread gave him an extra $500 to pass along to his handyman. Those kinds of decisions were up to Ross the Boss to decide, not VJ.

  What would have happened if he had to run these things past his lieutenant? No, thank you. Plus, how would Ross exert power and control on the site? He was already having a difficult time getting people to show up to work on time, or fill out the correct reports that he wanted to see at the end of their shift. He even enjoyed disciplining employees, telling them (still in Ross’s hokey banter) that they had “fudged up” when they needed a good scolding.

  Ross had worked too hard to simply hand anything to anyone. And shortly after this conversation with VJ, Ross simply stopped talking to him for a few days. Instead he retreated into the real world. Into San Francisco.

  As Ross stood up from the grassy knoll at Alamo Square and reached for his brown laptop bag to head back to his apartment, there was no question about it: This was the place he was supposed to be. This was the city where Ross would make the Silk Road into the greatest start-up the world had ever seen. And yet, as he walked back along Sacramento Street, past those beautiful painted lady Victorian homes and the modern glass skyscrapers, Ross didn’t know that he would soon face challenges that no other start-up in the city would have to deal with. That in a matter of months he would find himself dealing with dirty cops and rogue employees, and Ross Ulbricht would have to decide if he wanted to have people tortured and killed in order to protect his growing enterprise.

  Chapter 34

  CHRIS IN THE PIT

  It had been a few months since the FBI had taken down the LulzSec hackers, and the hangovers from the subsequent celebrations at the Whiskey Tavern had since worn off. Yet there was one aspect of that case that Chris Tarbell couldn’t get out of his mind.

  He was sitting in an area known as “the Pit” at the New York FBI offices, talking with other FBI agents—Ilhwan Yum and Thom Kiernan—weighing if the cybercrimes division of the FBI should get involved in the Silk Road case or go after a different target instead.

  The Pit, where they sat, looked like a sunken living room and was big enough for a handful of desks and chairs. This enclave had been around for decades and was considered the top spot in the New York City headquarters. Years earlier, before Tarbell and the nerdy computer agents started occupying the desks there, the Pit was home to organized-crime agents. Back then they went after mobsters who stayed as far away from technology as possible, fearing that something as inconsequential as a pay phone could be used to track their location. Now the men in the Pit went after mobsters who had adopted technology as a way to hide their whereabouts.

  But the old guys and the new did share one thing in common: both generations of FBI agents were practical jokers. Some days Tarbell and his colleagues would rub leftover deli meat on another agent’s desk phone earpiece, then call from another room to watch the agent smear roast beef and mayonnaise on his or her ear. Tarbell had once played a joke using another agent’s car, hooking the car’s horn up to its brake pedal so every time the agent tried to slow down on his drive home, his horn blared at the cars in front of him. And then Tarbell was always ready with a “would you rather” question.

  Tarbell’s desk was covered in papers and paraphernalia from previous cases. In the center of this mess were his three computers, the two classified machines that were used only for internal work and the one unclassified computer that couldn’t be traced back to the FBI, where on the screen the Silk Road Web site currently sat looking back at the agents.

  As they spoke about the site, Tarbell thought to himself that if they did go after the Silk Road, he was going to do everything he could to avoid the unthinkable mistake the Bureau had made in the recent LulzSec case.

  There were two main aspects of the LulzSec arrests the Feds needed to pull off for the takedown to work properly. First, it was imperative that they capture every suspect at the exact same time, even though they were all in different states and countries. They had to ensure that the hackers didn’t alert anyone else about their arrests, or the entire operation would fall apart. The FBI had pulled this part off seamlessly. But it was the second detail, which was equally important, where they had failed dismally: It was crucial to capture each suspect on his or her laptop with the computer open. If the hackers closed their computers and those computers were encrypted, the data inside would be locked away forever. Even with the fastest and most advanced FBI computers, it could take more than a thousand years to figure out the password of a properly encrypted machine.

  One of the most important LulzSec targets that the FBI planned to arrest was also allegedly the most dangerous member of the group. His name was Jeremy Hammond, and he was a political activist and computer hacker who had been arrested more than half a dozen times for protests against both Nazis and Republicans, for breaking into private servers around the world, and for releasing information to WikiLeaks.

  Fast-forward to the night of the LulzSec takedown. The plan was as follows: Tarbell would go to Ireland to oversee the arrest of one of the LulzSec team’s youngest hackers, a spritely nineteen-year-old. An FBI team in Chicago would be stationed, ready to pounce on Hammond. Senior agents in New York would watch live video feeds of the other arrests. Given Hammond’s ties to political advocacy groups, and his several previous arrests, there was a chance that the hideout he was in would also be full of other activists, some with violent records. So at the last minute a higher-up at the FBI decided to send in a fully armed SWAT team to get Hammond on his computer. It would be the first time the FBI would use a SWAT team to arrest someone on a laptop.

  It was early evening when the FBI trucks tore into the Bridgeport area of Chicago and a dozen men in bulletproof vests with machine guns descended on the single-story brick house where Hammond was hiding. The wooden front door flew off its hinges, and the agents stormed inside,
throwing a flashbang grenade into the kitchen on the left and then scurrying into the other rooms with weapons drawn, screaming, “FBI! FBI! FBI!” But in the few seconds it took the SWAT team to reach the rear of the house, where Hammond sat, the dreadlocked hacker had calmly pushed the lid of his laptop closed, and there he sat at his desk, his hands in the air and a locked computer in front of him. It was the equivalent of doing a massive drug bust and the suspect flushing the drugs down the toilet before the cops made it into the bathroom.

  While all the agents were upset about the laptop incident, Tarbell was particularly tormented by it. He didn’t make mistakes. Ever.

  And yet here he had.

  Thankfully, there was a silver lining to the Hammond incident. Maybe it was an accident, or possibly laziness, but for some reason Hammond had not encrypted his laptop properly, and the FBI forensics lab was eventually able to get inside using a special brute-force technology that tries every password imaginable until it guesses the correct one. It took the government’s supercomputer six months to figure out that Hammond’s password was “chewy12345.” But Tarbell knew that being able to crack the code was pure luck. Most, if not all, experienced hackers and people on the Dark Web encrypted their laptops with much stronger passwords for this very reason.

  Now as Tarbell sat there in the Pit talking to his coworkers about how they would approach this Silk Road case, he assured his team that if they did go after the Dread Pirate Roberts, they wouldn’t make the same mistake they had with Hammond; Tarbell would have a plan to ensure they captured DPR with his hands on the keyboard.

  Chapter 35

  BATTEN DOWN THE HATCHES!

  The argument between the Dread Pirate Roberts and Variety Jones didn’t last long. They needed each other and knew it. But it would mark a turning point in the relationship between the two men, where there was no question that DPR was now in charge. And Jones wasn’t going anywhere, as he had warned. He was making tens of thousands of dollars a month in salary from the site and needed that money whether he liked it or not. Ross needed VJ too. He was ready to take the next step in the life of his business. It was time to close ranks and bring some corporate order to his illegal drug empire.

  “I wanted to raise a topic we haven’t discussed before,” DPR wrote to Variety Jones.

  Ross knew VJ would be thrown off by the comment. While the two men had no idea what the other looked like, over the past year they had discussed almost everything imaginable, from the personal to the professional. They had shared their hopes, dreams, fears, and desires and counseled each other on every aspect of those worlds. The Dread Pirate Roberts had even trusted Variety Jones enough to tell him personal things about Ross Ulbricht, explaining that he had once been a physics student in college and about having his heart broken by his old girlfriend from Texas.

  So when Dread wanted to talk about something new, VJ was a bit taken aback. “Can’t imagine there is a topic we haven’t discussed before.”

  But there was one, and it might have been the most important topic of all. “Local Security,” DPR wrote.

  Ah, yes. That.

  Ross had been working for months to try to fix security vulnerabilities, both in his life and on the site. After many close calls, including instances of hackers attacking the servers, and constantly having to move to different coffee shops and cities to cover up his secrets, he was fully aware that he had to put together a plan to protect every single area of his life that made him vulnerable.

  He hadn’t been caught yet. If he was more careful going forward, Ross reasoned, he would never be caught. And given the amount of attention the site was receiving—being mentioned in hundreds of news articles a week all over the world—the people hunting him would only grow more desperate. Silk Road’s wares had expanded beyond drugs and guns to include synthetic drugs from China—among them, new forms of synthetic heroin, like fentanyl, which was up to one hundred times stronger than traditional morphine—not to mention a slew of explosives and other highly dangerous goods. So it was time to bolster his defenses and strengthen his security. He wasn’t going to take any chances.

  To begin, he put Variety Jones in charge of looking into any possibility that law enforcement, or LE, as they abbreviated it, might be lurking on the site. Next Ross got to work securing other vulnerable areas of his life, including his own laptop.

  First and foremost, he made sure his Samsung 700Z was properly encrypted. He had talked to VJ about this before, days after they read the news about someone being arrested for leaking information to WikiLeaks. The news reports about the bust noted that the man had used exactly the same password to log in to his computer and for his encryption software and that the FBI cracked it in no time at all.

  “What a macaroon,” VJ had written.

  “Weak,” Ross agreed.

  “If he had a good password, they’d have nothing,” VJ said, referring to the “Feebs,” the nickname they used for the FBI. He then added that the man who had been arrested was an “idiot” for not taking security more seriously.

  With this ominous lesson, Variety Jones offered some advice to DPR: You should set up your computer to automatically shut down if it hasn’t been used for a certain period of time. More important, you need to install a kill switch, where you can press a random key on your laptop that kills the machine instantly. This way, if the Feebs approach you in public, you press the key and your computer is locked forever.

  Dread replied that he would do just that.

  Now Ross had another question for VJ, asking if he should store his files in the cloud so his laptop was completely clear of anything related to the Silk Road. This way, if the man behind the mask were ever grabbed with his hands on the keyboard, there would be nothing that could link him to the site. “Would be nice,” DPR wrote, “to think that my laptop has nothing critical or incriminating on it.” After some back-and-forth on the pros and cons of each (the negative being that storing everything in the cloud would make working on the site painfully slow), Variety Jones suggested that Dread keep all his Silk Road files on his computer but that he encrypt them, so if his computer was grabbed by the Feebs, they would never be able to get inside.

  Great idea!

  “Ok, just needed to talk that through,” DPR said. “Thanks!”

  As another backup plan—the most-wanted man on the Internet could never have too many—Ross decided to partition the hard drive on his laptop into two different sections. (This was like cutting an earthworm in half so that it regenerated and became two new worms.) His computer essentially now became two computers with two different accounts, with one side of the machine strictly allocated to the Dread Pirate Roberts and used only for all things Silk Road. The other side of the computer was assigned to Ross and was where he would e-mail his friends and family, log in to Facebook, and flirt with girls on dating Web sites.

  This was when Ross created a very strict rule, perhaps the most important of all his new security enhancements. Anything that could be linked to Ross Ulbricht online (personal e-mails or social media) would never be done on the DPR side of the computer. On the flip side, anything that linked to the Dread Pirate Roberts (logging in to the Silk Road, chatting with VJ, uploading new code to the servers) would never happen on Ross’s side of the computer. This was imperative to ensure that the two identities did not leave a trail back to each other online.

  For the backup plan to the backup plan, Ross added booby traps that would activate in the highly unlikely event that someone did get into his laptop. One of the traps made the laptop go dark if someone snooped though his Web browser history more than half a dozen times.

  The next part of Ross’s security operation would require ensuring that the people who worked for him were all really vigilantes fighting to legalize drugs, and not employees of the DEA or the FBI. To do this, Ross started asking people who wanted a paycheck from the Silk Road to share a picture of their I
D—a driver’s license or passport, something that showed who they really were. It was a tough ask, Ross knew, but it was imperative if he didn’t want to end up in jail.

  Now when he hired someone new, he went through the customary conversation, explaining that they would have no choice but to divulge who they were to the Dread Pirate Roberts.

  “Do you need to see my id?” ChronicPain, a new employee, asked DPR as he prepared to join the site to help manage the user forums.

  “Yes,” DPR replied. (Without a doubt.)

  “Can I just tell you my name?”

  “I’ll need your id with current address,” Dread wrote; then, to put ChronicPain at ease, he noted that his ID “will be stored encrypted, and I will probably never need to decrypt.”

  “So,” the new employee said without much of a choice, “I guess I’ll just have to trust you on that.”

  “Yea.”

  Ross knew that most people would agree. Being part of the movement he was creating was more important to his employees than a slight risk. And sure enough, in a matter of hours the ID for ChronicPain arrived in DPR’s in-box.

  There was also another reason to get those IDs. Ross was giving his employees more responsibility, and some even had access to Bitcoins on the site. If someone decided to cross the Dread Pirate Roberts, he would need to know who they were and where they lived. There would be retribution for such actions.

  The final item on his security cleanup checklist was to create his own digital go bag that he would employ in case something catastrophic happened. If the cops knocked on his door, he needed a plan for what to do and where to go.