Silk Road Sellers Around The Globe Getting Arrested

from the as-expected dept

This is hardly a huge surprise, but following last week's arrest of the alleged mastermind behind the hidden online market Silk Road, law enforcement agents across the globe have been arresting various Silk Road users (mainly drug dealers). As summarized by Gawker:

• In Seattle, the FBI arrested 40-year-old Steven Lloyd Sadler in the Seattle suburb of Bellevue. Under the name Nod, Sadler was allegedly one of the Silk Road's favorite dealers of cocaine, heroin and meth. Sadler was busted after one of his customers in Alaska was busted and started cooperating, according to Brian Krebs.
• In the UK, authorities arrested three men in their 20s and one man in his 50s on drug offenses related to the Silk Road. "More arrests are expected in the coming weeks," according to the BBC.
• In Sweden, two Helsingborg men were arrested for allegedly selling cannabis on the Silk Road.

And, of course, many more are expected as well. It's clear from the legal filings (and just generally what you'd expect) that law enforcement has been investigating Silk Road since at least early 2012. You had to expect that it would also be going after those who used the platform to break the law. In fact, in many ways, it seems much more reasonable to be going after those who broke the law using the platform than the creator of the platform itself (though, it also appears that he may have committed other crimes as well).

Either way, expect many more such arrests, though it's doubtful that this will slow down such hidden markets. In fact, I wonder if the publicity around the Silk Road crackdowns will actually end up attracting even greater interest in this arena -- in part from more organized crime operations that can more effectively hide their actions.

Filed Under: arrests, dark markets, drug dealing
Companies: silk road

The Unintended Consequences Of The Shutdown Of Silk Road

from the yes,-it's-gone,-but-now-what dept

The closing down of Silk Road by the feds was almost certainly inevitable. In fact, especially in light of the details suggesting how sloppy Ross Ulbricht was at times, it's somewhat amazing it lasted as long as it did. That said, in the past few days I've seen a couple of articles that are highlighting the unintended consequences of the closure. First up is Conor Friedersdorf over at The Atlantic, discussing how the closure of Silk Road almost certainly makes the world less safe. In some ways, this reminds me of similar discussions about targeting marketplaces vs. targeting users (such as Craigslist). While many people have a gut reaction that it makes sense to go after the marketplace/platform, the reality is that it's the users that drive it, and those users will continue to do the same illegal acts as before, but most likely in a less safe manner.

Friedersdorf highlights how, assuming everything in the NY complaint is accurate, Silk Road functioned as a fairly safe and efficient market for buying what generally appeared to be high quality illegal drugs for personal use in a much safer and more trusted manner than going out on the street to do the same. And, on top of that, it appears that many of the sellers were from overseas where the drug trade might be even more dangerous:

On many thousands of occasions, drug dealers in foreign countries decided that, rather than using armed truck drivers, bribed customs agents, desperate drug mules, thuggish regional distributors, and street level drug dealers who used guns to defend their territory, they’d just mail drugs directly to their far away customers. Of course, folks at the beginning of the supply chain were still often violent drug cartels who one hates to see profit. But from the perspective of the many innocents who suffer from the black market supply chains involved in traditional drug sales, narcotics via mail order would seem to be a vast improvement.

The FBI summed up its case against The Silk Road by writing that “the site has sought to make conducting illegal transactions on the Internet as easy and frictionless as shopping online at mainstream e-commerce websites.” Insofar as it trafficked in violence-for-hire and hacked bank accounts, that was a bad thing — society has an interest in as much friction as possible in the market for hit men! But compared to the epidemic violence that has characterized the drug trade for the entirety of the War on Drugs, and that shows no signs of abating in the foreseeable future, a frictionless drug trade starts to seem like a relative utopia.

The “friction” is often dead teenagers on urban streets.

Of course you could make an argument that Friedersdorf's argument is almost as much a condemnation of the overall War on Drugs as it is on Silk Road itself. In fact, you could argue that the "success" of Silk Road highlights how a legal and regulated market for such drugs would likely be quite efficient and safe. That's not a "defense" of Silk Road or a suggestion that what Ulbricht did was morally correct. However, it's just a statement of reality. The War on Drugs has a very large number of victims, and many of them are totally unrelated to drug addicts, but rather come with the infrastructure necessary to run a massive illegal business.

That brings us to the second article. Someone who worked for a competing online black market called Atlantis, which had closed just a few weeks earlier, has written up a fascinating post mortem of Silk Road, in which he (or she) notes that we're about to see a lot of similar black markets now that the market leader has been cleared out by the feds.

As if there wasn’t enough suitors ready to rise to the challenge of being the next DPR, to make it easier there is already a functioning open-source project know as BitWasp which can simply be downloaded and installed on an onion web server and the next SilkRoad is (almost) ready to go. Below is a short description of the project from its facebook page where they make no secret of the fact the project aims to aid the development of future anonymous marketplaces flowing in the case of busts like just happened Silk Road.

“BitWasp Marketplace is a light weight, completely open source, anonymous bitcoin marketplace specifically built for use in conjunction with Tor or I2P via the hidden services such as .onion websites and eepsites (for I2P).

The goal of this project is to do the following:

1. Lower the barrier of entry and needed skill-set to operate a website like silkroad. This will increase the number of silkroad styled sites on the internet, and this increase will lead to a stronger pressure on governments to change their draconian drug law policies into something more practical and respecting of individual liberty.

Just like open source forum software revolutionized the ability for individuals to freely share ideas within niche communities, Bitwasp will revolutionize the ability for individuals to sell and buy materials and digital files within online communities.

2. Plans by the many, not by the few. This is essential because, as with nature, competition will select for the best, most secure, and most revolutionary marketplaces. Silkroad is great; but I suspect many minds working on many sites with various add-ons and extensions will lead to many better marketplaces in the long run.”

In other words, just like the court shutting down Napster over a decade ago resulted in a whole series of alternative file sharing networks, some that were much more underground and harder to stop, it seems likely that something similar is about to happen with black markets. In fact, the former Atlantis employee notes that the combination of Ulbricht's carelessness and the fact that it took nearly two and a half years to track him down likely means that others will rush into the space, believing they can do it "right" to protect themselves.

The closing of Silk Road and the arrest of Ulbricht is an interesting story, no doubt, but it seems like just the very first chapter in the world of black markets.

Filed Under: copycats, drug dealing, safety, security, shutdown
Companies: silk road

Dumb Criminals College Edition: Frat Sells Drugs, Posts Pics Of Girls On Facebook

from the frat's-not-ok dept

When we typically do posts about dumb criminals intersecting with the internet, we’re strangely usually talking about adults. Sure, you get people stupidly thinking Twitter is a go-to source for finding drugs, but those people are working professionals (or at least, were). Additionally, that guy who thought the computer he yoinked from a church would be the perfect machine on which to watch porn? Adult.

But this story is different, because it involves students at a higher education institution, namely Florida International University, where a fraternity apparently thought that combining the drugs and nudity angle of previous stories on their Facebook page was a good idea.

Florida International University announced today it was suspending its Pi Kappa Alpha fraternity over Facebook posts apparently showing rampant drug dealing by frat brothers on campus. The posts, obtained by Riptide, also show evidence of hazing, cheating on exams, and creep shots of naked women shared among the "Pike" frat brothers.

Now, I know fraternities have a reputation for being stupid, and my time in college did nothing to assuage me of that impression, but this goes to a level beyond dumb. Drug crimes for weed are one thing, but the type of stuff you get from the pharmaceutical companies is a whole different ballgame, as is dealing freaking cocaine. To think that it wouldn’t come back to bite your ass if you put up offers to sell these narcotics on the internet, under your own name, suggests to me both that you are painfully stupid and that FIU needs to take a serious look at their admissions department to ensure they aren’t customers of these idiots. Anyone dumb enough to do that certainly isn’t passing their Geology courses on the up and up.

Beyond that, posting pictures of nude girls? Now you’re entering a whole different territory, one that will be met with near universal condemnation for being not only misogynist assclowns, but opening the door to issues of underage girls or girls who didn’t consent to be photographed in the buff. Hell, even their fellow fraternities think they’re idiots.

"This is troubling for a number of reasons," said one veteran member of the FIU Greek community who asked to remain anonymous. "They were apparently actively selling drugs to the Greek community and their own members. They were not even discreet about what they were doing. In fact, they refer to it on several occasions within the post as the 'pike pharmacy.'"

I’m guessing these Pike pharmacists might need to get their information in order to apply to their hometown community college soon, assuming they don’t end up in jail.

Filed Under: drug dealing, dumb criminals, fraternities, social media

Court: If Violating Your Privacy Helps The Police, It's Not Violating Your Privacy

from the say-what-now? dept

In a horrifyingly bad ruling, the 6th Circuit appeals court has said that the owner of a prepaid phone has no 4th Amendment rights in protecting his location info from law enforcement. There have been a number of cases touching on this subject, with a few different rulings back and forth, including more than a few in the federal courts that argue tracking someone's location isn't a 4th Amendment violation. But, even if you grant that, this particular ruling is egregiously bad and poorly argued. The EFF highlights some of the more brain-numbing aspects of the ruling:

In what can only be described as a results-oriented opinion, the court found Skinner had no reasonable expectation of privacy in the cell phone location data because "if a tool used to transport contraband gives off a signal that can be tracked for location, certainly the police can track the signal." Otherwise, "technology would help criminals but not the police." In other words, because cell phones can be used to commit crimes, there can't be any Fourth Amendment privacy rights in them. If this sounds like an over-simplistic description of the legal reasoning in an opinion we disagree with, the sad reality is that the court's conclusion really did boil down to this shallow understanding of the law.

Yes, you read that right. Basically, if you've broken the law, according to the court, you have no 4th Amendment rights. And, then it goes further, by basically noting, because anyone might be a criminal, we might as well remove all of their 4th Amendment rights as well, because doing so might help the police. Of course, this goes against the very basis of the 4th Amendment.

The story involves police tracking a guy accused of being a drug runner, via the GPS in his pre-paid phone, without getting a warrant. The guy, Melvin Skinner, pointed out that this violated his 4th Amendment rights, but, as noted above, the court disagreed.

Julian Sanchez walks through the many ways the court got some rather basic things wrong in their ruling:

The court proceeds through a series of lazy and underdeveloped analogies:

Otherwise dogs could not be used to track a fugitive if the fugitive did not know that the dog hounds had his scent. A getaway car could not be identified and followed based on the license plate number if the driver reasonably thought he had gotten away unseen. The recent number of cell phone technology does not change this. If it did, then technology would help criminals but not the police. It follows that Skinner had no expectation of privacy in the context of this case, just as the driver of a getaway car has no expectation of privacy in the particular combination of colors of the car’s paint.

But it does not follow at all. “What a person knowingly exposes to the public, even in his own home or office, is not a subject of Fourth Amendment protection,” the Supreme Court explained in the seminal case of Katz v. United States, “But what he seeks to preserve as private, even in an area accessible to the public, may be constitutionally protected.” Any member of the public can buy a dog and follow a scent. Any member of the public can view and copy down a license plate number. Any member of the public can view the external paint job of a car. But any member of the public cannot just track the GPS signal of a random cell phone—and if they could, most of us would be extremely wary about carrying cell phones. Unlike all these other examples, GPS tracking as employed here depends crucially on the ability of police to invoke state authority—a seemingly salient distinction the court fails to take any note of.

That's not all. The court seems equally confused about other cases, and both the EFF and Sanchez's link above details other mistakes concerning other case law. This isn't just a case of people having different interpretations. This seems like a clear case of a court not really bothering much with the details or the case law and just seeing one thing: this guy was a criminal and the GPS info was useful in finding him, therefore it must be okay. This is a very troubling precedent to have on the books no matter how you look at it.

And it will impact many Americans. While the focus in the ruling is on the "but he's a criminal!!!!" aspect, it applies across the board to pre-paid mobile phone users (well, at least those covered by the 6th Circuit). And that's about a quarter of mobile phone subscriptions. As the EFF put it, in an effort to make sure criminals get no privacy location privacy rights, the court has killed such rights for everyone else as well -- which is exactly the opposite of how our system is supposed to work.

Filed Under: criminal, drug dealing, gps, prepaid, privacy