In early 2013, Der-Yeghiayan opened an investigation into Mark Karpeles, the owner of Mt. Gox, formerly the world’s largest Bitcoin exchange. In just over an hour of staccato cross-examination, Dratel’s strategy became clear: he was going to pursue a line of questioning suggesting that the man who really controlled Silk Road wasn’t his young client, but Mark Karpeles, the wealthy former owner of the Mt. Gox Bitcoin exchange. But another HSI office began investigating Karpeles, as well. Der-Yeghiayan, who was in Customs and Border Patrol before joining HSI. In May, the Baltimore-based HSI agents moved ahead with a seizure of some Mt. Gox assets, saying it was an unlicensed money exchange. He got a spreadsheet of transactions between money changing service Dwolla and Mt. Gox. Until it was shut down, the great majority of bitcoin trades went through his Mt. Gox currency exchange. He went to get the warrant mentioned earlier. Prosecutor Serrin Turner objected, saying Dratel was trying to get hearsay evidence. Government lawyer Serrin Turner finished up just before 11:30am. Their description of the “red-handed” arrest left defense lawyer Joshua Dratel with a serious conundrum: how do you convince a jury your client didn’t run a drug empire when his computer was taken while it was open to the management page?
Mark Karpeles had “intimate involvement with the site,” Ross Ulbricht’s lawyer claims. If Karpeles could use Silk Road, a free-wheeling drug market, to jack up the price of bitcoin, he could become incredibly rich. NEW YORK-After the lunch break Thursday in the Silk Road trial, defendant Ross Ulbricht took off his jacket. Other Silk Road users, none of them knew that cirrus was law enforcement? Dratel: They didn’t know you were law enforcement. Dratel. Did they know more about DPR? Karpeles has denied having anything to do with Silk Road and says he didn’t even know of Ulbricht until he was arrested in October 2013. “I am not Dread Pirate Roberts,” he said to Ars via e-mail. Der-Yeghiayan: I may have, if it’s in an e-mail. Special Agent Der-Yeghiayan wrote in an e-mail to colleagues. The agent acknowledged they were. He smiled, and shared a few laughs with Dratel’s younger associate lawyer. Minutes later, his lawyer Joshua Dratel took off the gloves. Earlier in his cross-examination, Dratel turned that around. Dratel said. He told the judge some of the evidence he wanted to bring in.
Dratel then stated his thesis more clearly. By the day’s end, Ulbricht seemed more relaxed. Ulbricht was arrested in a public library, with his computer open to the “staff chat” page-the exact same chat dialogue that Der-Yeghiayan had open in a cafe next door. With that, Der-Yeghiayan’s cohorts in the San Francisco public library snapped into action. In the middle of the year, Der-Yeghiayan’s investigation was heating up. On a crumpled-up piece of paper in his trash, they found two crumpled-up notes that made their way to a jury today. They found Ulbricht’s room and searched it, grabbing his passport and driver’s license. After the arrest, agents rushed to Ulbricht’s house and put their search warrant into action. In 2013, he had filled out papers asking a judge for a warrant to further investigate Karpeles. Ars has published Karpeles’ full response. Use of and/or registration on any portion of this site constitutes acceptance of our User Agreement (updated 1/1/20) and Privacy Policy and Cookie Statement (updated 1/1/20) and Ars Technica Addendum (effective 8/21/2018). Ars may earn compensation on sales from links on this site.
Read our affiliate link policy. One page read “account,” with just over 50,577 bitcoins in it-several million dollars. She dismissed the jury for the afternoon, reminding them not to talk or read about the case. It was over by 4:00pm, and the jury was dismissed for a long weekend. Dratel: You had over a dozen accounts. Dratel: You were communicating with other admins? And the other admins? His long weekend will be spent in jail, where he has been for more than a year. The judge said she’d taken written papers over the weekend to consider both sides. They got his e-mail, then walked over to Ulbricht. Today the jury saw what Ulbricht was browsing. Soon, the jury was out of the room. The jury filed out. It was a currency he had more invested in than anyone else. More importantly, they took his laptop, before he could close it. The questioning took the government, and US District Judge Katherine Forrest, by surprise. Judge Forrest with a smile. The government says he’s the one who ran the Silk Road marketplace on the hidden Tor network.
