US investigated MtGox CEO as possible Silk Road mastermind

Discussion in 'The Bar' started by dawg, Jan 16, 2015.

  1. dawg

    dawg In The Dog House Staff Member

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    An agent at the trial of accused operator Ross Ulbricht said there was probable cause to believe Mark Karpelès controlled the website

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    A US agent investigating Silk Road has told jurors at a trial of accused operator Ross Ulbricht that he believed in 2013 that the former chief of the MtGox bitcoin exchange, Mark Karpelès, may have been the mastermind behind the black market website.

    Questioning of Jared Der-Yeghiayan, a US Department of Homeland Security special agent, showed Ulbricht’s defense was seeking to cast doubts over the allegation that Ulbricht was Silk Road’s operator, who is known as “Dread Pirate Roberts”.

    Ulbricht’s lawyer Joshua Dratel pointed to Karpelès, who was CEO of MtGox. The company filed for bankruptcy a year ago after saying it lost nearly half a billion dollars worth of virtual coins.

    “Our position is he set up Mr Ulbricht,” Dratel said outside jurors’ presence.
    Karpelès, who was never charged, denied he had anything to do with Silk Road.

    “This is probably going to be disappointing for you, but I am not and have never been Dread Pirate Roberts,” he said in an email sent to Reuters and other media. “The investigation reached that conclusion already – this is why I am not the one sitting during the Silk Road trial, and I can only feel defense attorney Joshua Dratel trying everything he can to point the attention away from his client.”

    Dratel, in opening statements on Tuesday, said that while Ulbricht created Silk Road, he handed it off to others and became their “fall guy”.

    Der-Yeghiayan testified on Thursday in Manhattan federal court that as late as August 2013 he believed that Karpelès actually controlled the website, where drugs and illicit goods could be bought anonymously.

    Under questioning by Ulbricht’s lawyer, Der-Yeghiayan said that as part of a search warrant for Karpelès’ Google email account he had said there was probable cause to believe he controlled Silk Road.

    It was not clear from the trial how Der-Yeghiayan’s views had since changed. He testified on Wednesday that an Internal Revenue Service agent had flagged Ulbricht that September as Dread Pirate Roberts’ possible alter ego.

    Silk Road, which took payment in bitcoin, operated from 2011 to October 2013, generating $200m in drug sales, prosecutors say. Ulbricht, 30, faces seven counts including operating a continuing criminal enterprise and conspiracy to commit narcotics trafficking.

    The investigation of Karpelès was separate from the events leading to the hacking attack on Tokyo-based MtGox last year that led to its filing for bankruptcy.

    Der-Yeghiayan said that at the time he was investigating Karpelès, investigators theorised Silk Road was operated in part to drive bitcoin prices up.

    The August 2013 search warrant followed earlier grand jury subpoenas and another search warrant that Der-Yeghiayan said were issued targeting companies linked to Karpelès as part of the Silk Road probe. But in July 2013, Der-Yeghiayan, who worked in Chicago, testified that over his objections, federal prosecutors in Baltimore met with Karpelès as part of an investigation over unlicensed money transfers.

    Exact details of the meeting were unclear and are expected to be part of Der-Yeghiayan’s testimony when trial resumes Tuesday. Dratel sought to elicit testimony that Karpelès had offered to “tell the government who he thought runs Silk Road” to avoid charges.

    The case is US v Ulbricht, US district court, Southern District of New York, No. 13-06919.

    The trial continues.

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  2. garypagetwo

    garypagetwo Adios, farewell, goodbye. Gold

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    buttcoin
     
  3. Butcher

    Butcher ?

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    I'm not following any of this, Robin
     
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  4. dawg

    dawg In The Dog House Staff Member

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  5. Butcher

    Butcher ?

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    Come again?
     
  6. dawg

    dawg In The Dog House Staff Member

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    :secret: You ever hear of the black market?
     
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  7. Butcher

    Butcher ?

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    THAT I've heard of
     
  8. dawg

    dawg In The Dog House Staff Member

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    Well, turns out it exists online also. With a currency known as bitcoin as the main currency of choice. Really the only currency used.
     
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  9. Pussy Tendon

    Pussy Tendon Wet! CUNT!!!!! Gold

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    Black markets matter!
     
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  10. dawg

    dawg In The Dog House Staff Member

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    It's a whole thing, you don't want to know.
     
  11. Butcher

    Butcher ?

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    So...bitcoins are a currency that really don't exist?
     
  12. dawg

    dawg In The Dog House Staff Member

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    :wtf:
     
  13. dawg

    dawg In The Dog House Staff Member

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    Oops, this was meant for the bar this morning. Dave loves this story.

    @Schmoopy
     
  14. DrivenByDemons

    DrivenByDemons Spinoff Jesus Gold

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    Saw this yesterday. Good defense. They had the FBI dude all frazzled.
     
  15. Rum Balls

    Rum Balls Well-Known Member

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    Who did what now?
     
  16. DarkFriday

    DarkFriday Fired as a MOD...Twice. Gold

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  17. baltimore mike

    baltimore mike Well-Known Member POTY The Bar

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    Fucking Dawg :jj:
     
  18. BrulesRules

    BrulesRules Just grab 'em in the biscuits VIP

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    Does the local arcade take bitcoins?
     
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  19. XuXu

    XuXu Well-Known Member Banned User

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    The deep web's very existence scares the shit out of me.
     
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  20. Napoleon V

    Napoleon V Swagggggg. ! !!!!!!!! !!!!! Banned User

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    Mt. gox was a ponzi scheme. Didn't they lose billions of dollars in bitcoin?