A man accused by federal authorities today of operating an online drug bazaar called Silk Road 2.0 allegedly did so as he worked briefly at Elon Musk's SpaceX rocket and spacecraft concern in Hawthorne.
SpaceX communications director John Taylor says 26-year-old Blake Benthall was employed at the company from Dec. 9 to Feb. 21. A Facebook page for a Houston-bred man with the same name as the suspect says he was a software engineer at the South Bay company.
The U.S. Attorney's Office in New York today announced that Benthall was arrested yesterday in San Francisco and was scheduled to appear in federal court there today.
The gist of the case is that Benthall allegedly took the reins of a Tor-software-based online drug bazaar called Silk Road 2.0 on Dec. 28, according to a statement from the U.S. Attorney's Office in New York.
Users could remain anonymous in order to buy and sell drugs, authorities said. Version 2.0 cropped up soon after the first Silk Road was busted and soon after arrests connected to that original marketplace were made, feds stated:
When Silk Road 2.0 was launched, it was controlled for a short time by a co-conspirator using the same online moniker as that allegedly used by Ross Ulbricht in operating the original Silk Road website – "Dread Pirate Roberts."
Prosecutors allege that Benthall then "controlled" the whole operation, including "the massive profits generated from the operation of the illegal business." They say he used the moniker Defcon and orchestrated five percent commissions on deals.
The resurrected network offered "free vendor accounts" to drug dealers, ostensibly to get them back to the marketplace, it was alleged.
Silk Road 2.0 was doing $8 million a month in revenue and had 150,000 users before its demise in October, authorities alleged. Users on the site peddled cocaine, heroin, fraudulent passports, fake IDs and computer hacking services, feds alleged.
They say it was all worth about $400,000 a month in commission.
At one point Silk Road 2.0 was shut down after a theft of about $1.4 million worth of Bitcoin currency was reported by the user Defcon, according to the U.S. Attorney's criminal complaint.
Undercover U.S. Drug Enforcement Administration agents based in New York made undercover buys of LSD, oxycodone and other drugs that were shipped to them, they said.
They accuse Benthall of laundering Silk Road income and buying, among other things, a car made by Elon Musk's Tesla Motors. He allegedly put a $70,000 down payment on a $127,000 Model S by using Bitcoin.
Whoever was behind Silk Road 2.0 taunted federal authorities, too, they said.
When the original Silk Road was busted, feds erected a digital banner at its online address. It said, "THIS HIDDEN SITE HAS BEEN SEIZED." When Silk Road 2.0 appeared exactly one year year ago (yes, on November 6, 2013), a banner read, "THIS HIDDEN SITE HAS RISEN AGAIN."
Which makes this prosecution seem all the more personal.
Benthall was allegedly so brazen that he once reportedly retweeted a Tweet about the resurrection of Silk Road last year.
A Twitter account under the name of the suspect, whom some are calling the ultimate brogrammer, says he's a "rocket scientist" and "Bitcoin dreamer."
Feds say they put Benthall under surveillance and were tracking his every move. They allege that when he was on the move, Defcon became inactive online.
Despite the suspect's allegedly smug demeanor during all this, investigators said in today's statement that they eventually got deep into his operation and communicated with him directly:
During the Government’s investigation, which was conducted jointly by the FBI and HSI, an HSI agent acting in an undercover capacity (the “HSI-UC”) successfully infiltrated the support staff involved in the administration of the Silk Road 2.0 website, and was given access to private, restricted areas of the site reserved for BENTHALL and his administrative staff. By doing so, the HSI-UC was able to interact directly with BENTHALL throughout his operation of the website.
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Manhattan U.S. Attorney Preet Bharara indicated that, no matter how clever programmers think they are, "we will return as many times as necessary to shut down noxious online criminal bazaars. We don’t get tired."
Here's the U.S. Attorney's rundown of Benthall's charges:
BENTHALL, 26, of San Francisco, California, is charged with one count of conspiring to commit narcotics trafficking, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years in prison; one count of conspiring to commit computer hacking, which carries a maximum sentence of five years in prison; one count of conspiring to traffic in fraudulent identification documents, which carries a maximum sentence of 15 years in prison; and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.