Accused Silk Road Mastermind's Friend Testifies Against Him

Jurors in the federal trial of alleged Silk Road mastermind Ross Ulbricht heard testimony Thursday from a friend who said he offered the defendant technical support early in the site's existence and later purchased drugs through the dark net marketplace.

Richard Bates, who met Ulbricht during their time attending the University of Texas at Dallas — where Bates studied computer science and Ulbricht studied physics — said he was an unknowing participant in the site's nascent construction, offering his friend coding help and advice.

Nervous and with reddened eyes averted from his old schoolmate, Bates testified in a Manhattan court today that Ulbricht at first refused to explain what the questions were in relation to, only that they were being used for a "secret" site. By early 2011, shortly after Silk Road launched, Bates issued an ultimatum, telling Ulbricht he would stop assisting unless he explained what the project was. It was then that Ulbricht confided in Bates, telling him "it was a tor-based website where you could buy and sell drugs."

Bates, who coped to buying pot, MDMA, Vicodin, and even antibiotics on Silk Road, agreed to testify as part of a non-prosecution agreement with federal investigators. Ulbricht meanwhile is charged with a litany of crimes, including conspiracy, money laundering, and narcotics conspiracy — an indictment that could see him locked up for life.

"I remember seeing the homepage," Bates told the court. "I saw the green camel for the first time and pictures of drugs."

At the time, both men were living and working in Austin, Texas — Bates as a programmer and Ulbricht ostensibly as the head of a company called Good Wagon Books. Ulbricht's Linkedin profile indicates he gave up his book business in May of 2011.

After Ulbricht's admission, Bates, who said he was "very intrigued," continued to offer technical assistance. The two discussed Silk Road over Google chat, at times referring to it as "the site." It was Bates, according to the chat transcripts, who allegedly pushed to move their conversations to TorChat, a client that is accessible — just as Silk Road was — over the anonymizing tor-network. Those chats, prosecutors allege, were captured when police seized Ulbricht's laptop upon his arrest on October 1, 2013. They were read as well.

On March 15, 2011 Ulbricht left a distressed voicemail on Bates' phone, which prosecutors played. According to chat logs presented by the government, Bates, who went by his baronsyntax email, later messaged Ulbricht.

"My site is down and I don't know why," Ulbricht allegedly wrote. "I get an error about too many connections."

Bates quickly responded. "Are you looking at apache log source or what?"

Before long, Bates testified, he grew uncomfortable with the legal implications of helping Ulbricht — even if he wasn't accessing the site itself — and stopped. Their mutual attention shifted to a Bitcoin exchange that Ulbricht wanted to set up, and which Bates felt more at ease assisting with. Nevertheless, Bates said the two discussed the possibility of laundering money through the exchange.

Bates told the court that on November 11, 2011, almost a year after the site launched, Ulbricht appeared early to a party at his friend's house, clearly agitated. He allegedly told Bates that someone had posted a Facebook message on his wall that said "I'm sure authorities would be interested in your drug running site."

Bates said he told Ulbricht he had to shut the site down. "I can't shut it down because I've already sold it to someone else," Ulbricht reportedly responded.

The defense concedes that Ulbricht started the site but says he soon gave it up, arguing that he was set up by whoever was really behind the Dread Pirate Roberts user name that administered the site.

For the next two years, Ulbricht maintained to Bates he no longer controlled Silk Road, at one point in 2013 allegedly chatting "Glad that's not my problem anymore."

Prosecutors, however, introduced a tor-chat log from December 2011 between a user they say was Ulbricht and one who went by Variety Jones, or vj. Journals seized from Ulbricht's laptop upon his arrest portray Variety Jones as a "mentor" who allegedly urged Ulbricht along, giving the then earnest libertarian sea legs to take on ownership of a site that prosecutors are alleging handled some $1.2 billion in Bitcoin transactions.

In the December chat, Variety Jones asks the user alleged to be Ulbricht who knew he was connected to the site.

"Two people," the user responds, possibly referring to a one-time girlfriend of Ulbricht's named Julia, who was mentioned in journals found in the laptop, as well as Bates, who also testified Julia knew of the site. "They think I sold the site and got out a month ago."

A month later, on January 15, 2012, Variety Jones advised taking up a new moniker.

"You need to change your name from Admin, to Dread Pirate Roberts," he wrote.

The trial will pick up again Monday, when IRS agent Gary Alford — who tipped off FBI and Homeland Security Agents to Ulbricht's identity — will testify.

Ross Ulbricht Admits to Founding Silk Road — but Claims He's Not 'Dread Pirate Roberts.' Read more here.

Follow Samuel Oakford on Twitter: @SamuelOakford