Feds: Spinoff Of Shuttered Silk Road Website Leads To California Arrest
NEW YORK (CBSNewYork/AP) -- A California man has been arrested for starting a spinoff version of the shuttered Silk Road website, enabling more than 100,000 people to buy and sell illegal drugs in the last year, authorities announced Thursday.
Blake Benthall, 26, faces a conspiracy to commit narcotics trafficking count that carries a potential penalty of life in prison and a mandatory minimum sentence of 10 years. He also faces related charges after his arrest in San Francisco on Wednesday.
U.S. Attorney Preet Bharara said in a statement that Benthall created "Silk Road 2.0,'' a "nearly identical criminal enterprise'' website, about five weeks after the government shut down the original version last year. Authorities said the original site generated more than $1 billion in illicit business since 2011.
"Let's be clear -- this Silk Road, in whatever form, is the road to prison,'' he said. 'Those looking to follow in the footsteps of alleged cybercriminals should understand that we will return as many times as necessary to shut down noxious online criminal bazaars. We don't get tired.''
FBI Assistant Director-in-Charge George Venizelos said, "Benthall should have known that those who hide behind the keyboard will ultimately be found.''
Sen. Charles Schumer said the Internet has been the greatest invention for information, access and commerce, "but unfortunately this convenience has allowed drug dealers who seek to peddle illegal drugs to find a new way to do it," 1010 WINS' Juliet Papa reported.
Schumer praised the recent arrest, but said law enforcement must remain vigilant.
"Now that he's been arrested, hopefully we can put an end to this," Schumer said. "The DOJ and the DEA have to be vigilant. We can't play Whac-A-Mole here -- close down one Silk Road and let another one pop up."
Assistant U.S. Attorney Kathryn Haun said Benthall is a flight risk and a danger to the community. She argued against bail at his initial appearance in federal court in San Francisco on Thursday. She also says Benthall has confessed.
Wearing a hooded sweatshirt with "Internet Better'' on the back, Benthall was returned to a federal lockup after the hearing. He is expected back in court Friday.
His attorney, Daniel Blank, said the only question is whether he'll be free pending bail. He declined further comment.
Authorities said the copycat version of Silk Road attracted about 150,000 active users since Benthall started it in December, acting as its owner and operator. They said it generated monthly sales of at least $8 million as it was used by thousands of people peddling illegal drugs and other illicit goods and services to buyers worldwide.
Silk Road 2.0 appeared online only weeks after the government announced in October 2013 that it had shut down Silk Road and arrested Ross William Ulbricht. Investigators say Ulbricht was known online as "Dread Pirate Roberts'' and was Silk Road's owner and operator. Ulbricht, who has pleaded not guilty, is awaiting a January trial in New York.
Authorities said the copycat website was virtually identical to Silk Road, appearing exclusively on the Tor network, which cloaks the locations of Internet servers and users, and requiring all transactions to be paid with the virtual currency bitcoin. Initially, they said, Benthall even went by the "Dread Pirate Roberts'' moniker before switching to "Defcon.''
They said the offerings on Silk Road 2.0 consisted overwhelmingly of illegal drugs, including hundreds of listings for psychedelics, Ecstasy, marijuana and opioids. Other offerings included phony identification documents and computer hacking tools and services, authorities said.
They said a break in the investigation occurred when an undercover investigator from Homeland Security Investigations infiltrated the website's support staff, gaining access to private, restricted areas of the site where the investigator could interact directly with Benthall.
You May Also Be Interested In These Stories:
(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)