5.Opening Statement — Defense

MR. DRATEL: Thank you, your Honor.

Good afternoon. May it please the Court:

My name is Joshua Dratel, and along with the other members of the defense team, who you've already met as well, we represent Ross Ulbricht.

Ross is a 30-year-old with a lot at stake in this trial, as you can imagine. It is important, as jurors -- part of your oath -- I know you understand it -- to keep an open mind, not to draw conclusions. There is direct examination and then there is cross-examination. Cross-examination of government witnesses is where we get the opportunity to ask questions. And those questions and answers, I submit to you, will tell you the story about this case.

Use your common sense. Use your life experience. Those are the most important things you have with you to determine the outcome of this case. The outcome, which I submit to you, after you hear all of the evidence, will be not guilty on all of the counts. Ross has pleaded not guilty. It is the government's burden, as the Court has told you, to prove each and every element of the charges beyond a reasonable doubt. Now, I won't try to define that for you now but at the end of the case the Judge will, and it is an important, fundamental principle that protects all of us.

This case, to a large extent, is about the Internet and the digital world where not everything is what it seems. You and I are having this experience right now and you are perceiving it and you know I am here and you know the Judge is here and you know the government is here and Mr. Ulbricht is here and everyone else. Behind the screen, however, on a computer, it is not always so easy to tell. You don't know what or who is on the other side. You don't know if they are telling you the truth. You don't know if they are who they present to be.

You will hear evidence. You will hear how Ross is a young man with ideas, a lot of ideas, many of which he doesn't follow through with. And Silk Road was Ross' idea. He created it as a completely freewheeling, free market site that could sell anything except a couple of items that were harmful. It was kind of an experiment, an economic experiment that after a few months was too stressful for him and it got out of hand in terms of becoming popular and what it involved -- to be involved in a site like that. So he handed it off -- you will hear, he handed it off to others.

And at the end -- I will get to the middle as well, but at the end he was lured back by those operators to be in a position, that you heard about from the prosecutor in that library that day, to take the fall for the people operating the website. Because they had been alerted that they were under investigation. They had been alerted that the walls were closing in on them. They had been alerted that time was scarce for them to escape. And Ross was the perfect fall guy because, after all, Silk Road was his idea. He was also involved in Bitcoin. He was an investor in Bitcoin. He was a trader in Bitcoin. You will hear about that. So the connection of Bitcoin and Silk Road, again, made him the perfect fall guy. So other than that day of arrest we'll see what connects Ross to the operation of Silk Road, whether it's just a digital contrivance that left him holding the bag when the real operators of Silk Road knew that their time was up.

Timelines are going to be very important in this case, what's happening on the Silk Road website, what's happening with the investigation, what's happening with Dread Pirate Roberts, who we will call "DPR." And you will hear about the DPR concept and where it comes from. It comes from a movie, earlier a book, from decades ago. Nothing particular to Ross.

They won't connect him to anything particular about Dread Pirate Roberts and that name. But look at the timeline, what's happening with Dread Pirate Roberts, what's happening with Silk Road, what's happening with Ross' life, what's happening with Bitcoin and the Bitcoin market. Now, the government's claim, as you'll hear from the evidence, that Ross was Dread Pirate Roberts is a contradiction that's so fundamental and dramatic that it defies all of your common sense and life experience. You heard the government talk about what a mastermind, the complicated computer operations, the scrupulous security to run the most profitable, diverse black market Internet marketplace in history. Yet -- and this is someone who studiously avoided revealing his identity to anyone associated with the site. That is employees -- the employees will come in, they don't know Ross Ulbricht from me. The vendors, the people who sold on the site, they don't know Ross Ulbricht from me. The purchasers of drugs on the site, they don't know Ross Ulbricht from me. The confidential informants the government had operating as buyers and sellers and administrators didn't know Ross Ulbricht from me. DPR was impenetrable on that website in his meticulous consideration of his operation with communications security.

And yet they are going to tell you that the same person, this mastermind, this incredibly careful person goes to a public library, gets on a public Wi-Fi system -- open on his computer is also something called BitTorrent, which is a peer-to-peer file sharing program that allows anyone access to your computer who is on that same network. Some of this is technical, and regardless of your technical background, you really should use your common sense and your life experience. The technical stuff is the easy part. The common sense is the important part.

So he is in a public place, on a public Wi-Fi, with a program open that allows anyone on a huge network worldwide access to his computer. With journals going back years, with all sorts of other evidence the government is going to come in and claim is a thread from beginning to end, that Ross is the Dread Pirate Roberts? It is a contradiction that is so fundamental that it defies common sense, and you will hear all of that in the evidence.

MR. DRATEL: In his apartment, they found in the wastebasket handwritten notes, handwritten notes about the site. Can you imagine that that's the same person? Can you imagine that Dread Pirate Roberts would do that in a wastebasket? This is the criminal kingpin the government has described who managed and operated the most successful and profitable Internet black market website in history: Handwritten notes in his wastebasket.

You'll also hear that even before that day in September when Ross is confronted by Homeland Security investigators about materials delivered to him, phoney IDs that were delivered to him from Silk Road, he talks to them, he talks to them about Silk Road, and then what happens in the two months between then and his arrest? Does he run? No. Does he go underground? No, still living in San Francisco. Under his own name.

Does he move any money? Any Bitcoin? No. Does he destroy all the stuff on his laptop that's supposedly so incriminating, that's supposedly on his laptop? No. Did Dread Pirate Roberts do all that? You'll hear about the evidence, you'll hear the evidence what happened. There's no evidence you'll hear that he traveled with the money, that he did anything to suggest that he was a criminal mastermind keeping one step ahead of the law even after the Homeland Security visit to him in his apartment in San Francisco.

Contrast that with what you'll hear about the real DPR. You'll see from the chats that the real DPR was extraordinarily sensitive to security, extraordinarily sensitive to law enforcement intrusion on Silk Road, law enforcement infiltration of Silk Road, law enforcement attempts to identify. You'll hear from the evidence that the real DPR was paying for information about law enforcement investigations. And you'll hear that he kept a file full of information provided to him and how by September 13, he was warned that law enforcement was in possession of his real name, and that name is not Ross Ulbricht. That is what compelled, you'll hear from the evidence, compelled the real DPR to put his escape plan into action and transfer the blame to Ross.

You'll see how Ross, naïve, ultimately became the victim of DPR and that's why he is sitting before you now as a defendant in this case, and conveniently supplied with access and all the information to his laptop, so when FBI arrived that day, he would be left holding the bag.

Also, look at Ross' lifestyle. They didn't say he didn't live lavishly, but really, when you talk about the profits of this, you'll see that money in Bitcoin is a fraction, a small fraction of what his -- the profits were from the Silk Road website. Where is the rest of the money? They haven't connected any of it to Ross. There is no connection to Ross to the rest of that money. DPR has it, the real DPR.

And the whole thing about lavish lifestyles and living under the radar, people don't operate drug empires to live a simple life enjoying the creature comforts. They do it for the money. They do it for the lifestyle. They do it for the greed. You have life experience and you have common sense. Apply it to the evidence as you hear it.

The government's premise all along is that Silk Road was the product of a master computer programmer. Doesn't fit Ross' profile. They can talk all they want about self-taught and asking questions of a friend. We'll hear about that as we get into the evidence.

And where is that money? The real DPR is out there. Silk Road II was online within six to eight weeks of Ross' arrest. The government also talked about violence and attempts at violence, but that's not charged here. Don't be distracted. It's not charged here. There's no evidence ever the people involved ever existed, you'll hear that and the government will read that in a stipulation, no evidence anyone was ever harmed or as, like I said, or even existed who were supposedly the targets.

The Internet is an unusual place. People can create and fabricate profiles of themselves and others in ways that we may not have been able to imagine 20 years ago, maybe 25 years ago now. It's like a dating site, you get all sorts of information and when you meet them in person, they may not quite match what was on that profile. None of it may match. When witnesses take the stand, you'll be able to judge them. You'll be able to evaluate their testimony, whether they're lying, whether they're telling the truth, whether it's a combination of both. On the Internet, how do you judge that, who you're communicating with?

Some of the concepts the government talked about you'll find out a little more, the Tor, the onion router, the part of the Internet that Silk Road existed on, this deep, dark place that was developed by the United States government for legitimate means that is used legitimately in many aspects. There's nothing deep and dark about it.

Bitcoin, another aspect, it's traded openly. Its value over time will be an important aspect in this case because you will hear how that $18 million was made. That Bitcoin was worth almost nothing in 2010 when an investor in Bitcoin could buy them for pennies and that it's worth hundreds and hundreds of dollars, four to $600 by the end of 2013. Think about what kind of profit you can make just trading Bitcoin.

By the way, you know it's only anonymous in terms of the transaction between people in terms of Bitcoin, it's traceable. The transactions themselves are all traceable in what's called a block chain for Bitcoin. Bitcoin is not designed to be a fraud. Bitcoin is not designed to be a means of criminal activity. Bitcoin was designed to be an antifraud currency measure, digital, unduplicatable in that regard, so antifraud, and you'll hear all about that.

In regard to the witnesses, and again, by the way, just about the money, no one traced any of it back to Ross except what's on that laptop. Where is the rest of it? Let's hear the evidence or the lack of evidence.

What about the witnesses? The only one who even knew Ross and this was a friend back in the beginning and others, the drug dealer they talked about is another witness as well who have made deals with the government in exchange for their testimony to avoid the serious consequences of their own conduct. They made a choice, and you'll hear about it, to provide testimony to the government in exchange for significant, significant benefits, so that they can be in that seat instead of that seat.

So please, as the evidence comes in at the conclusion of the case I'll speak to you again obviously to sum up, but the case is simpler than it appears in the context of the technology. You have to apply your common sense. That's your best attribute and your life experience. Ross is not a drug dealer. Ross is not a kingpin. Ross was not involved in any conspiracy to do anything like that. He was not involved in any conspiracy to sell hacking software or phoney IDs or anything that's charged in the indictment.

And at the end of the case, after you hear all of the evidence and the closing arguments and deliberate, I submit to you there's only one verdict that the evidence will permit and that your common sense will permit, that Ross is not guilty on all of the counts against him.

Thank you.