4.Jared Der-Yeghiayan — Cross (Part 9)
989 linesCROSS-EXAMINATION (Continued) BY MR. DRATEL:
MR. DRATEL: Good afternoon, Agent Der-Yeghiayan.
JARED DER-YEGHIAYAN: Good afternoon.
MR. DRATEL: Going back to Mark Karpeles, he had -- he had an associate named Ashley Barr, correct?
MR. TURNER: Objection; foundation.
THE COURT: If he knows.
JARED DER-YEGHIAYAN: I believe he had an employee named Ashley Barr.
MR. DRATEL: His right-hand man essentially?
MR. TURNER: The same objection.
JARED DER-YEGHIAYAN: That is what I believed in 2012, yes.
THE COURT: What I want you to do is try to, if you're going to go into conclusions or beliefs, to stay away from those to the extent that you're conjecturing.
If you've learned information during the course of your investigation that is of the type you would rely upon, then you may testify to that.
JARED DER-YEGHIAYAN: Okay.
THE COURT: So if you know it, you know it; but if you don't know it, you're conjecturing. And let us know that, all right?
JARED DER-YEGHIAYAN: Okay.
MR. DRATEL: So it's based upon your investigation, correct?
JARED DER-YEGHIAYAN: Yeah, based upon my investigation, I saw that there was a later on falling out between them, that they weren't as close as I originally thought they were.
MR. DRATEL: But initially, your investigation established that he was a right-hand man to Mr. Karpeles, right?
MR. TURNER: Objection, your Honor.
THE COURT: Sustained.
MR. DRATEL: On the type of information that you would rely on in your investigation, that's the type of information you had establishing that he was Karpeles' right-hand man, correct?
MR. TURNER: Objection; form and foundation.
THE COURT: Sustained.
Let me ask it this way:
Do you have any independent information that this person, Barr, is a right hand or close associate of Mr. Karpeles?
JARED DER-YEGHIAYAN: I don't.
THE COURT: All right. I take it you never spoke to this associate?
JARED DER-YEGHIAYAN: I never did, no.
THE COURT: All right. Move on.
MR. DRATEL: Mr. Barr worked for Mr. Karpeles, right?
MR. TURNER: Objection; foundation.
MR. DRATEL: Based on your investigation --
THE COURT: Here's what we're not going to do. What we're not going to do is -- he's not going to speculate.
MR. DRATEL: I'm not asking him to speculate.
THE COURT: If you know, then you may testify. Otherwise, just tell us you don't know.
JARED DER-YEGHIAYAN: He did work for him.
MR. DRATEL: And during the time period that we're talking about, right, 2011, summer of 2012, right?
JARED DER-YEGHIAYAN: Around the time period, yes.
MR. DRATEL: And Mr. Barr is a Canadian citizen, correct?
JARED DER-YEGHIAYAN: Yes, he is.
MR. DRATEL: And has a degree in computer science, correct?
MR. TURNER: Objection; foundation.
THE COURT: If he knows he's been -- he seems to have knowledge from some basis.
JARED DER-YEGHIAYAN: From what I found on the open Internet, yes, he does.
MR. TURNER: Objection; hearsay.
THE COURT: That answer is struck.
If you learned something only by virtue of something that's unsubstantiated on the Internet, then we need to know that. If it's something that you're basing on something that's reliable, then that would be helpful.
Why don't you build a foundation as to what the source of his knowledge is and then we can proceed.
MR. DRATEL: What's the source of your knowledge about Mr. Barr's education?
JARED DER-YEGHIAYAN: It came from an Internet page.
MR. DRATEL: Was it his LinkedIn page?
MR. TURNER: Objection; hearsay.
JARED DER-YEGHIAYAN: I believe it might have been his LinkedIn page.
MR. TURNER: Objection; hearsay.
THE COURT: I'm allowing him to at least figure out whether or not he's got any information.
And it says you've got it from a LinkedIn page, right?
JARED DER-YEGHIAYAN: I believe it might have been. I don't really recall if there was something that helped me.
MR. DRATEL: You looked at his LinkedIn page, right?
JARED DER-YEGHIAYAN: I did, yes.
MR. DRATEL: And he was also an expert in Linux, correct?
MR. TURNER: Objection.
THE COURT: Sustained.
MR. TURNER: Hearsay.
MR. DRATEL: Based on your investigation --
THE COURT: No, you can't get in the truth of what his experience is through this witness. Let's have a side bar and we'll deal with it.
I apologize, ladies and gentlemen of the jury. I really do. These are complicated issues. Trials are complicated things. Each side is doing the right thing by raising these, and I just need to make sure that we proceed carefully, all right, but I do apologize.
(Continued on next page)
(At the side bar)
THE COURT: I don't want to revisit everything we've been through. I know that the defense does not agree with my rulings and so I understand that. What I would like you to do is, you can make a proffer during a break or in a letter as to what you would ask that you understand I'm precluding you from asking so I'll confirm it, so you've got it preserved for appellate purposes.
But right now, my ruling is you can't use this witness about what he's read on the open Internet to confirm that certain kinds of expertise were or were not within the -- were not held by Mr. Barr or Mr. Karpeles.
This witness is reviewing things on LinkedIn and he can't then say he was an expert in Linux. He can't. He can, you know, the most that he can do, and you'd never be able to rely upon it, to state he was an expert --
MR. DRATEL: I'm fine with the notion that everything that's on the Internet is unreliable and that goes for everyone, and that goes for all their evidence, too. And I'm going to move to strike all of their evidence because it's all Internet.
THE COURT: What you need to do is you need to go back, because there's a difference between something appearing on an Internet where we've gone through each of the evidentiary issues, for instance, a page that says brown heroin and something where we're extrapolating from a LinkedIn page which, by the way, has got all kinds of Vayner issues, that he is in fact an expert in Linux. I have no idea who put that there, whether he put that there or somebody else put that there, he being Mr. Barr.
MR. DRATEL: It's not a Vayner issue because Vayner was about the website itself. The Russian version of Facebook had not been established. If it was Facebook, they would have let it in.
THE COURT: I don't know enough about LinkedIn. I'm not a LinkedIn user myself, so as to the indicia of reliability of who can edit, I don't know whether or not this person is or is not an expert in Linux. I have no idea. You can call Barr and find out what his expertise is. I don't know where this fellow lives.
MR. DRATEL: He's Canadian. I have no subpoena power over him.
THE COURT: I don't know where he's located. If he's in New York City, he can be down the street for all I know.
MR. DRATEL: He's in Japan.
THE COURT: My point is, you can't get that kind of thing in. What other things are we likely to confront so we don't have back and forth that gets heated in front of a jury?
MR. DRATEL: Talking about Karpeles' credentials?
THE COURT: You can get in that there may have been information that he saw that indicated certain things, but I will give an instruction that we have no idea that it's true and you can't then --
MR. DRATEL: We don't know what the basis is.
THE COURT: Hold on. Let me say I want to make sure that you understand what you can't do is get from this witness Karpeles was an expert in X, Y or Z and then cite that in your closing that this fellow was an expert in X, Y or Z. I have no idea whether this stuff accurate or not on the Internet.
MR. DRATEL: Let's find out from him where he got it from because it may be that he didn't get it from the LinkedIn page. Maybe he did other research.
THE COURT: If he did, if you can build a foundation, then you can build a foundation. If he checked in with a university, for instance, and found out from the University of Ottowa that this person had received a degree in computer science, that's a different kettle of fish than looking on the Internet and surmising or a news article.
MR. DRATEL: All right.
THE COURT: Build a foundation.
(Continued on next page)
(In open court; jury present)
BY MR. DRATEL:
MR. DRATEL: Now, you did research on certain software platforms, correct?
JARED DER-YEGHIAYAN: Can you be more specific?
MR. TURNER: Objection; form.
THE COURT: He can answer that question.
You may answer.
JARED DER-YEGHIAYAN: I'm sorry. Can you --
MR. DRATEL: You did research on certain software platforms, correct?
JARED DER-YEGHIAYAN: In what context?
MR. DRATEL: Well, MediaWiki, right, M-E-D-I-A-W-I-K-I, correct?
JARED DER-YEGHIAYAN: I did look into that; yes.
MR. DRATEL: And you found that there were similarities between Silk Road market and a forum associated with Mark Karpeles, correct?
JARED DER-YEGHIAYAN: It was --
MR. TURNER: Objection; foundation on the research issue.
THE COURT: There is a way of getting at this.
Did you look at the MediaWiki software platform?
JARED DER-YEGHIAYAN: I looked at its website from MediaWiki, yes.
THE COURT: Did you look at the platform it was built on?
JARED DER-YEGHIAYAN: I didn't really go too deep into the software.
THE COURT: Whether you went too deep or at a surface level, did you look at it at all?
JARED DER-YEGHIAYAN: I had looked at particular websites that were running MediaWiki; yes.
THE COURT: All right. And did you look at any websites that were run by Mark Karpeles?
JARED DER-YEGHIAYAN: Yes, I did.
THE COURT: Did the websites that were run by Mark Karpeles utilize any of the same features which you had seen from MediaWiki?
JARED DER-YEGHIAYAN: I saw the same features. I believe it was the same as the Silk Road Wiki had the same features as a website that Mark Karpeles was hosting that had MediaWiki, too.
THE COURT: So you perceived, by looking at it, certain features on MediaWiki as you did with the Silk Road?
JARED DER-YEGHIAYAN: It was the same version number, I believe.
THE COURT: The same version number?
THE COURT: You may proceed.
MR. DRATEL: That was 1.17, right?
JARED DER-YEGHIAYAN: I believe that was it; yes.
MR. DRATEL: In fact, it wasn't the latest version at the time? It was an older version, correct?
MR. TURNER: Objection; time frame.
THE COURT: Overruled.
MR. DRATEL: At the time you were looking in 2012, 2013?
JARED DER-YEGHIAYAN: It was an older version when I did observe it; yes.
MR. DRATEL: Right. So both the Karpeles site and silkroadmarket.org were operating on the same MediaWiki version that had since been updated, right?
JARED DER-YEGHIAYAN: That's correct.
MR. DRATEL: And based on your research, that platform is not used by a lot of forum administrators, correct?
JARED DER-YEGHIAYAN: I did research. And I think it was something that was just opensource that was used. I couldn't say exactly how much it was used in other websites, but --
MR. DRATEL: But didn't you say that it was not widely used by forum administrators?
MR. TURNER: Objection; hearsay.
THE COURT: I will allow it.
You may answer.
JARED DER-YEGHIAYAN: It was something that came from my source that told me that.
MR. DRATEL: But you wrote that, did you not?
MR. TURNER: Objection.
MR. DRATEL: Didn't you write that?
THE COURT: Let me ask it this way:
Did you look at a number of websites that were using the same platform?
JARED DER-YEGHIAYAN: I didn't -- it was information that was shared to me by my source at the time that instructed me on that. I wasn't familiar as a web administrator as the source was.
THE COURT: I see, but you did personally look at MediaWiki and look at the Silk Road forum and saw some overlap in the platforms?
JARED DER-YEGHIAYAN: I saw it was the same version number myself, yes, I did.
THE COURT: The other information you have about the extent to which that same version number was being used by other websites or not, that was something that you personally did not perceive?
JARED DER-YEGHIAYAN: That I did not perceive, no.
THE COURT: All right, so I think we'll move on.
(Continued on next page)
THE COURT: All right. So I think that you can go on.
BY MR. DRATEL:
MR. DRATEL: Did you swear in an affidavit that "Based on my training and experience, this platform is not widely used by forum administrators?"
JARED DER-YEGHIAYAN: It was something through the course that I learned --
MR. DRATEL: Did you not swear to that? That is the question. Did you not swear under oath in an affidavit that, based on your training and experience, the Wiki 1.17, the MediaWiki 1.17 version is not commonly used by forum administrators?
JARED DER-YEGHIAYAN: That was in my affidavit. Yes, I swore to that.
MR. DRATEL: Also, you found that the forum, and a company controlled by Mr. Karpeles, also ran something called simple machine -- I'm sorry, the Silk Road forum, and something called -- and Mutum Sigillum, Mr. Karpeles' company, ran something called Simple Machines, right, the software?
JARED DER-YEGHIAYAN: It was the bitcoin talk forums and the Silk Road forums both ran on Simple Machines forum software.
MR. DRATEL: And that wasn't common either?
JARED DER-YEGHIAYAN: That was one that I wasn't familiar with, no.
MR. DRATEL: Now, you investigated Mr. Karpeles' background, correct?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And his professional background, right?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And what kind of sources did you use?
JARED DER-YEGHIAYAN: Things that are open source information that I could -- that I could research as well as any other -- any other sources I could talk to.
MR. DRATEL: And can you tell us about the sources that you used with respect to Mr. Karpeles' expertise in Linux, L-i-n-u-x, software --
MR. TURNER: Objection.
MR. DRATEL: -- or Linux programs?
THE COURT: He can give us the sources that he used. Let me ask it this way. In the course of investigating Mr. Karpeles' background, did you identify information which referred to any experience he had in different kinds of programming languages?
JARED DER-YEGHIAYAN: I did observe some of the open source in LinkedIn pages and such that he did express --
MR. TURNER: Objection.
THE COURT: All right. Did you do anything to yourself verify the truth of whatever was in those LinkedIn pages?
JARED DER-YEGHIAYAN: No. I wasn't able to cross-reference that.
THE COURT: All right. But I take it that you did identify certain sources which indicated to you at least that the words on the page seem to suggest that there was Linux expertise?
JARED DER-YEGHIAYAN: There was.
THE COURT: And you yourself didn't verify whether or not a degree had been obtained from a particular university; you just read them on the page?
JARED DER-YEGHIAYAN: That is correct.
THE COURT: All right. Well, then, ladies and gentlemen, the witness is competent to testify about what he saw, that he saw a variety of sources that indicates that there was Linux expertise, but you should understand that he did not verify. So, therefore, it is not for the truth of that; it is for the fact that he saw that information. All right?
BY MR. DRATEL:
MR. DRATEL: And the same thing with respect to PHP, which is a programming language, correct?
MR. TURNER: I object.
THE COURT: I am going to allow him to proceed in a similar manner that the Court just did to lay a particular foundation, and if he did not verify whether or not the expertise came from a university, we will figure that out, or from another credentialing organization.
You may answer.
JARED DER-YEGHIAYAN: Yes, I did. It was in the same way that I saw the Linux language there.
BY MR. DRATEL:
MR. DRATEL: By the way, Linux is the operational system for Silk Road, right, in many ways?
JARED DER-YEGHIAYAN: I believe that and Ubuntu, which it runs.
MR. DRATEL: And PHP?
JARED DER-YEGHIAYAN: PHP is a different website programming language.
MR. DRATEL: And the information that you saw also was that Mr. Karpeles had worked professionally in both systems, PHP and Linux, right?
JARED DER-YEGHIAYAN: Based on the résumé that I saw, yes.
MR. DRATEL: Now, as part of your investigation you looked into IP addresses associated with Mr. Karpeles, correct?
JARED DER-YEGHIAYAN: That's correct.
MR. DRATEL: And you came up with about five pages worth, lists of IP addresses, right?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: That's pretty active Internet presence, wouldn't you say?
JARED DER-YEGHIAYAN: That is a lot of IP addresses, yes.
MR. DRATEL: And you also found out -- and this is directly from hosting companies, right, you found out; so you verified this, these IP addresses, right?
JARED DER-YEGHIAYAN: Yes. Through subpoenas, yes.
MR. DRATEL: Yes. Also you verified, through the subpoenas, that Mr. Karpeles was actively using the support for a software called MYSQL, correct?
MR. TURNER: Objection.
MR. DRATEL: MySQL.
MR. TURNER: Objection. Form.
THE COURT: I will allow it.
JARED DER-YEGHIAYAN: I believe he was using MySQL yes.
MR. DRATEL: Do you need to be sure?
JARED DER-YEGHIAYAN: It's hand in hand with PHP so I'm assuming, yes, he did.
THE COURT: Don't assume.
JARED DER-YEGHIAYAN: If you have something I could reference, yes, I will certainly look at it.
MR. DRATEL: Sure.
(Pause)
MR. DRATEL: 3505-3767.
MR. DRATEL: If you just look at that first paragraph (handing).
JARED DER-YEGHIAYAN: Sure.
(Pause)
MR. DRATEL: And so you got confirmation through the subpoenas that he had a port open for M-y-S-Q-L, MySQL?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: That's also something that is used in Silk Road, right?
JARED DER-YEGHIAYAN: I believe so, yes.
MR. DRATEL: Silk Road relied on a highly complex system for processing bitcoins, right?
MR. TURNER: Objection. Foundation.
MR. DRATEL: Based on your investigation?
MR. TURNER: The same objection.
THE COURT: I will allow it.
Do you want to rephrase it?
MR. DRATEL: No. If the Court will allow it.
THE COURT: I will allow it.
JARED DER-YEGHIAYAN: I'm sorry. Could you repeat, please.
MR. DRATEL: Sure. Based on your investigation, Silk Road relied on a highly complex system for processing bitcoins, correct?
JARED DER-YEGHIAYAN: Yes, it did.
MR. DRATEL: Now, in addition to some of the other subpoenas we've talked about, you also subpoenaed a service in Germany called G small M and small B H -- I'm sorry, BSB Service. Capital G small M small B capital H, right? That is the German suffix for corporation, GmbH.
But you subpoenaed that with respect to Mr. Karpeles as well, right?
JARED DER-YEGHIAYAN: I believe it is the 1API, yes.
MR. DRATEL: Now, in all of those returns on the subpoenas that you got from that stuff, the IP addresses, was there anything about Mr. Ulbricht in any of that?
JARED DER-YEGHIAYAN: There was not.
MR. DRATEL: Now, even after Mr. Ulbricht was arrested, you continued your investigation of Mr. Karpeles, correct?
JARED DER-YEGHIAYAN: I wanted to see if there was any other ties to him, yes.
MR. DRATEL: And were there any inferences in the notes on Mr. Ulbricht's computer with respect to Mr. Karpeles' involvement and associations with Silk Road?
MR. TURNER: Objection. Form.
THE COURT: Sustained.
MR. DRATEL: Did you review notes from Mr. Ulbricht's computer?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: Did you find any inferences of Mr. Karpeles' involvement and association with Silk Road?
MR. TURNER: Objection. Form. Foundation. Hearsay.
THE COURT: Sustained.
MR. DRATEL: Foundation is --
THE COURT: No, you can do it, but you can't ask him were there any differences. You can show him different things. The jury is the body that will draw inferences. That's the way it is.
BY MR. DRATEL:
MR. DRATEL: Did you find inferences --
THE COURT: I'm not going to allow finding inferences. If you want to ask him about certain facts he saw on the website, you can.
MR. DRATEL: Could we have a sidebar, your Honor?
THE COURT: I am not going to do a sidebar on this one.
BY MR. DRATEL:
MR. DRATEL: When you reviewed Mr. Ulbricht's notes, or what were on -- withdrawn.
You reviewed what was on Mr. Ulbricht's laptop, correct?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And part of that was you were looking for things about Mr. Karpeles, correct?
JARED DER-YEGHIAYAN: I was looking for any associations with Mr. Karpeles, yes.
MR. DRATEL: Did you find any?
JARED DER-YEGHIAYAN: There was his name mentioned on some text documents, yes.
MR. DRATEL: Now, the bitcoin forum that we are talking about, shortly after Mr. Ulbricht was arrested there was a report that you received -- and this is not for the truth, this is for the report -- that it had been hacked, correct?
JARED DER-YEGHIAYAN: I believe so, yes.
MR. TURNER: Objection. Hearsay.
THE COURT: Well, it is not for the truth. It is just for the fact that the report indicated that.
You don't know whether or not it was in fact hacked, do you?
JARED DER-YEGHIAYAN: I do not, no.
THE COURT: You can go ahead and continue.
BY MR. DRATEL:
MR. DRATEL: And that would eliminate the ability to find information on bitcointalk.org that might have some integrity, right, because that would eliminate that prospect because it would have been hacked, right?
MR. TURNER: Objection. It calls for speculation.
THE COURT: Sustained.
MR. DRATEL: If it had been hacked.
THE COURT: No. He is not an expert witness to talk about the evidence of hacking.
MR. DRATEL: You never saw Mr. Karpeles' laptop, correct?
JARED DER-YEGHIAYAN: No, I've never seen his laptop or computers.
MR. DRATEL: Mr. Karpeles also controls a lot of websites, correct?
JARED DER-YEGHIAYAN: He was a hosting provider, yes.
MR. DRATEL: And part of the your investigation in terms of trying to keep the integrity of your investigation intact, you advised other agents and other agencies not to go on Karpeles' websites because he tracked them, correct?
MR. TURNER: Objection. Relevance and foundation.
THE COURT: I will allow it.
(Pause)
THE COURT: There is a form issue with the word "integrity." Why don't you re-ask the question in a form that I will allow.
MR. DRATEL: We are beyond that. It is the next question which is about --
THE COURT: No. The question you had was in part of your investigation --
MR. DRATEL: I'm sorry.
MR. DRATEL: So in part of your investigation, in order to keep it confidential, to keep targets from being advised of the fact that they were under investigation, you strongly advised people in the government -- your colleagues, other agencies -- not to go on Karpeles' website because you were afraid that he would be able to see that, had they done so, they would be advised of the investigation, right?
MR. TURNER: Objection. Relevance and foundation as to the latter part of the question.
THE COURT: I will sustain the objection, but there is a form of it that you can ask but you are adding in a lot of other stuff.
MR. DRATEL: Did you advise your colleagues in HSI around the country, as well as other agencies, not to go to Karpeles' websites and not to visit them?
JARED DER-YEGHIAYAN: The websites that I listed in my report, I did say do not visit those websites. I said that, yes.
MR. DRATEL: And the reason was because you wanted to keep the investigation confidential, right?
JARED DER-YEGHIAYAN: It's what we do in investigations, yes.
MR. DRATEL: You were afraid that if someone went on one of those sites, it might give Karpeles notice that the government was looking at his sites?
JARED DER-YEGHIAYAN: That is why, yes.
MR. DRATEL: You are also familiar with someone named Anand Athavale. I don't know if I am pronouncing it correctly, but A-n-a-n-d is the first name, last name A-t-h-a-v-a-l-e.
JARED DER-YEGHIAYAN: I am.
MR. DRATEL: And he is a Canadian?
JARED DER-YEGHIAYAN: He is a Canadian citizen, yes.
MR. DRATEL: He lives in Vancouver, or lived in Vancouver during 2012 and 2013?
MR. DRATEL: Objection. Foundation.
THE COURT: Why don't you build a foundation for that so we'll see what it is based on.
MR. DRATEL: Did you find out that he lived in Vancouver during that period of time?
MR. TURNER: Objection. Foundation.
MR. DRATEL: Did you do an investigation to find out that he lived there?
MR. TURNER: Objection. Foundation.
THE COURT: Did you look to try to find out where this guy was from?
JARED DER-YEGHIAYAN: I did.
THE COURT: What kinds of information did you look at? Did you look at a passport?
JARED DER-YEGHIAYAN: I believe it is from travel records.
THE COURT: And travel records from Homeland Security or the Canadian counterpart?
JARED DER-YEGHIAYAN: It is from Homeland Security. I am trying to recall. I'm sorry.
THE COURT: These are records maintained by the customs folks when people would enter or exit the national boundaries?
JARED DER-YEGHIAYAN: That is correct.
THE COURT: And they maintain records as part of that recordkeeping function as to the citizenship reported of the entrant or exiter?
JARED DER-YEGHIAYAN: They do.
THE COURT: All right. And what did that indicate to you for this individual?
JARED DER-YEGHIAYAN: He was crossing over around Vancouver. Actually, initially I think it was Toronto and then later on it was north of Vancouver.
THE COURT: Did it give any indication as to his declared citizenship status?
JARED DER-YEGHIAYAN: We -- throughout the process of the investigation, later on we did confirm through Canadian customs that he was a Canadian citizen, and we did get records from the RCMP.
THE COURT: All right. Thank you.
Mr. Dratel, you may proceed.
MR. DRATEL: Thank you, your Honor.
BY MR. DRATEL:
MR. DRATEL: Now, you also did an investigation in terms of his Internet presence, correct?
JARED DER-YEGHIAYAN: I did.
MR. TURNER: Objection to form.
THE COURT: I will allow it. There was an objection. I was letting you go ahead. I was overruling the objection.
MR. DRATEL: Thank you, your Honor.
MR. DRATEL: And the list of domain names that he owned was four pages long, right?
JARED DER-YEGHIAYAN: I believe so, yes.
MR. DRATEL: And the list of his current known IP addresses was a half page, right?
JARED DER-YEGHIAYAN: From what I got back from the subpoenas, yes.
MR. DRATEL: And he also is someone with computer proficiency based on what you learned in your investigation, correct?
MR. TURNER: Objection. Foundation.
THE COURT: Why don't you approach it the same way as you approached the other one?
MR. DRATEL: What were the sources of your information with respect to Mr. Athavale and who he was and what he -- and, you know, his Internet presence and his Internet -- and his computer proficiency?
JARED DER-YEGHIAYAN: I believe he had also a LinkedIn page, as well, where he would describe his credentials.
MR. TURNER: Objection. Hearsay.
THE COURT: Sustained.
Let me ask it this way. Did you look at a LinkedIn page that appeared to be associated with this fellow Athavale?
JARED DER-YEGHIAYAN: I believe so, yes.
THE COURT: Did you investigate whether he himself put the information on the page or whether somebody else put the information on the page?
JARED DER-YEGHIAYAN: I wasn't able to tell if he put it on himself but I assume so, yes.
THE COURT: But you saw a page that appeared to be associated with this individual, and based on that page you saw information that indicated he had some computer experience?
THE COURT: And you didn't separately verify that, is that right?
JARED DER-YEGHIAYAN: No, I did not.
THE COURT: But you saw that there was a LinkedIn page which simply provided information indicating that he had computer experience?
THE COURT: All right. So we don't know, ladies and gentlemen, whether it was true or not. We just know there was a LinkedIn page that was in existence that indicated this individual had some computer experience. Whether that LinkedIn page was accurate or not or by this individual or somebody else purporting to have that name is unknown.
You may proceed, Mr. Dratel.
MR. DRATEL: Thank you, your Honor.
BY MR. DRATEL:
MR. DRATEL: And this, again, was in the latter part of 2012, correct, like November 2012?
JARED DER-YEGHIAYAN: Correct.
MR. DRATEL: And, by the way, Vancouver is in the Pacific Time Zone, right?
JARED DER-YEGHIAYAN: Yes, it is.
MR. DRATEL: And at some point have you reviewed any private messages on the Silk Road service that existed -- on the Silk Road websites or servers or anything on Silk Road, have you reviewed any private messages that had the name Anand Athavale in them?
MR. TURNER: Objection, your Honor.
THE COURT: Give me one more word.
MR. TURNER: 403.
THE COURT: I will allow this question. You may answer.
JARED DER-YEGHIAYAN: Looking for his name on the servers?
MR. DRATEL: Have you seen any entries in the universe of Silk Road on the servers that has his name?
JARED DER-YEGHIAYAN: If there is something to help me recollect my memory?
MR. DRATEL: Private messages. Someone named "deathfromabove"?
MR. TURNER: Objection, your Honor.
THE COURT: Sustained.
MR. DRATEL: He wanted me to help him.
THE COURT: I know. But you are connecting that, the two. So you can build a foundation for it.
BY MR. DRATEL:
MR. DRATEL: I show you what's marked as Defendant's E, for identification.
MR. TURNER: Is this being offered to refresh recollection, your Honor?
MR. DRATEL: Yes.
MR. TURNER: Then I object to foundation.
MR. DRATEL: He asked for me to show him something.
THE COURT: I've got to see what it is first before I figure out if there is a problem.
(Pause)
THE COURT: All right. I will allow you to --
MR. TURNER: Your Honor, can we have a sidebar?
THE COURT: No. I didn't allow one for him. I will take it step-by-step.
So ask your next question, Mr. Dratel.
MR. DRATEL: Thank you, your Honor.
MR. DRATEL: I just ask you to look at that, read it to yourself.
THE COURT: And who put the --
MR. DRATEL: Redactions?
THE COURT: Redactions?
MR. DRATEL: We did, your Honor, for a reason that I can explain later.
THE COURT: All right.
BY MR. DRATEL:
MR. DRATEL: Have you seen that before?
JARED DER-YEGHIAYAN: Not that I recall, no.
MR. DRATEL: Now, with respect to Mr. Ulbricht, you subpoenaed the entirety of his Facebook account, correct?
I'm sorry, withdrawn.
The government got a warrant for the entirety of Mr. Ulbricht's Facebook account, right?
JARED DER-YEGHIAYAN: I wasn't included on that, that I recall.
MR. DRATEL: How about Google? You are aware of it, right?
JARED DER-YEGHIAYAN: I am aware of Google, yes.
MR. DRATEL: PayPal you are aware of, right?
JARED DER-YEGHIAYAN: I believe there was multiple subpoenas issued. A lot of them was done through FBI and not through me.
MR. DRATEL: And you have also reviewed his travel history, right, from the same kind of records that you looked at when you talked about Mr. Athavale, right?
JARED DER-YEGHIAYAN: I reviewed Mr. Ulbricht's travel records, yes.
MR. DRATEL: And basically one trip per year, right?
JARED DER-YEGHIAYAN: I believe that is accurate, yes.
MR. DRATEL: One was to Costa Rica, correct?
JARED DER-YEGHIAYAN: I believe so, yes.
MR. DRATEL: And did you learn during the course of your investigation that his parents have a business in Costa Rica?
MR. TURNER: Objection. Foundation.
THE COURT: Well, I will allow it.
I mean, did you ever receive information indicating that one way or the other?
JARED DER-YEGHIAYAN: I saw open source information off the Internet that would indicate that, yes.
THE COURT: Did you ever confirm it independently of that open source information?
JARED DER-YEGHIAYAN: No, I did not.
THE COURT: All right. So you heard or saw information from the Internet which is not separately confirmed?
JARED DER-YEGHIAYAN: That is correct.
THE COURT: All right. So, ladies and gentlemen, whether or not the parents have a business in Costa Rica is not yet in the record, but the witness saw information indicating something to that effect but did not confirm it.
BY MR. DRATEL:
MR. DRATEL: You got his Mt. Gox account records, right?
JARED DER-YEGHIAYAN: Yes. The Mt. Gox records were also I believe through subpoena.
MR. DRATEL: Weren't you given the account number by Karpeles' attorney?
JARED DER-YEGHIAYAN: I was not --
MR. TURNER: Objection.
MR. DRATEL: The government?
THE COURT: And if you have personal knowledge, then testify to it, but don't speculate if you weren't given a number.
JARED DER-YEGHIAYAN: It was given to the Baltimore office.
MR. TURNER: Objection. Foundation.
THE COURT: That is struck since it is not your personal knowledge.
Did you learn of that through a communication with somebody, through an A.U.S.A. in Baltimore?
JARED DER-YEGHIAYAN: Through the U.S. attorneys.
THE COURT: The fact of it, that he received that information, is OK, but you can't get the truth of the account number if you are not going to connect the dots.
MR. DRATEL: I would move it under 807.
MR. DRATEL: So you were told that by an assistant United States attorney?
MR. TURNER: Objection. Hearsay.
THE COURT: Sustained.
MR. DRATEL: And Karpeles was still under investigation at the time, correct?
THE COURT: Can we get the timeframe.
MR. DRATEL: October 12, 2013, eleven days after Mr. Ulbricht's arrest, right?
JARED DER-YEGHIAYAN: We were still looking at him for money service business service charges, yes.
MR. DRATEL: Now, going back to Mr. Karpeles, you never saw his laptop, right?
JARED DER-YEGHIAYAN: No, I have not.
MR. DRATEL: You never saw his desk-top or any computer belonging to him, correct?
JARED DER-YEGHIAYAN: I have not.
MR. DRATEL: You never saw his phone, his smart phone or any other phone, right?
JARED DER-YEGHIAYAN: No, I have not.
MR. DRATEL: You never had access to any of the servers that he maintains overseas, right?
JARED DER-YEGHIAYAN: I have not.
MR. DRATEL: With respect to Mr. Athavale, the same thing, right? You never saw his laptop?
JARED DER-YEGHIAYAN: No, I did not.
MR. DRATEL: His phone?
JARED DER-YEGHIAYAN: No, I have not.
MR. DRATEL: Any electronic device that he owns?
JARED DER-YEGHIAYAN: Nothing belonging to him, no.
MR. DRATEL: You have heard of someone named Richard Bates, correct?
JARED DER-YEGHIAYAN: The name is familiar, yes.
MR. DRATEL: Well, he is someone whose name came up just prior to Mr. Ulbricht's arrest, correct?
MR. TURNER: Objection. Form. Foundation.
MR. DRATEL: You learned of his name just prior to Mr. Ulbricht's arrest, correct?
THE COURT: I will allow that.
JARED DER-YEGHIAYAN: I'm sorry. I am having a hard time refreshing my recollection. Do you have something that can help me recollect my memory?
MR. DRATEL: Sure.
(Pause)
MR. TURNER: Could I see the document?
MR. DRATEL: Sure.
(Counsel conferred)
THE COURT: Did I hear you say it was 2935 through 36?
MR. DRATEL: Yes.
MR. DRATEL: Just look at it right here.
JARED DER-YEGHIAYAN: Sure.
(Pause)
MR. DRATEL: So Richard Bates is someone whose name came up in your investigation of Mr. Ulbricht, correct?
MR. TURNER: Objection. Form.
THE COURT: I will allow it.
JARED DER-YEGHIAYAN: This was something that was brought to my attention by Special Agent Gary Alford. It wasn't actually part of my investigation.
MR. DRATEL: It was basically about Bates' profile, right?
MR. TURNER: The same objection. Hearsay.
THE COURT: I will allow it.
JARED DER-YEGHIAYAN: There was discussions that he had where he brought up a possible lead in connections to Bates.
MR. DRATEL: Right. He had certain things in common not only with Mr. Ulbricht but also with DPR?
MR. TURNER: Objection. Again, hearsay.
THE COURT: Sustained.
MR. DRATEL: Some of the things were about his political views, right?
MR. TURNER: Objection.
THE COURT: Sustained.
(Pause)
MR. DRATEL: Did you look into Mr. Bates at all?
JARED DER-YEGHIAYAN: No, I did not.
MR. DRATEL: Now, before lunch we were talking about bitcoins and the accounts that you had identified -- that Homeland Security had identified as being part of Silk Road, do you remember?
MR. DRATEL: So in August of 2012, you had identified several bitcoin accounts associated with Silk Road that had the equivalent of over -- talking about bitcoins in terms of value at that time -- of over $5 million dollars, U.S. dollars, right?
MR. DRATEL: And that that had gone up from May of that year, right? In May -- withdrawn.
In May of that year, there was only about $2 million worth of bitcoins in the account, correct?
MR. TURNER: Objection. Lack of foundation.
THE COURT: Just so that I'm clear and so I understand the question, do you mean the number of bitcoins changed or the value of the bitcoins changed, or both?
MR. DRATEL: I am going to get to that, your Honor.
MR. DRATEL: So this is based on your investigation, right, and your monitoring of those wallets, those accounts, correct?
MR. TURNER: Objection. The foundation, how these wallets are associated with Silk Road.
THE COURT: Well, in connection with your review of the commissions that might be obtained through purchasing them on Silk Road, did you look at any records?
JARED DER-YEGHIAYAN: It was in connection with our purchases we did and moving money in and out. These were records or addresses that we identified in the course of the investigation that we suspected were associated to Silk Road.
THE COURT: And did you monitor the account information for those addresses?
JARED DER-YEGHIAYAN: I did.
THE COURT: All right. And during what period of time are you talking about, Mr. Dratel?
MR. DRATEL: Well, through the middle part of -- there is a series of dates in 2012.
THE COURT: So did those numbers fluctuate -- in terms of numbers of bitcoins fluctuate throughout 2012?
JARED DER-YEGHIAYAN: It increased steadily in that account up to a certain period.
THE COURT: All right. OK. Mr. Dratel, why don't you pick it up from here.
MR. DRATEL: Thank you, your Honor.
MR. DRATEL: So in July of 2012, there were about 500,000 bitcoins in an account, correct?
MR. TURNER: Objection. Form. "An account."
THE COURT: I will allow it.
MR. DRATEL: I mean, the account we are talking about. If I have to repeat everything in every question, I will. But thank you, your Honor, for allowing me.
MR. DRATEL: So in that account that you were monitoring, July 10, 2012, the account had 503,825 bitcoins in it, right?
JARED DER-YEGHIAYAN: That sounds about correct, yes.
MR. DRATEL: And the value of a bitcoin at that time was $7.10, correct?
JARED DER-YEGHIAYAN: Sounds about accurate, yes.
MR. DRATEL: So that would be about $3-and-a-half million in bitcoins? 5 times 7, add the zero --
JARED DER-YEGHIAYAN: Carry. Yes.
MR. DRATEL: I mean, you did the math at one point, right?
JARED DER-YEGHIAYAN: I had a calculator, right, yes.
MR. DRATEL: Now, so there is 500,000 bitcoins in the account, and there were 144,000 bitcoins seized from Mr. Ulbricht's laptop at the time of his arrest, right?
JARED DER-YEGHIAYAN: 144,000 bitcoins, yes.
MR. DRATEL: So there were 500,000 bitcoins in July of 2012 in that account.
Now, that was 16 months before the arrest was made, right, before the site was taken down, correct?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: So you had the entirety of those 15/16 months of how many bitcoins Silk Road would collect -- withdrawn.
Silk Road continued to make sales, collect commissions for those additional 16 months, correct?
JARED DER-YEGHIAYAN: They did.
MR. DRATEL: And those would be reflected in bitcoins, right?
JARED DER-YEGHIAYAN: It would.
MR. DRATEL: And also not $7 per bitcoin but by October 1st of 2013, bitcoin was at $100 per bitcoin, right?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: So that's fourteen times, right, the value?
MR. DRATEL: So if it was 3.5 million in July of 2012, just those 500,000 bitcoins -- not even including the other 16 months -- just that amount of bitcoins, it would be worth 70 million, right -- I'm sorry, 50 million?
JARED DER-YEGHIAYAN: That sounds about right, yes.
MR. DRATEL: 14 times three-and-a-half.
Now, if someone had cashed out those 500,000 bitcoins when bitcoins were at $250 per bitcoin, which occurred in the spring of 2013, right?
MR. TURNER: Objection. Form. Foundation.
MR. DRATEL: I haven't finished the question.
THE COURT: I think it is the hypothetical nature of it. Why don't you stick to what happened in this account?
MR. DRATEL: All right.
MR. DRATEL: Bitcoin, during the period that we were talking about before, October 1st, 2013, bitcoin peaked in the spring of 2013, correct?
JARED DER-YEGHIAYAN: Yeah, around April it did.
MR. DRATEL: To 250?
MR. DRATEL: $250 per bitcoin?
JARED DER-YEGHIAYAN: $250 a bitcoin.
MR. DRATEL: So that would make that 50 million one-and-a-half times more, right?
MR. DRATEL: 125 million?
JARED DER-YEGHIAYAN: If it -- yeah, if the volume stayed the same in bitcoins in the accounts, yes.
MR. DRATEL: Now, Silk Road made an estimate of $1.2 billion in sales, right, in the course of its -- from the government's investigation, Silk Road made $1.2 billion in sales, right?
MR. TURNER: Objection. Foundation.
MR. DRATEL: It is in the complaint, right?
MR. TURNER: Objection.
THE COURT: Do you know if bitcoin -- strike that.
Do you know if Silk Road is alleged to have -- strike that.
Do you know the volume of sales Silk Road had during the period of time that spans this investigation?
JARED DER-YEGHIAYAN: Only what was shared with me by the FBI.
THE COURT: Did you yourself look at any documents relating to the Silk Road website that indicated to you the volume of sales?
JARED DER-YEGHIAYAN: There wasn't anything directly on the website that would tell you what they -- what the volume was, but there was what came out of the FBI investigation on the server, that they came to that figure for the complaint.
THE COURT: Why don't you try it in a different way?
MR. DRATEL: I also move it under 801 as a -- well, not front of the jury.
THE COURT: We'll pick it up at our break.
BY MR. DRATEL:
MR. DRATEL: Anyway, so based on the information that was developed, the FBI concluded that Silk Road had made $1.2 billion in sales over the course of its lifetime, correct?
MR. TURNER: Objection. Hearsay.
THE COURT: All right. If he only knows about that from hearing about it from somebody else, then it would be hearsay.
Do you have any independent sources of information where you learned the volume of sales, either approximately or concretely, that occurred on Silk Road?
JARED DER-YEGHIAYAN: Other than what was shared with me from them, no.
THE COURT: All right. And that's hearsay. So --
BY MR. DRATEL:
MR. DRATEL: Did you ever read the complaint in this case?
THE COURT: That is hearsay, too, so it is not admissible evidence.
MR. DRATEL: Now, in November of 2012, you computed that Silk Road was earning $2 million a month in commissions, right, based on the value of bitcoin and the volume of sales that you were able to monitor during that period, right?
JARED DER-YEGHIAYAN: Sounds about accurate.
MR. DRATEL: And, again, back in 2012, bitcoin hadn't nearly even approached that $100 per bitcoin, right?
JARED DER-YEGHIAYAN: No. It was under $10, I believe.
MR. DRATEL: Right. So by the April of 2013, that same $2 million in commissions would have been worth a lot more, right? If it was about $10, it would have been worth ten times as much, $20 million a month in commissions with the same volume, right?
JARED DER-YEGHIAYAN: Well, the commission was based on the sales price, and the sales price would have fluctuated when compared to the value of bitcoin. So, I mean, it would have been relevant to the cost of the bitcoin.
MR. DRATEL: Now, that $144,000 -- I'm sorry, the 144,000 bitcoins that were seized from Mr. Ulbricht's laptop, right?
MR. DRATEL: They were worth $29 million at the time of seizure, right?
MR. DRATEL: And by November 18, 2013 -- withdrawn.
The price of bitcoins skyrocketed, as we talked about Thursday, right, after the arrest?
MR. TURNER: Objection. Timeframe.
MR. DRATEL: After October 1st, 2013, by the end of the year, between then and the end of 2013, bitcoin at one point exceeded $1,000 per bitcoin, right?
JARED DER-YEGHIAYAN: It went over a thousand dollars, yes.
MR. DRATEL: And as of November 18, 2013, that $29 million worth of bitcoin would have been worth $96.5 million, right?
MR. DRATEL: So anybody holding bitcoins during that period of six/seven weeks would have seen a 500 percent return, right?
JARED DER-YEGHIAYAN: That's accurate, yes.
MR. DRATEL: There was a significant amount of law enforcement activity devoted to investigating Silk Road, right?
JARED DER-YEGHIAYAN: Yes, there was.
MR. DRATEL: Multiple agencies?
JARED DER-YEGHIAYAN: There were multiple agencies involved, yes.
MR. DRATEL: Multiple United States Attorney's offices?
JARED DER-YEGHIAYAN: Multiple United States Attorney's offices.
MR. DRATEL: Multiple offices even with within your agency, Chicago, Baltimore, other places, right, New York?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: And you, as part of your investigation, and others, would try to -- withdrawn.
During the course of your investigation, you managed to gain control of a number of user accounts with Silk Road, correct?
JARED DER-YEGHIAYAN: Yes, I did.
MR. DRATEL: Most of them buyer accounts?
JARED DER-YEGHIAYAN: I mean, it was split up, buyer/vendor accounts, yes.
MR. DRATEL: So -- and you alone had more than a dozen, maybe even two dozen, that you could sign on to, right?
JARED DER-YEGHIAYAN: I had not that many, but I probably had like six or so that I created myself on the market, six or so that I created on the forums.
MR. DRATEL: No, not that you created, but also in addition to the ones you created, also the ones that you assumed control over when people either were arrested or voluntarily gave you access to their account, right?
JARED DER-YEGHIAYAN: That is correct.
MR. DRATEL: So that increases that number, doesn't it?
JARED DER-YEGHIAYAN: It does, yes.
THE COURT: So how many of those, approximately, did you have? You got the six that you created yourself?
JARED DER-YEGHIAYAN: Correct.
THE COURT: How many, approximately, did you take over in one form or another during the entire time that you were in the business of taking over accounts?
JARED DER-YEGHIAYAN: Approximately about a dozen.
THE COURT: All right. So you touched personally about 18 accounts?
JARED DER-YEGHIAYAN: That sound about right, yes.
THE COURT: All right.
BY MR. DRATEL:
MR. DRATEL: And you also told us, I think Thursday, that some of these accounts other agents had access to as well?
JARED DER-YEGHIAYAN: Some of them, yes, other agents I gave the username and password to.
MR. DRATEL: So you might be on one day and another agent might be on another day, right?
JARED DER-YEGHIAYAN: Not if it was being utilized in an undercover capacity. It would only be one agent utilizing it.
MR. DRATEL: And during this period of time, one of the reasons for taking over these accounts were to make the undercover purchases that you had talked about, right?
JARED DER-YEGHIAYAN: Oh, a few of them were used in that capacity, yes.
MR. DRATEL: So you made about 50 such purchases, right?
JARED DER-YEGHIAYAN: That was from one account, yes.
MR. DRATEL: And the purpose of those purchases was not to keep the site going, right?
JARED DER-YEGHIAYAN: No, it wasn't to keep the site going.
MR. DRATEL: But at the same time you are sending money overseas -- bitcoins overseas to drug dealers, who were pocketing that money, right?
JARED DER-YEGHIAYAN: It's going into, yes, their hands.
MR. DRATEL: And you don't really have access to them the way you would if someone who perhaps was in the United States doing the same thing even if you could identify them, right?
JARED DER-YEGHIAYAN: We have processes through MLAT that could give us reciprocity, especially with a lot of governments that we were dealing with at the time, to get legal action if we needed to.
MR. DRATEL: But at the time you were essentially, as part of the undercover operation, putting money into these drug dealers' pocket, right, without any recourse in the sense that they weren't being arrested, right?
JARED DER-YEGHIAYAN: We were doing that for the purpose of trying to arrest them.
MR. DRATEL: Right. But isn't that one of the reasons why the undercover buys stopped?
JARED DER-YEGHIAYAN: No. There was money that had to be allocated for those purposes, and at the time we just didn't have -- we stopped actually collecting seizures around April 2013, and then we stopped doing buys after that since we weren't collecting the seizures.
MR. DRATEL: And in those purchases that were made through the undercover accounts, you were also paying a commission to Silk Road, right?
JARED DER-YEGHIAYAN: That was something that was automatically taken out, yes.
MR. DRATEL: And you don't know whether that has ever been recovered, right?
JARED DER-YEGHIAYAN: I don't know if the exact bitcoins that we put in got recovered or not, no.
MR. DRATEL: Now, the government -- withdrawn.
You had administrative privileges in July of 2013 as Cirrus, right?
JARED DER-YEGHIAYAN: On the forum I did, yes.
MR. DRATEL: And the government, the U.S. government, got access to the Silk Road servers no later than July 23, 2013, right?
JARED DER-YEGHIAYAN: The FBI did.
MR. DRATEL: And the FBI could have pulled the plug right then because they had the servers, right?
JARED DER-YEGHIAYAN: I don't know what their capabilities were at the time.
MR. DRATEL: Well, they had the servers, correct? They physically had possession of the servers, if they wanted, correct?
MR. TURNER: Objection. Foundation.
THE COURT: Why don't you dig in a little more to what the FBI had and what this witness knows.
MR. DRATEL: As of July 2013, the FBI knew the location of Silk Road's servers, right?
JARED DER-YEGHIAYAN: They had an image that came back as a server.
MR. DRATEL: But they knew the location of where that server existed as a physical thing?
MR. TURNER: I object. As to this witness' foundation?
THE COURT: Why don't you investigate with this witness what he knows about the location.
MR. DRATEL: You know where the location was, right?
JARED DER-YEGHIAYAN: They had an up IP address for where they got the image that did come back as being Silk Road's server.
MR. DRATEL: But what I'm saying is you know where the servers were located, right?
MR. TURNER: Objection. Foundation.
MR. DRATEL: You know that --
MR. TURNER: Objection.
THE COURT: Sustained.
MR. DRATEL: -- from the investigation of the information that has been verified, right?
MR. TURNER: Objection.
THE COURT: Sustained. You need to ask it differently.
MR. DRATEL: During the course of your investigation you learned the physical location, the country, that those servers were located in, right?
MR. TURNER: Again, objection. Foundation.
MR. DRATEL: I am asking if he learned.
THE COURT: He can answer that yes or no.
JARED DER-YEGHIAYAN: Only from what I was told where they were at is what I knew.
THE COURT: Did you learn from any other source apart from what you were told? Did you see any written documentation about that, about the location of the Silk Road servers?
JARED DER-YEGHIAYAN: I did not.
THE COURT: All right.
BY MR. DRATEL:
MR. DRATEL: You were told by law enforcement agents to facilitate your investigation?
MR. TURNER: Objection to the hearsay.
THE COURT: Sustained.
MR. DRATEL: Under Rule 807 again, your Honor.
THE COURT: The objection is sustained.
BY MR. DRATEL:
MR. DRATEL: Did you know that the FBI knew where the location -- you knew that they were going to image the servers, correct?
MR. TURNER: Objection. Again, hearsay.
THE COURT: Well, let me ask you. Did you yourself ever -- did you have any personal involvement in the imaging of the servers?
JARED DER-YEGHIAYAN: No, I did not.
THE COURT: Did you receive written documentation that related to the imaging of the servers?
JARED DER-YEGHIAYAN: No, I did not.
THE COURT: All right. He is not the right witness for this so we'll do it through somebody else.
MR. DRATEL: Your Honor, I do have another question for him, which is:
MR. DRATEL: Didn't you tell FBI New York when to image the servers because when the traffic would be less, that the admins won't be on the site?
JARED DER-YEGHIAYAN: Is there a particular date that you are referring to? Is this later on when I had access to the control? If you could be more specific?
THE COURT: Did there come a point in time when you communicated with anyone else in law enforcement as to a date when the servers would be imaged, from your perspective?
JARED DER-YEGHIAYAN: I didn't have any involvement in the initial capture of the Silk Road server.
THE COURT: All right.
MR. DRATEL: I am going to show this for impeachment, your Honor. I show you 605, 3505-605.
THE COURT: Did you have any involvement in any of these subsequent captures?
JARED DER-YEGHIAYAN: Subsequent captures I might have, yes.
THE COURT: And the word "capture" there refers to the imaging of a server, is that right?
JARED DER-YEGHIAYAN: Right, the actual imaging.
THE COURT: All right.
BY MR. DRATEL:
MR. DRATEL: So you were informed that the FBI was going to, in your words, take down the servers, right?
THE COURT: Hold on. The question is -- for impeachment purpose, the question, for which it would be impeaching, is whether or not he told the FBI on a particular date to take down, not whether or not he learned of a takedown.
MR. DRATEL: All right. So on July 20 -- in July 2013, I think it is the 22nd, yes, 22nd of July 2013, you told the FBI a specific time to take down the servers, right?
JARED DER-YEGHIAYAN: There would be a time that --
MR. DRATEL: First let's answer that question.
Did you tell the FBI a specific time that would be a good time to take down the servers?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And that was because you said there wouldn't be a lot of administrative work on the site and so that -- is that right, there wouldn't be admins?
JARED DER-YEGHIAYAN: There wouldn't be administrative action on the site, yes.
MR. DRATEL: That was because you wanted it to be done in a way that nobody could notice, right, if possible?
JARED DER-YEGHIAYAN: I would think, yes.
THE COURT: Mr. Dratel, we are going to take a mid-afternoon break. Is this an OK time for you to stop?
MR. DRATEL: This is fine.
THE COURT: Ladies and gentlemen, let's take our mid-afternoon break. And I want to remind you not to talk to each other or anybody else about this case.
Thank you very much.
COURT CLERK: All rise as the jury exits.
(Continued on next page)
(Jury not present)
THE COURT: You can step down because you are on break as well.
(Witness not present)
THE COURT: All right. Let's all be seated and see what we've got.
In terms of the line of questioning relating to expertise, I think I had been clear that what the witness learned about in terms of expertise that was unconfirmed is what he learned unconfirmed. It won't be usable testimony for the purposes of saying X was a computer expert, but there will be ways of wording it that there was indications attached to his name. You will have to be very careful how that is used because it is not in for the truth.
Is there anything that you folks would like to raise right now?
MR. TURNER: Can I just make a record on that, your Honor?
THE COURT: Yes.
MR. TURNER: Because those statements aren't relevant for anything unless they are being offered for the truth. And the government objects to what the agent read on LinkedIn coming in for the truth. Anybody can create a LinkedIn page. Anybody can say anything they want about themselves on a LinkedIn page. That is why there are rules of hearsay that exist.
So the fact that he read it as plaintiff's word, it doesn't gift it any more legitimacy or doesn't make it any more admissible. And I just am afraid that -- I recognize your Honor wants to give a limiting instruction, but there is really no other relevance for it coming in except for the truth of it. So that is what the government has concerns about.
THE COURT: I understand the government's concern. My ruling stands. I think I have given them an instruction each time that this has occurred. The jury I think seems to nod knowingly. They understand the difference.
And, look, there are ways in which I think the limiting instructions are effective. You folks will have to be very cognizant of those limiting instructions when you decide how to use the information in your closing.
But your objection, Mr. Turner, is noted. The Court is trying, with many of the now very active evidentiary objections, to draw appropriate lines. The lines are sometimes lines where the question is not perfect but it is not so imperfect as to create a terrific issue if allowable, and that has been true on the government's direct examination as well. So I'm hopeful that people will after this witness get themselves into a routine where we just let each other do our thing.
But we'll take it as it comes. I mean, the objections, generally speaking, they have been appropriate and so they require rulings.
(Continued on next page)
THE COURT: Did you have anything to do before we take a break?
MR. DRATEL: Yes. On the complaint, just one sentence from the complaint about these figures, talking about Silk Road, these figures are equivalent to roughly 1.2 billion in revenue and 79.8 million in commissions at current bitcoin exchange rates. And this is from the complaint and it's from paragraph -- but it's an admission by a party opponent under 801.2(a), (b), (c) or (d). It fits all of them. It only has to fit one.
THE COURT: That is an interesting argument because you would never allow a whole variety of statements to be put in from a complaint with any evidentiary basis that were against the defendant. Typically, statements in complaints have no -- they have zero evidentiary value apart from what comes in by virtue of the trial. So I hear your point. I think that if you want to make a point about what kind of business was conducted on Silk Road --
MR. DRATEL: No. It's the numbers that the government said -- the government is going to take a dramatically different position at this trial.
THE COURT: It doesn't matter.
MR. DRATEL: But it does because it's an admission by them of a certain number and now they're going to do a much lower number; and the only reason they're doing a much lower number is because they want that number to mysteriously all of a sudden match what's in Mr. Ulbricht's computer as opposed to a number four or five times that.
THE COURT: Mr. Turner, why don't you address it?
MR. TURNER: I can address that. First of all, the complaint explained that the figures given were based on the present value of those bitcoins at the time of the complaint. At the time, we weren't able to convert the bitcoins so that they matched the value of the bitcoins at the time of each sale in question, so the value of bitcoins is fluctuating. So, you could have had ten bitcoins received by the site in 2012 that were worth a lot less than they would be when they were received for sale in 2013.
The complaint which is based on the total number of bitcoins that flowed to the site were converted to the value, the exchange rate of bitcoins at the time that the complaint was sworn because of our limitations that we had. The reason the figures were changed when we introduced the aggregate sales and aggregate profits from the site later on is because now we have a chance to go through the transaction of data more carefully.
Each transaction in the database records the number of bitcoins received and the value of those bitcoins at the time of each sale. That's what the data reflect.
THE COURT: Why don't you address --
MR. DRATEL: That's not a true value.
THE COURT: Hold on. Why don't you address the evidentiary issue as to whether or not this could be an admission of a party opponent?
MR. TURNER: It's not a statement against itself and it's not a statement of this witness, so all it is is a statement of a particular agent based on what he knew at the time.
MR. DRATEL: That's exactly what the rule requires. It doesn't require being against interest. The rule requires for (a) the party's own statement in either an individual or representative capacity; or (b) a statement of which the party has manifested an adoption or belief in its truth -- this is sworn under oath September 27, 2013 for the purpose of obtaining an arrest warrant against Mr. Ulbricht; (c) a statement by a person authorized by the party to make a statement concerning the subject; or (d), the statement by the party's agent or servant concerning a matter within the scope of the agency or employment made during the existence of the relationship. It qualifies under any of those.
MR. TURNER: None of these statements were made by this witness or any agent of this witness and this agent did not swear out the complaint, so it's not an admission by this witness.
MR. DRATEL: And I'm not asking that of this witness. I'm moving it independently --
THE COURT: You can't get it in through this witness every possible statement made by the government as an admission by a party opponent.
MR. DRATEL: By itself, it's admissible. In other words, by itself; it doesn't need a witness.
THE COURT: If it doesn't need a witness and it can be by itself admissible, I need some cases on that or a case or two, because in terms of the way this is -- we don't need it right now, right, because it can come in at any point in time.
MR. DRATEL: An admission is an admission.
THE COURT: You're using the complaint in a very unique way in terms of getting in an admission through a complaint. It's not typical; it's not typically the way complaints are used as you know, even when evidence is coming in contrary.
I will look at it, however. I have not looked that question before and given that it's not necessary to get it in through this witness, there's no urgency to doing it right now.
MR. DRATEL: I'll call Judge Maas if I have to, Magistrate Judge Maas. He signed the complaint. He read it. They came to him as the United States government. They're going to resist this, okay.
THE COURT: You know --
MR. DRATEL: We'll call the judge.
THE COURT: Whether or not any testimony on this would be relevant from a judge or from anyone I think is part of the question that I want to explore. So I need to investigate whether or not what you're suggesting is an admission, which is a statement in a complaint at the outset of a case when many things changed. It may be, Mr. Dratel.
MR. DRATEL: It's under oath.
THE COURT: I'm not suggesting it's not under oath. That's the best information at the time.
MR. DRATEL: But --
THE COURT: Hold on. I'm not suggesting you can't have it. What I'm suggesting is, if it doesn't have to come in through this witness, I need to look at it because I've never had an attorney try to use a statement from a complaint as evidence in a criminal proceeding because you certainly never want any of the evidence obviously against the defendant to come in.
MR. DRATEL: But that's not the point.
THE COURT: Even if there was evidence from a coconspirator, that there's a coconspirator statement recited in the complaint, you'd never want that in.
MR. DRATEL: That doesn't matter because if I was impeaching with grand jury testimony, I wouldn't put in the whole grand jury. I'd put in the part that impeaches the guy. That's neither here nor there. And the fact that --
THE COURT: Look, I need to look at this is what I'm suggesting.
MR. DRATEL: I'm also saying to you, the fact that a party changes its mind during the course of a litigation does not vitiate the fact that at one point it took that position under oath as a fact and that's an admission.
THE COURT: You know, you may be right. And it may be right in the sense other than for this particular witness or it may be right for another witness. I need to look at it. That's what I'm suggesting.
Is there anything else on this topic?
MR. DRATEL: No, your Honor.
THE COURT: I would take from anybody who would like to put in a letter any cases that they have supporting that position. Since it doesn't have to come in through this witness, it can come in tomorrow morning.
Anything else we need to deal with before we take a break?
MR. TURNER: Not from the government.
MR. DRATEL: No, your Honor.
THE COURT: Thank you. We'll take a short break and then come on back and stay until.
(Recess)
(In open court; jury not present)
THE COURT: Let's bring out the jury.
(Jury present)
THE COURT: Mr. Dratel, you may proceed, sir.
MR. DRATEL: Thank you.
BY MR. DRATEL:
MR. DRATEL: Based on your investigation, going back to Mr. Karpeles for a second, based on your investigation, what you were able to verify from your subpoenas, that silkroadmarket.org was being run off a web hosting company owned by Mr. Karpeles?
MR. DRATEL: Thank you. Now, I want to go back to July 22, 2013. And we talked about FBI access to the servers. Now, you knew that the imaging of the server, the Silk Road server was going to be done in the country where the servers were located, right?
MR. TURNER: Objection; foundation.
THE COURT: Why don't you establish what kind of knowledge he has about that and then you can take it step by step.
MR. DRATEL: Well, the FBI had the IP address for the Silk Road server, correct?
MR. TURNER: Objection; foundation.
THE COURT: Sustained.
MR. DRATEL: Have you seen documents from the FBI with respect to its knowledge either before --
MR. TURNER: Objection.
MR. DRATEL: -- either before or since with respect to --
THE COURT: I'll allow this.
MR. TURNER: Objection; hearsay.
JARED DER-YEGHIAYAN: I haven't seen documentation of an IP that I was told about it.
THE COURT: You did not see documentation about an IP address?
THE COURT: A server that allegedly had the Silk Road site resident on it?
JARED DER-YEGHIAYAN: Not that I recall, but I know they had an IP address.
THE COURT: Okay. All right.
MR. DRATEL: Now, at the time in July of 2013, when you told the FBI a good time to take down the servers, what did you mean by "take down"?
JARED DER-YEGHIAYAN: I know that they were -- they were going to do an image of it so they would have to take it offline. I was guessing they'd have to take it offline to image it.
MR. DRATEL: You didn't mean take down as in stop the servers from continuing to be used to sell drugs around the world?
JARED DER-YEGHIAYAN: No. I believe they were taking it down to image them to take a capture of it.
MR. DRATEL: But not to stop the site?
JARED DER-YEGHIAYAN: Not to stop it, no.
MR. DRATEL: In fact the site went on for the rest of July, August and September, right?
JARED DER-YEGHIAYAN: It did.
MR. DRATEL: All the while, the FBI had the image of the servers and the IP address for the servers, right?
JARED DER-YEGHIAYAN: They did.
MR. DRATEL: So there was a lot of pressure to get to the point to get to the point to take down the site entirely, wasn't there?
JARED DER-YEGHIAYAN: There was -- there was pressure from our management and from, yeah, from basically our management and from the people that are working with the U.S. Attorney's Office; yes.
MR. DRATEL: And nobody was comfortable with the FBI having all this information and this website selling drugs all over the world continuing to operate, right?
MR. TURNER: Objection; form.
THE COURT: Sustained.
You can ask him a little bit differently as opposed to everybody, your comfort level for everybody.
MR. DRATEL: Were you comfortable with having all this information and the site continuing to run unimpeded?
JARED DER-YEGHIAYAN: It's not a call for me to make. It's something that it's for the U.S. Attorney's Office to make.
MR. DRATEL: I'm not talking about the call. I'm talking about your comfort level with continuing to let the site operate.
MR. TURNER: Objection; relevance.
THE COURT: Sustained on those grounds.
MR. DRATEL: Wasn't there a discussion among agencies about that, about the need to do something about the site? You just said management was not comfortable with it. What was that? And this is not hearsay this is just for the fact that it was said.
MR. TURNER: Objection.
MR. DRATEL: This is not the investigation.
THE COURT: We have now --
MR. TURNER: Form and relevance.
THE COURT: We're going to change the question. You have a couple different questions embedded in there because you started off on one tact and then went to a different one. Restate the question.
MR. DRATEL: Okay.
MR. DRATEL: You said before in your answer that management had an issue -- there was pressure from management about letting the site continue to run. What was that pressure? How did it manifest itself?
MR. TURNER: Objection; relevance.
THE COURT: I'll allow that.
JARED DER-YEGHIAYAN: There was obviously a concern it wasn't necessarily a pressure, there was concern over -- there's pressure about wanting to shut down the site and do it properly, I mean, we want to do it and take down the site properly.
MR. DRATEL: What does that mean, "properly"?
JARED DER-YEGHIAYAN: Well, just by turning off a server doesn't completely shut down the site. If -- especially with like a Tor site, you would have to have ownership of it. You would have to have a key over it. If you don't have full control over it, someone can just pop it back up again on another server somewhere else. And if you don't arrest the person that's running it, then -- there, too, they can just reopen the site again and you let on your hand, you let on your investigation and you didn't really solve anything then at that point.
MR. DRATEL: In fact, Silk Road 2.0 was up and running by early November of 2013, right?
JARED DER-YEGHIAYAN: Silk Road -- there was a Silk Road 2.0; yes.
MR. DRATEL: And virtually identical service as Silk Road that was operated on those other servers, right?
JARED DER-YEGHIAYAN: It was very similar to Silk Road 1, yes.
MR. DRATEL: Now, with respect to closing the site down, there was discussion among law enforcement about doing it as early as May or June, right?
JARED DER-YEGHIAYAN: If there's a document you're referring to to help me recollect.
MR. DRATEL: Sure. It's marked as 3505-3004. I'd ask you to read the highlighted parts. You can read the rest of it if you want, but let me know when you're finished.
JARED DER-YEGHIAYAN: Okay.
MR. DRATEL: So, you had been told at one point that the FBI said it would take the site down in May or June of 2013, right?
JARED DER-YEGHIAYAN: That was a rumor that I heard from another HSI office.
MR. DRATEL: And you yourself on the 23rd, the very day that the sites were imaged, you said that they were -- you were getting close to taking the website and all the operators down, right?
JARED DER-YEGHIAYAN: We were making progress at that point, yes.
MR. DRATEL: Getting close?
JARED DER-YEGHIAYAN: Getting close.
MR. DRATEL: Now, when Silk Road 2.0 obviously was back up in early November, that was after Mr. Ulbricht's arrest, right?
JARED DER-YEGHIAYAN: It was.
MR. DRATEL: Now, as we've discussed, this investigation was being pursued by a number of different agencies in a number of different locations in the U.S., right?
JARED DER-YEGHIAYAN: It was.
MR. DRATEL: And internationally, too, right?
MR. DRATEL: And is it fair to say that there was some competition among agencies with respect to this investigation?
MR. TURNER: Objection; relevance.
THE COURT: Sustained.
MR. DRATEL: Weren't different agencies -- withdrawn.
HSI was pursuing it in Chicago, right?
JARED DER-YEGHIAYAN: Yes, we were suing Silk Road in Chicago.
MR. DRATEL: And also HSI Baltimore was pursuing it, right?
JARED DER-YEGHIAYAN: There was also an investigation of Silk Road within HSI Baltimore.
MR. DRATEL: And the Secret Service was involved in that, right?
JARED DER-YEGHIAYAN: There was a task force, yes.
MR. DRATEL: And HSI Baltimore and HSI Chicago didn't always see eye to eye, correct?
MR. TURNER: Same objection.
THE COURT: Overruled.
JARED DER-YEGHIAYAN: Can -- there was differences, but I mean, it was both going after similar targets at the same time.
MR. DRATEL: Right. But there were differences in how to do it and differences on who would get credit for it, right?
JARED DER-YEGHIAYAN: Well, there was differences on the work that we were putting in and how we were going after the targets. There's a different method for investigating -- they had different methods than what we did.
MR. DRATEL: And Chicago, and you in particular, were concerned that by giving out information to other locations, whether it's HSI or task force or others, would be compromising that information because it might be used in a way that would impair the confidentiality of the investigation?
JARED DER-YEGHIAYAN: There were concerns over how information would be disseminated if it was disseminated properly or if it or if it would be shared in ways that was outside of our knowledge.
MR. DRATEL: In fact, Chicago and Baltimore even had a meeting to try to resolve differences, correct?
MR. TURNER: Objection; relevance.
THE COURT: Sustained.
MR. DRATEL: Well, the differences in how to proceed between Chicago and Baltimore were so dramatic that there had to be a meeting, right, to try to resolve it?
MR. TURNER: Objection; relevance.
THE COURT: Sustained.
MR. DRATEL: There was a meeting between Chicago and Baltimore about the direction of the investigation and splitting responsibility responsibilities, right?
JARED DER-YEGHIAYAN: Can you be more specific on a time frame?
MR. DRATEL: Sure. February 2012, February 1, 2012?
JARED DER-YEGHIAYAN: That was -- the initial meeting that we had I believe with or around about the time -- February, you said 2012?
MR. DRATEL: Yes, uh-huh.
JARED DER-YEGHIAYAN: I believe that might have been a coordination meeting among multiple agencies.
MR. DRATEL: And Baltimore said at that meeting that it was shutting down Silk Road soon, right?
MR. TURNER: Objection; relevance and hearsay.
MR. DRATEL: Goes to the investigation.
THE COURT: Hold on. Let me think about it. I'll allow a few more of these. I think I know where you're going and it's not offered for the truth, so I'll allow it.
MR. DRATEL: Right.
THE COURT: You may proceed.
MR. DRATEL: So Baltimore said in February of 2012 that it was going to shut down Silk Road soon?
JARED DER-YEGHIAYAN: They -- I believe they said something similar, that they believed they could shut it down quickly.
MR. DRATEL: There was concern about Baltimore taking the information that you had gathered in Chicago and then issuing subpoenas for the same targets, right?
THE COURT: Why don't you -- just so we're clear and the record is clear, just ask him about his concerns as opposed to generalized concerns.
MR. DRATEL: Sure.
MR. DRATEL: One of your concerns was that your work product, in essence, that you had input into law enforcement computers was then being taken by other offices and they were issuing subpoenas and potentially compromising the investigation, right?
JARED DER-YEGHIAYAN: There's a proper procedure on how to disseminate information between law enforcement agencies, and one of the concerns if it isn't done through that proper procedure that it could then lead to duplication of efforts and other agencies pursuing other aspects outside of the investigation.
MR. DRATEL: And that was going on through 2012, correct?
JARED DER-YEGHIAYAN: There were concerns from time to time about things of that nature, yes.
MR. DRATEL: And another source of difference of opinion was whether or not Baltimore should meet with Mr. Karpeles' lawyers or meet with him?
MR. TURNER: Objection.
THE COURT: Sustained.
MR. DRATEL: You were frustrated a fair amount of the time by these problems, right?
MR. TURNER: Objection; relevance.
THE COURT: Sustained.
MR. DRATEL: Now, you were also worried that the New York office, the law enforcement in New York would somehow tip off the investigation of Silk Road, right?
JARED DER-YEGHIAYAN: Is there a particular time frame?
MR. DRATEL: Yes. August of 2012?
JARED DER-YEGHIAYAN: There was multiple -- a lot of things were going on with multiple agencies, there was a long period of time, and in between that at different points in time, different representatives from multiple agencies would contact me and contact us in a variety of ways and it wouldn't always come from just one source within the agency. It would come from other people from different locations.
So there was always concerns based upon what those particular agencies are doing when they're getting involved how far along their investigation is in compared to ours. So there was time periods along the way that we would have -- we would be concerned obviously about where an agency, if they were contacting us, where that would lead.
MR. DRATEL: So to get back to my question, you were concerned about New York in particular, correct?
MR. TURNER: Objection.
THE COURT: What was the objection?
MR. TURNER: Relevance.
THE COURT: I think I know where it's going, so I'll allow a few more of these, but why don't you get to where it's going so I'm not thinking the wrong thing.
MR. DRATEL: I'm trying.
THE COURT: Okay. Try to pull it in quickly; otherwise, I'll think that I've gotten your direction wrong.
JARED DER-YEGHIAYAN: Is this the New York OCDETF group you're talking about or just --
MR. DRATEL: Intel reports coming from New York -- intel reports from New York, right? There were intel reports issued by New York?
MR. TURNER: Objection; form, vagueness.
THE COURT: I'll allow that.
You may answer.
JARED DER-YEGHIAYAN: There was -- that had to do with a particular intel group that was based in the northern part of New York that was -- the seizures that we were taking in in O'Hare, they were trying to do deliveries and trying to do actions on those particular packages that were interfering with our investigation on the vendors as we were pursuing the vendors with those seizures.
MR. DRATEL: The problem was that an agent in New York was including your seizures on their intel report, correct?
JARED DER-YEGHIAYAN: They were including seizures that we were holding already for our investigation in a product that was used to disseminate seizures out to be used by other agencies.
MR. DRATEL: And you thought that putting -- and doing that, you thought could potentially jeopardize over a year's worth of investigation evidence, right?
JARED DER-YEGHIAYAN: By -- yes, by taking those seizures and put them out there falsely to other agencies to use them in different ways without letting me know about our investigation, yes, they can jeopardize it.
MR. DRATEL: Fast-forwarding to September of 2013, you were also concerned that Chicago HSI, once the focus was on Mr. Ulbricht, Chicago HSI might not get any place at the table with respect to this investigation, right, in terms of credit?
JARED DER-YEGHIAYAN: If there's a particular email that you can help me recollect my memory.
MR. DRATEL: Sure, 319. 3505-319.
JARED DER-YEGHIAYAN: Thank you.
THE COURT: So what's the question?
MR. DRATEL: I didn't know if he was finished reading it already.
JARED DER-YEGHIAYAN: Okay.
MR. DRATEL: September 20, 2013, you were concerned that the Southern District of New York would prosecute people allegedly involved in Silk Road without anyone else being involved in the prosecution, right?
JARED DER-YEGHIAYAN: Well, this was in reference to a meeting between Baltimore and Chicago at the time where it was going to be occurring where -- trying to make -- trying to basically include them in with the arrest with Ulbricht to share the information that we had from the New York case and find ways to bridge differences with your investigation. So this was something that was being discussed between a manager and I about just some of the different ways that we could approach that and how it could be perceived after the take-down.
MR. DRATEL: Wasn't one of your concerns --
THE COURT: Mr. Dratel, are you close to the line of questioning or should I get a proffer on relevance, because I don't think I was correct.
MR. DRATEL: I'm close to the end. That's fine.
THE COURT: A question or two?
THE COURT: Why don't you come over to the side bar and let me know the relevance and see if I'm on the same page.
(Continued on next page)
(At the side bar)
THE COURT: I just wanted to get a sense of the relevance. I have in my mind where I think you could be going, but I also think I may be wrong. Otherwise, I don't see how it's relevant.
MR. DRATEL: It's about the progress of the investigation and the fact that at a certain critical point, once Mr. Ulbricht was on the radar of the Southern District of New York, that everyone else had to fall in line or else they would not be permitted to participate, and that ultimately -- and this is all in the 3500 -- he says to his supervisor or his whoever he is talking to, he says and these -- he's talking about Baltimore -- he said basically unless people do it the way the Southern District wants, that they can whine all they want, but it won't stop SDNY from prosecuting all of them without any of us.
THE COURT: My ruling is that's irrelevant. I had a different version. That's not where I thought you were going.
MR. DRATEL: It is relevant.
THE COURT: It's not relevant. It's not relevant.
MR. DRATEL: Once Mr. Ulbricht came on the radar, everything else was shunt to the side because the Southern District was going to get its way and these people had to --
THE COURT: My ruling is that's not relevant. I had a different version or view.
MR. DRATEL: Which is?
THE COURT: I'm not going to give you your relevance --
MR. DRATEL: Conspiracy theories?
THE COURT: It was about ten questions ago, I thought you were going someplace else, so I allowed this but that's not relevant.
MR. TURNER: There's also a reference to Mark Karpeles to the document shown to him and I'm worried about defense counsel asking questions about how Mark Karpeles was stalling the investigation, how they were going to Mark Karpeles again.
THE COURT: We're going to leave this line of questioning. Thank you.
MR. DRATEL: You said "this line of questioning." I also was going to ask him because subsequently to all of this at the end of the September, he is invited by the Southern District to participate in the arrest of Mr. Ulbricht, it's basically like a largess by the Southern District and he recognizes that a hundred percent.
THE COURT: Also irrelevant.
MR. DRATEL: I think it is.
(Continued on next page)
(In open court; jury present)
BY MR. DRATEL:
MR. DRATEL: Now, with regard to competition -- withdrawn.
With regard to agencies and the arrest of Mr. Ulbricht, afterwards wasn't HSI Chicago concerned about having the HSI banner be on the seizure at some point?
MR. TURNER: Objection; form and relevance.
THE COURT: Sustained.
MR. DRATEL: Now, you spent thousands of hours on Silk Road you said, right?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: As a supposed buyer, right: In other words, utilizing buyer accounts, utilizing seller accounts?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: As an administrator?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And the first time you heard Ross Ulbricht's name was either September 10 or September 11 of 2013, right?
JARED DER-YEGHIAYAN: Around that time frame.
MR. DRATEL: You had been investigating the site for two years, right?
MR. DRATEL: And many of these accounts that you took over were from back of 2012, right, or the ones that you even started, many of them go back to 2012, right?
JARED DER-YEGHIAYAN: Some of them do, but I mean, if there were accounts taken over regularly, even in 2013.
MR. DRATEL: Now, there were other federal agencies investigating as we talked about, right?
JARED DER-YEGHIAYAN: There were other agencies investigating; yes.
MR. DRATEL: And in the manner we discussed, they shared their work product with you, right?
JARED DER-YEGHIAYAN: A lot of them did; yes.
MR. DRATEL: And do you know about state and local enforcement? Do you know how many accounts they had running on Silk Road?
JARED DER-YEGHIAYAN: I have no way of knowing.
MR. DRATEL: Do you know how many other federal agencies, how many accounts they were running on Silk Road?
JARED DER-YEGHIAYAN: We had a method to try and deconflict that through a headquarters component.
MR. DRATEL: What was the total amount of accounts that the federal law enforcement community was running on Silk Road, U.S. federal?
JARED DER-YEGHIAYAN: I don't know the total number, but we could submit a name and just see if it -- if anyone else was either looking at it or was aware of.
MR. DRATEL: So you don't know how many?
JARED DER-YEGHIAYAN: I don't know how many; no.
MR. DRATEL: And how about by foreign law enforcement, other countries that could have been looking into Silk Road? Do you know how many accounts they were running?
JARED DER-YEGHIAYAN: I do not know.
MR. DRATEL: You used other facets of your investigation, too, right, right?
MR. TURNER: Objection; form.
MR. DRATEL: In pursuit of your investigation you used a lot of materials, right, a lot of methods, right?
THE COURT: Why don't you restate that. You have methods, materials, facets.
MR. DRATEL: You had a lot of methods in your investigation, right?
JARED DER-YEGHIAYAN: Used as many investigative methods as possible.
MR. DRATEL: And as many sources as possible, right?
JARED DER-YEGHIAYAN: As many sources as we could; yes.
MR. DRATEL: So that's subpoenas and search warrants, right?
JARED DER-YEGHIAYAN: We used subpoenas and search warrants, yes.
MR. DRATEL: Confidential informants?
JARED DER-YEGHIAYAN: And confidential informants.
MR. DRATEL: What's a Tecs, T-E-C-S? What's a TECS?
JARED DER-YEGHIAYAN: It's the name of the program, not the program, the system that Customs and Immigration uses for their databases.
MR. DRATEL: Did you use that as well?
JARED DER-YEGHIAYAN: Yes, I did.
MR. DRATEL: And you also had help from people who had expertise in computers and bitcoins and Tor help you as well, right?
JARED DER-YEGHIAYAN: We had confidential informants and other people that we would talk to from time to time.
MR. DRATEL: And when you gained access to these accounts, one of the purposes was to try to find the identity of DPR, right?
JARED DER-YEGHIAYAN: If possible, yeah; that was one of the main priorities.
MR. DRATEL: And you had substantial contact with DPR, right?
JARED DER-YEGHIAYAN: After acquiring the cirrus account, yes.
MR. DRATEL: But you also had a chance to look at all of his forum posts and everything else that was available on the site, right?
MR. TURNER: Objection to form; "everything else available on the site."
THE COURT: Hold on.
You can restate.
MR. DRATEL: Forum posts, you had access to that, correct?
JARED DER-YEGHIAYAN: To the ones that were available to my account, yes.
MR. DRATEL: And also once you got on the site in 2012, you had access to the forums, right?
JARED DER-YEGHIAYAN: Yes, but there was a limited access depending upon your user role as to how much you could see under that user role.
MR. DRATEL: Okay. And then did you increase that user role over time?
JARED DER-YEGHIAYAN: I did.
MR. DRATEL: And finally you were administrator, right?
JARED DER-YEGHIAYAN: That's correct.
MR. DRATEL: During all of that time until September 10, Mr. Ulbricht never appeared on your radar?
JARED DER-YEGHIAYAN: He did not.
MR. DRATEL: Until a digital trail presented him to you on a silver platter, right?
JARED DER-YEGHIAYAN: Until Special Agent Gary Alford brought it to my attention, Mr. Ulbricht was not part of my investigation.
MR. DRATEL: And this is late September 2013, right, after -- five months after Mark Karpeles is put on notice of a federal investigation based on a seizure of his accounts at Dwolla, right?
MR. TURNER: Objection to the "late September." It misstates prior testimony.
THE COURT: It has a couple of objections.
Why don't you restate. Let's not put argument in there.
MR. DRATEL: Mr. Karpeles was on notice of a federal investigation as a result of the May 2013 seizure of his accounts as we discussed on Thursday, right?
JARED DER-YEGHIAYAN: Yes, for the money seizure, yes.
MR. DRATEL: And Ross Ulbricht comes on your radar three and-a-half months later, right, maybe four months?
JARED DER-YEGHIAYAN: In September of 2013.
MR. DRATEL: May, June, July, August.
Nothing further. Thank you?
THE COURT: All right. Thank you.
Mr. Turner.
MR. TURNER: Thank you, your Honor.