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12/04/2015

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Senior advisor to operator of shuttered 'Silk Road' website arrested in Thailand

NEW YORK CITY — A Canadian man, who is alleged to have been a close confidante of the operator of the Silk Road website helping to grow the site into an extensive criminal enterprise, was arrested in Thailand Thursday and is pending extradition to the United States.

Roger Thomas Clark, 54, a citizen of Canada, was arrested on charges that he acted as a senior adviser to Ross Ulbricht, aka "Dread Pirate Roberts," aka "DPR," the owner and operator of the Silk Road website, an online illicit black market that operated from January 2011 until Oct. 2, 2013.

The arrest and unsealing of the charges were announced by the following agency heads: U.S. Attorney Preet Bharara, Southern District of New York; Diego Rodriguez, assistant director-in-charge of the FBI in New York; James M. Gibbons, acting special agent-in-charge of U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI) in Chicago; James J. Hunt, special agent-in-charge of the Drug Enforcement Administration (DEA) in New York; and Shantelle P. Kitchen, special agent-in-charge of the Internal Revenue Service's Criminal Investigation (IRS-CI) in New York.

"Silk Road was a secret online marketplace for illegal drugs, hacking services, and a whole host of other criminal activity," said Bharara. "Like a consigliere, Roger Thomas Clark allegedly served as a trusted confidante to Silk Road founder and operator Ross Ulbricht, advising him on all aspects of this illegal business, including how to maximize profits and use threats of violence to thwart law enforcement. Thanks to the investigative work of our fellow law enforcement agencies and our international partners, Clark is in custody and awaits American justice."

"Roger Clark, a high-ranking Silk Road operator, served as Ross Ulbricht's closest adviser and confidante as together they facilitated an anonymous global black market for all things illegal," said Gibbons. "As this arrest proves, the 'long arm of the law' has a great reach – even in cyberspace. Our HSI special agents continue to work closely with our federal and international law enforcement partners around the world to patrol the darknet and protect public safety."

"The arrest of Roger Thomas Clark shows again that conducting criminal activities on the Dark Web does not keep a criminal out of law enforcement's reach," said Rodriguez. "As alleged, Clark was paid at least hundreds of thousands of dollars to act as a counselor to Ross Ulbricht's black-market bazaar, Silk Road. Clark may have thought residing in Thailand would keep him out of reach of U.S authorities, but our international partnerships have proven him wrong. We thank our law enforcement partners who have worked with the FBI on this case."

"Anonymity is what Roger Thomas Clark believed he attained posing as 'Variety Jones' while allegedly committing crimes; but handcuffed and pending extradition is not anonymity," said Hunt. "I commend and thank law enforcement's tenacious investigative skills and coordination throughout this investigation."

"Although the conviction of Ross Ulbricht effectively brought an end to the operation of the Silk Road site, this complaint represents another step in bringing full closure to the investigation of this criminal enterprise," said Kitchen. "IRS Criminal Investigation remains committed to bringing our expertise in conducting complex financial investigations to the investigation of narcotics organizations of all types, including those operating in the anonymity of cyberspace."

According to the allegations contained in the criminal complaint[1] unsealed Friday in Manhattan federal court, and evidence submitted at trial and in court filings during the prosecution of Ross Ulbricht:

  • Ulbricht created Silk Road in January 2011, and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013. Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet, serving as a sprawling black-market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site's users. While in operation, Silk Road was used by thousands of drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to more than 100,000 buyers, and to launder hundreds of millions of dollars deriving from these unlawful transactions.
  • Silk Road enabled its users to buy and sell drugs and other illegal goods and services anonymously and outside the reach of law enforcement. Silk Road was operated on what is known as "The Onion Router" or "Tor" network, a special network of computers on the Internet, distributed around the world, designed to conceal the true Internet Protocol addresses of the computers on the network and thereby the identities of the network's users. Silk Road also included a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.
  • Clark, who went by the online nicknames "Variety Jones," "VJ," "Cimon," and "Plural of Mongoose," was described by Ulbricht as a trusted "mentor," who regularly advised him on managing the Silk Road enterprise. Clark counseled Ulbricht on improving and expanding Silk Road's technical infrastructure, including helping Ulbricht hire and manage a computer programmer to assist with these projects. Clark also helped Ulbricht develop and enforce the rules governing how Silk Road vendors and users could do business on the site, which were designed to maximize the commissions that Ulbricht received from Silk Road sales.
  • Clark further advised Ulbricht how to conceal his involvement in, and hide his profits from, the operation of Silk Road, including helping Ulbricht devise cover stories to tell others and make plans to obtain foreign citizenship and offshore bank accounts. Finally, Clark advised Ulbricht on tactics to thwart efforts by law enforcement to investigate Silk Road and repeatedly advocated the use of intimidation and violence to keep members of the Silk Road support staff from cooperating with law enforcement. In one such conversation, in which Clark and Ulbricht discussed "track[ing] down" a certain Silk Road employee to ensure that he had not gone "[o]ff the rails," Clark commented, "[D]ude, we're criminal drug dealers – what line shouldn't we cross?"
  • Clark was paid at least hundreds of thousands of dollars for his assistance in operating Silk Road.

Clark is charged with one count of narcotics conspiracy, which carries a maximum sentence of life in prison and a mandatory minimum sentence of 10 years, and one count of money laundering conspiracy, which carries a maximum sentence of 20 years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence imposed on the defendant will be determined by the court.

Mr. Bharara praised the outstanding joint efforts of the FBI and its New York Special Operations and Cyber Division, HSI Chicago-O'Hare, DEA's New York Field Division, and IRS-CI's New York Field Office. Mr. Bharara also thanked HSI Attaché Bangkok, Thailand, the Royal Thai Police and the U.S. Department of Justice's Office of International Affairs for their support and assistance.

This case is being prosecuted by the Office's Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Timothy Howard and Richard Cooper, Southern District of New York, are in charge of the prosecution.

The charges contained in the complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.

[1]As the introductory phrase signifies, the entirety of the text of the complaint, and the description of the complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

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Last Reviewed/Updated: 03/11/2016