Silk Road’s mastermind Ross Ulbricht has his appeal nixed

Maria Nikolova

The Second Circuit U.S. Court of Appeals has agreed with the District Court that data collected from three pen/traps is not “newly discovered”, meaning Ulbricht’s motion based on that evidence would be futile.

Nearly one year has passed since Ross William Ulbricht, also known as Dread Pirate Roberts, the mastermind of Silk Road, the notorious marketplace that used Bitcoins for its transactions, appealed a number of decisions by Judge Katherine B. Forrest of the New York Southern District Court.

Ulbricht appealed the decisions of Judge Forrest dated February 5, 2018 and February 21, 2018. In these instances, the Judge denied the motion to extend time for a Rule 33 motion and a petition for a rehearing . Explaining her motives for making the judgement, Judge Katherine B. Forrest said: “A rule 33 motion is not an opportunity to re-litigate that which has been litigated, or to engage in a fishing expedition for new evidence”.

Earlier this week, the Second Circuit U.S. Court of Appeals published a Summary Order and Judgment in the appeal case. The orders of the lower court were affirmed.

Let’s recall that, in February 2015, a jury convicted Ulbricht of various counts stemming from his founding and operation of an online black market called “Silk Road,” which facilitated the sale of millions of dollars of illegal goods and services. Before trial, Ulbricht moved to exclude evidence obtained pursuant to five “pen/trap orders”. These orders allow the Government to, among other things, record the IP addresses associated with users of specific networks and the websites they visit. The district court denied Ulbricht’s motion to suppress this evidence.

In February, 2018, Ulbricht moved for an extension of time to file a motion for a new trial based on newly discovered evidence pursuant to Federal Rule of Criminal Procedure 33.

Ulbricht offered three justifications for an extension.

First, his attorneys had not yet received the client file from trial and appellate counsel, who had for eight months refused to gather those materials unless someone paid them to do so.

Second, Ulbricht was simultaneously seeking pen/trap data that had not been turned over before trial. Along with his motion for an extension, Ulbricht moved for a partial unsealing of magistrate files that should contain details about three pen/traps that the magistrate ordered during the investigation. The Government represented before trial that it had produced all relevant pen/trap data, but it had not produced the data in these three files, despite apparently relying on that data in its application for a search warrant for Ulbricht’s laptop and residence. The Government had also recently agreed to turn over some unspecified other pen/trap data.

Third, a recently published book—American Kingpin by Nick Bilton—reported that FBI agents used the pen/trap to determine Ulbricht’s location inside his home.

The district court denied the motion for an extension, holding that the evidence Ulbricht hoped to acquire would not be “new evidence” under the law, so any motion based on that evidence would be futile. It then denied as moot the motion to unseal the magistrate’s files.

On February 20, 2018, Ulbricht filed a motion for reconsideration. The district court denied that motion on February 21, 2018. Then an appeal followed.

The Court of Appeals agrees with the district court that the data collected from the three pen/traps is not “newly discovered” under Rule 33, meaning a motion based on that evidence would be futile. Accordingly, the Court of Appeals finds the denial of Ulbricht’s motion for an extension was not an abuse of discretion.

Ulbricht argues that the data from the three pen/traps is newly discovered because the government claimed before trial that all unproduced data from the pen/traps was immaterial, which prevented Ulbricht from obtaining the data. He also notes that the purported revelation in American Kingpin that FBI agents were using these pen/traps to track his actual location in his house makes this evidence potentially more material. However, the Court of Appeals finds that it is undisputed that Ulbricht knew about these three pen/traps, and Ulbricht does not claim that the warrant applications that cite data collected from those pen/traps were unavailable prior to trial.

As to American Kingpin, new information about old evidence – evidence that was available before trial and could have been obtained with the exercise of due diligence – does not change the fact that the old evidence itself was known and could have been obtained with the exercise of due diligence. Ulbricht knew about the pen/trap data. That is the end of the inquiry.

The Court of Appeals also agrees that nothing in Ulbricht’s prior counsel’s files could possibly be “newly discovered” evidence. The district court therefore did not abuse its discretion in finding that Ulbricht had not shown good cause for an extension on this ground.

The Court of Appeals has considered all of Ulbricht’s contentions on appeal and has found in them no basis for reversal. For the foregoing reasons, the orders of the district court were affirmed.

Read this next

Metaverse Gaming NFT

Despite crypto winter, Fastex grabs $23.2 million in Fasttoken token sale

Fasttoken, part of the Fastex web3 ecosystem, has secured $23.2 million in financing through the private and public token sales of its native cryptocurrency Fasttoken (FTN).

Digital Assets

Iran to repay Russian debts in gold-backed stablecoins

A high-ranking member of the Russian parliament confirmed reports that his country was in talks with Iran to create a stablecoin for foreign trade settlements, to replace the dollar, ruble and Iranian rial.

Digital Assets

SEC denies Cathie Wood’s bitcoin ETF for second time

The approval of a regulated crypto derivative is still looking far less likely, as the US regulators have once again denied Cathie Wood’s application for a long-awaited spot bitcoin exchange-traded fund (ETF).

Executive Moves

Pavel Spirin promoted to Scope Markets CEO following Rostro acquisition

Belize-based FX and CFDs brokerage Scope Markets has promoted Pavel Spirin to take on an expanded role as the company’s chief executive officer. He replaces the outgoing CEO Jacob Plattner, who has also been a major shareholder since he resigned his position as managing director at GKFX.

Retail FX goes all-in on alternative investing, launches Rare Sneaker Portfolio

“The concept of curated Portfolios means that our members will be able to invest in categories like art, trading cards, royalties, and real estate without needing to become subject matter experts on individual assets.”

Industry News

State Street taps AWS and Microsoft for cloud and infrastructure solutions

“By standardizing and simplifying our technology operating model, we will be able to more quickly deploy client environments and launch new products and services, while continuing to enhance the resiliency of our technology environment and our business operations.”

Institutional FX

Bitpanda launches Investment-as-a-Service business for banks, fintechs, online platforms

“Financial institutions today have to ask themselves how they aim to cater the increasing demand for modern investing solutions. Building these Individually, means a high startup cost, and products that are often outdated before they are even launched.”

Institutional FX

Options expands market data feeds after partnership with Tools for Brokers

“Our integration with ACTIV Financial marked the beginning of a new era in market data availability and infrastructure. Our teams have come together to provide unparalleled, fully managed market data services alongside Options’ global connectivity and infrastructure.”

Industry News

Recruitment in financial services sector buoyant despite planned mass layoffs

“It remains to be seen what impact this will have on hiring levels within the financial services arena this quarter”, said APSCo, regarding the expected mass layoffs within the financial services sector in England & Wales.