18/09/2014
Nearly a year after federal authorities brought down the drug trading marketplace known as the Silk Road and arrested its alleged creator Ross Ulbricht, two Silk Road cases are coming to a close while Ulbricht’s own case is just about to start.The Silk Road’s downfall began in January 2012, when federal authorities arrested a Silk Road drug trader named Jacob Theodore George IV. George assisted federal authorities for the next year and half as they built a case to bring down the Silk Road and arrest the website’s creator, known as the Dread Pirate Roberts. In October 2013, authorities seized the Silk Road’s servers and arrested Ulbricht in a library in San Francisco, claiming he was the mastermind behind the drug trafficking website. Three months later, federal authorities arrested former BitInstant CEO and Bitcoin foundation member Charles Shrem and underground Bitcoin exchanger Robert Faeilla in connection to a $1 million Silk Road money laundering scheme.All three cases had big developments this week. On Thursday, Shrem and Faeilla each pleaded guilty to a charge, which could land them in prison for up to five years. On Friday, Ulbricht pleaded not guilty to the latest three charges filed against him, and George was sentenced to six years in prison and three years of supervised release.USA vs. Shrem and FaeillaOn Friday, Shrem plead guilty to one count of aiding and abetting the operation of an unlicensed money transmitting business. Faeilla, who is also known as “BTCKing,” pled guilty to one count of operating an unlicensed money transmitting business.The two men allegedly worked together on a money laundering scheme between 2011 and 2013. According to the release, Faeilla filled orders for Bitcoin through Shrem’s company in New York, which allowed customers to make the cash-for-Bitcoin exchanges anonymously for a fee. After getting Bitcoin from Shrem, Faiella sold Bitcoin to Silk Road users at a profit. By the end of their time working together, the two men had allegedly exchanged nearly $1 million in cash for Bitcoin.Shrem and Faeilla will be sentenced on January 20, 2015, and could face up to five years in prison.USA vs. UlbrichtOn Friday, Ulbricht’s lawyer Joshua Dratel confirmed that his client had pleaded not guilty to additional drug and identity theft charges that had been filed against him two weeks ago.“Pleading not guilty today was consistent [with] my client’s stance from the beginning of the case,” said Dratel in a statement. “This Superse …
