UNITED STATES OF AMERICA v. ROSS WILLIAM ULBRICHT Trial Transcript

Page 1 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA, v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant. ------------------------------x New York, N.Y. January 13, 2015 9:20 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York SERRIN A. TURNER TIMOTHY HOWARD Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal Linda Moreno, Defense jury consultant Page 2 THE CLERK: In the matter now on trial, the United States of America versus Ross William Ulbricht, 14 Cr. 68. Counsel, please state your names for the record. MR. TURNER: Good morning, your Honor. Serrin Turner for the government. With me at counsel's table is A.U.S.A. Timothy Howard, FBI Agent Vincent D'Agostino and two paralegals from our office, Nicholas Evert and Molly Rosen. MR. HOWARD: Good morning, your Honor. THE COURT: Good morning. All right. I am just getting Mr. D'Agostino. I see he is over here. OK. Terrific. MR. DRATEL: Good morning, your Honor. Joshua Dratel for Mr. Ulbricht, who is standing beside me. With me at counsel table is Lindsay Lewis, of my office, Joshua Horowitz, and also Linda Moreno, who is an attorney who is assisting us with jury selection. THE COURT: All right. Good morning to all of you. COUNSSEL: Good morning, your Honor. THE COURT: We've got a couple of housekeeping matters to raise right now and then we'll take whatever issues you folks may have in addition. We're going to get the jury, I think, the panel, about 10 o'clock. That is my guess. The reason for the delay is while we've got our own set of folks, there is another very significant case that is picking a jury today as well, and so there is a lot of folks coming in downstairs. And when we do that, the plan is if all 91 or 92 show up, we'll take about 60, who will fit in a this room, or so, and they will come in and we'll then start from there. So we'll have actually a group of some number, if we get full attendance, who will stay in the other room for a period of time. Page 3 All right. Now, one thing that I want to make sure you folks all realize is that while a lot of letters come into the Court's email, copied to both sides, unless they are under seal, we've got to make sure, for purposes of the overall record, that everything is on the docket. We've done our best to try to ensure that whatever we've received, if it is under seal, that it has been placed in the sealed vault. If it is ex parte it is also placed in the sealed vault with a notation of that, and if it belongs on the docket because it does not require being under seal, which should be everything possible, then that belongs on the docket. So I want to have you folks take individual responsibility for ensuring that whatever you have sent to the Court is appropriately captured in that universe. In other words, there should be nothing which you think I have in a file in my office. All right? Because if one day somebody has to reconstruct the file, I want them to be able to reconstruct it in its entirety. So we've done what we can. Going forward, it will be easier but let's just get all ourselves reconciled in that process. Page 4 Now, there is one open item from Mr. Dratel's letter of January 9th. I did not receive a response from the government, that I'm aware of, relating to the oral presentation of the Internet evidence. Mr. Turner. MR. TURNER: Your Honor, our position would be these are records just like any other records. They can be read to the jury. You have wire transcripts that are often read to the jury. This is not an unusual situation. And I don't even know how mechanically we would work it so that you would type these chats out and have them shown to the jury that way. THE COURT: Let's back up a little bit. It is typically the case that wires are in their -- you've got your line transcriptions and they will be highlighted, and the government typically has the agent recite what is on the screen, or whichever witness is -- sometimes it is a cooperating witness who was a party to that, just to literally read out the words on the page. That is a different process from what I understood you folks were proposing here, which was to have two folks basically be the voices, if you will, of the Internet communications. So let's separate out the two because, as I understand it, the thrust of the letter is towards this back and forth between these voices, the two voices, as opposed to the first, more typical way, which is on the screen. So as to the two voices, are you folks willing to forgo that and let's see if we can narrow this, and then we will get Mr. Dratel's position on doing it the traditional way? Page 5 MR. TURNER: Well, your Honor, I certainly -- I mean, I myself have had cases with wires, for example, where the transcripts were read in exactly that way, with two parties, one reading one voice, the other reading the other. I think it makes it easier for the jury to understand rather than have the whole thing in one person's voice. I think your Honor already addressed this issue of, you know, inflection and that sort of thing in terms of reading it in an unfair way. I really don't think that will happen, but that is something the Court can address at that time, if it does happen. We are simply -- I should just clarify, I think we're only planning on doing that where we have lengthy chats that we may not have -- we may not introduce in the course of a particular witness' testimony but read them after a witness testifies. So I think there will be a number of chats where we read the whole thing in, because it is, you know, only half a page and we don't do the two-person reading of the document. But for lengthy interchanges I think it will make it easier for the jury to understand. I really don't think it would be prejudicial to the defendant in any way. If that circumstance does arise, the Court can at that time decide maybe to do it differently. I don't think it will be a problem. THE COURT: I hear that position. The defendant has presented, I think, an issue that's different from that, which is that wires are a type of intended oral communication and that the written chats, while they are called "chat," which has an oral connotation, the written chats were not necessarily intended to be orally communicated and so that there is a difference between the two. And there might be a way in which the jury then is brought to believe a particular -- or have a particular view of the chat when it is rendered into oral comment. Page 6 MR. TURNER: So it seems to me there are two issues. If that is the issue, that it is a written communication, I really don't think that is an issue because all the time you have letters, you have contracts, you have all sorts of documents that are constantly used as evidence at trial, and it is absolutely routine to read from those documents, you know, even in their entirety sometimes. Just because it was originally written doesn't mean you can't communicate it to the jury orally in some way. THE COURT: That is exactly, Mr. Turner, why I was separating out the two issues, which is what I was calling the typical way, which is that written things are communicated orally but not through, as I understood it, a paralegal or two paralegals who were going to not act the part, because they would simply be reciting the words, but for purposes of this discussion act the part. Page 7 MR. TURNER: Right. It seems to me there are two issues. One, should a written communication be transmitted orally? To me, I think the answer is clearly yes. It happens all the time. The other issue is is there some danger of unfair prejudice if you have parties reading it in this way that they will engage in certain inflections or that sort of thing. I believe the Court has already sufficiently addressed that. So our position would be we should proceed as we originally planned, and if for some reason the evidence is introduced in a prejudicial way, we address that at that time, but I don't think there is any reason to expect or anticipate that at this point. THE COURT: All right. Mr. Dratel, let me have you address also these two buckets that I've separated the issue into. One is having this proceed in what I would call the typical fashion of it. There is a written document. It is on the screen. Either one or sometimes the prosecutor will with a witness do a back and forth and that is very typical, and that is different in the Court's view of potentially from what I am for purposes of this discussion calling the paralegal version. MR. DRATEL: This is different in the sense that it is not an isolated letter or paragraph or something like that, which, by the way, if someone objected to, it might be appropriate in the context of the case. So I am not suggesting that because things are done traditionally that somehow it wouldn't necessarily also be subject to the same type of problem if in fact the communications were designed for a certain type of absorption by the recipient. Page 8 In this instance it is very much the case that chats are designed to be absorbed through reading, not through hearing. So there are a couple of problems. One, the Court has already identified the distinction between transcripts of conversations that are oral to begin with and these chats. One is that there are a fair number of nonverbal parts of these communications, symbols, emoticons, things like that, all of that which is not necessarily communicable in an oral context. The second part is that these -- the way that a person perceives and absorbs the information is very much tied to the medium that it is in. So to hear it may mean that the jury is not reading it, and they really ought to read these. These were meant to be read. They are a written medium, and it is a new -- it is different. It has evolved over time. So that it is not a letter that people often read aloud in the context of a group. You don't have that in a chat context. It is not the way they exist. It is very personal. It's very intimate on a certain level, and it is designed for that medium in a way that letters do not replicate in any way. And I think that, again, because of also just the elements in there that aren't verbal, and we want the jury to absorb them in the way that they were provided to be absorbed and not to hear it and not to read it from the screen. Page 9 Also, these chats will be in evidence so it is not an issue of the jury's access to them. They can read them on the screen. Often we have transcripts on the screen that juries follow along while they are hearing them because sometimes they are not even audible so they read them more than hear them to begin with. So juries are not -- it's not an unusual issue for a jury to read a document rather than to hear it. It is not -- I mean, in the sense that oftentimes it is simultaneous. Here we are saying it shouldn't be simultaneous, it should be exclusive for purposes of reading. THE COURT: All right. So here is what my ruling is at this point in time, and we can reassess this ruling if and how this plays out there is a need to reassess it and it becomes obvious that things should change. But what I am going to do is to have the government proceed in the manner that it would typically proceed and not do anything different. In other words, we are not going do it with the paralegals. The prosecutor can proceed with either a witness on the stand or the prosecutor with another prosecutor. I will then give a limiting instruction stating that these were originally written. They were in no sense -- there is no indication that they were orally communicated. The jury should understand that. The jury should read them. They are meant to be read. The jury should note the punctuation and emoticons. But there is an interest in the convenience of conveying the information to the jury in a manner in which we can all be clear in court of what's happening at the same time, and it would be novel to have a document where there is a particular piece of evidence pointed out where there is not some specific reference to the text of that through oral communications. Trials are about the typically sensory communication of evidence. Page 10 So we'll proceed that way. Let's eliminate the paralegal version of this and just have the government proceed as they would normally have proceeded in some other case, and I'll give the instruction as to how this material should be taken and reviewed. All right? Now, in terms of the next -- MR. TURNER: Your Honor. THE COURT: Yes. MR. TURNER: May I just inquire with one question? So if the government wishes to put in a -- read in a chat after a witness has left the stand, should the prosecutor just read it in in its entirety rather than having a two-way reading of it, just the prosecution -- THE COURT: What I am suggesting is don't introduce other people into the process who appear to be actors in a way, even if they are just paralegals. If you and Mr. Howard want to just read back and forth, you can read back and forth. But I don't want other people coming in for purposes of assuming a position on the stand or somewhere else where they are doing a reading as if it's a dialogue in a scene from something. All right? Page 11 MR. TURNER: Yes. THE COURT: So we'll do it the old-fashioned way, the way it is typically and normally done at trial and nothing specific. Now, I was supposed to get an updated exhibit list from the government. Do you folks have one, or is there not one? If there is not one, then that is fine. MR. TURNER: There is one, your Honor, and we can provide that as well as an updated disc of exhibits. THE COURT: All right. Is there an updated witness list, or is the witness list that is operative that which you have already shared? MR. TURNER: There is an updated witness list and we can provide that as well. THE COURT: And have you shared all of the names at this point? MR. TURNER: Yes. THE COURT: In the past you have always shared everything with the defendants. They have all the names and they have that information? MR. TURNER: Yes. Page 12 THE COURT: Terrific. Thank you. I have received an updated witness list. In terms of the jury selection, let me just tell you folks, give you a short reminder as to how it is going to proceed. The folks will come into the room, and Joe will randomly from his box spin the box. My method is to put the 12 in the panel in the box, and of the first group there will be four alternates. Also put into the first group we'll be working for the initial questions with all 16 but the peremptories will be against the 12 first and then separately against the four as the alternates. All right? So the peremptories are the first peremptories, 10 to the defense, 6 to the government in six rounds simultaneous, and then a separate two-round, one each, as to the alternates. That will be done separately and I will make it clear when that is happening. The jurors are going to be given a pen along with some biographical questions because we'll eventually -- whoever is seated in the box before the peremptories will have an opportunity -- and, indeed, not opportunity, we're going to ask them to stand up and give us 30 seconds about themselves. What kind of job they have, what their spouse or significant other might do, if they've got children, what they read, what they watch on TV, sort of 30 seconds. On the back of that piece of paper, which is blank, they will be instructed when they first come in to write down any questions to which they have a "yes" answer, and so if I put somebody from the audience into the box we will be asking them did you have any "yes" answers and picking up from there. Page 13 Again, it's use it or lose it. You can't accumulate your peremptory strikes. If you waive for a round, which happens frequently for various tactical reasons that you folks may have, it's use it or lose it. All right. Now, what is the order of witnesses for today, if we have? Who is your first witness? MR. TURNER: Homeland Security Investigations Agent -- Special Agent Jerrod DerYeghiayan. THE COURT: Now, glossary. Have you folks reached any kind of agreement on any kind of glossary or technical presentation of any kind? MR. TURNER: No, your Honor. THE COURT: All right. What I am going to do is assess evidence as it comes in and will then I think determine how much of the evidence appears, potentially, to be highly technical, and it may be that things are explained in such a way that it doesn't get there and/or that even highly technical concepts are explained in a way that are understandable. But if I believe that things are not understandable to the jury, that things are going too quickly and words are being thrown around that can't be understood by the average juror, we'll talk about what might be a reasonable way to proceed at that time. Page 14 Now, I have -- I think we have one other issue that we wanted to raise at this time that I think it makes sense to raise in the robing room, if the defendant will consent to waive his presence. If he won't, then we can do it at the sidebar. Your choice. MR. DRATEL: We can waive, your Honor, for the purposes that we discussed. THE DEFENDANT: That would be fine. THE COURT: Thank you. So let's go on into the robing room with the court reporter to discuss this one issue. *(Pages 15-28 sealed by order of the Court)* *(Continued on next page)* Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 *(In open court)* THE COURT: Let's all be seated. So we now have a group of people who have reported to a room, so we'll get sort of an attendance sheet, if you will, as to who of the 90 or so folks who are supposed to come, how many have come, and then they'll hive off a bunch of them and bring them down. Now, all of you folks who are in the seats, all of those seats will be taken. If you have any kind of disability that requires you to be seated, then indicate that to the CSO and he'll try to find a spot for you, but if you don't have a disability and could stand, we'll need you to stand. I'm not going to right now preclude people from the courtroom. It will be up to the CSO in terms of space constraints. The family of the defendant is entitled to stay and will not be excluded from the courtroom, but others, it's depending upon the amount of space that we've got. When the jury comes in, we'll need to make room for them so they can sit down. Thank you. We'll take a break until we hear from Joe about the jury coming in. *(Continued on next page)* Page 30 *(In open court)* *(A jury of 12 and 4 alternates was impanelled and sworn)* THE COURT: Ladies and gentlemen, we're going to now take a lunch break for an hour. And when we come back, I'm going to give you some very brief instructions and then we're going to go right into the opening statements and then after that, we'll start hearing from our first witnesses. In the meantime, I want to give you one instruction before you go back there and have some lunch. Joe has gotten lunch arranged and he'll give you some preliminary instructions. Because of the timing, we're going to ask you folks to stay here and on this floor and in that jury room for today at least. That's why we arranged to have lunch for you here today. The instruction I have is not to talk to each other now or at any point in time about this case or anybody else. So if you have got any kind of device where you would communicate with anybody, don't communicate with anybody about this case, don't talk to each other about this case or anybody else that you might run into in the restroom. It's very important that the only information that you have about this case is in this room so you can listen to the evidence as it comes in at this trial. All right. Right now you can take some lunch. Page 31 JUROR: They took our cell phones downstairs. Can we go downstairs and let people know that you're on the case? THE COURT: That you won't be back? That makes sense. Just don't go outside the building. Get the phone. Joe, why don't you notify the CSOs that that might occur. A CSO might be able to go down with you to facilitate, access the cell phones so the jurors don't have to leave the building. So they can speak downstairs and turn the cell phone back in. We'll see you folks at 2:30 when Joe will have you come back out into the room and you'll take your seat. All right. Thank you. *(Jury excused)* THE COURT: Let's all be seated. Joe will get things organized back there, but we did have lunch arranged already so they have got -- the jurors have an assortment of luncheon items back there. Is there anything you folks would like to raise with me before we take our own break? MR. SERRIN: We just wanted to let your Honor know in advance that we had one demonstrative in our opening. We have already cleared it with defense counsel. THE COURT: So as long as defense counsel has seen it and hasn't raised any objections, then that's fine. Thank you for the advance notice. Is there anything else? Page 32 MR. SERRIN: Not from the government. THE COURT: Mr. Dratel. MR. DRATEL: No. THE COURT: Thank you. We will come back into this room at 2:30. At that point, I will give the normal instructions on burden of proof, credibility, beyond the reasonable doubt, open mind. I'll tell the jury about how I have LiveNote here at my computer and the few basics. That will take about ten minutes, maybe not quite. And then we'll go directly into opening statements without a further break. Let's take our break. Thank you. *(Luncheon recess)* Page 33 A F T E R N O O N S E S S I O N 2:31 p.m. *(Jury not present)* THE COURT: Anything that anybody needs to raise with me? We are ready to bring out the jury. MR. TURNER: We are ready, your Honor. THE COURT: All right. Let's bring out the jury. THE CLERK: All rise as the jury enters. *(Jury present)* THE COURT: All right. Ladies and gentlemen, let's all be seated when you get to your spot. I want to give you some preliminary instructions, and then we are going to go right into the opening statements. As I previously told you earlier today, your function, ladies and gentlemen of the jury, is to decide the issues of fact in this case. You are the deciders of fact. You are to base your decision on the issues of fact solely on the evidence. Nothing that I say is evidence. Nothing that the lawyers say is evidence. A question is never evidence. It's the answer to the question that is evidence. Objections aren't evidence. Evidence will come in in the form of testimony from the witnesses who were sworn under oath and who are testifying at trial, or in the form of documents which are formally received into evidence. Now, there are two kinds of evidence. There is direct evidence and also circumstantial evidence, and I'll just spend a moment about this. Page 34 Direct evidence is something that you have or a witness has seen, felt, heard, touched, with one of their senses directly. They were there. They can tell you about X. They heard X. They saw X. Whatever -- you know, whatever they heard or saw directly, that's direct evidence. But circumstantial evidence is proof of facts from which you may infer or conclude that other facts exist. So, in other words, you've got several of the dots but you don't have every dot in the picture, but you could infer from the placement of several of these dots along the edges that certain other facts occur. So let me give you a typical example. Let's assume that the windows are closed and you come in this morning and it is sunny outside. Over the course of the day you see folks coming in and they're coming in and they've got raincoats on and they are dripping and there is an umbrella and it is dripping wet. Now, you can't see outside. You haven't seen the rain. But you can infer, based upon the fact that you've got people dripping wet with umbrellas, that it's raining outside. That is circumstantial evidence. It is not more complicated than that. It is taking certain facts and it's from those facts inferring other facts. Now, both kinds of evidence are evidence that you can use as you deem appropriate in considering whether or not certain facts have been proven at trial. Now, you're going to hear from witnesses. They're going to come to court. They're going to testify here in front of you. And you, ladies and gentlemen of the jury, are going to have to determine whether or not you believe them, how credible do you find a particular witness. And how do you decide that? You decide that based upon how you decide that every single day in your own life. Every single day in your own life you apply your common sense to whether or not you believe somebody. And you assess all kinds of things. What's is their demeanor? How are they presenting themselves? Are they being evasive? And we'll talk more about that at the end of the case. But it will be up to you to decide how much of a witness' testimony to believe -- some of it, all of it, none of it. That will be up to you in your assessment of their credibility. Page 35 Now, in terms of the burden of proof, as I said at the very beginning, the burden of proof in a criminal case is on the government. It is the government's responsibility to prove that the defendant is guilty beyond a reasonable doubt. It is the government's burden of proof. The defendant does not carry a burden of proof in a criminal trial. And as I mentioned before, the Indictment in this case is simply an accusation; it is not proof of anything. All right? The fact that the defendant has been indicted is not proof of anything. He has pled not guilty and that's why we're here at this trial. Page 36 Now, I will instruct you at the end of the evidence about what it means to say that something is beyond a reasonable doubt. But let me just say that the defendant and his lawyers need not present any evidence in this case if they choose not to do so, because the burden, as I said before, the burden is on the government. And you can't draw any negative inference against the defendant if he does not present evidence. Now, it's very important that you keep an open mind until the close of the evidence. Evidence is not like reading a story in chronological order. Evidence comes in in pieces. You get a little bit of it from one witness and it might be out of chronological order. You need another witness or other documents to fill in some of the other pieces. So it's very important that you keep an open mind. Because you'll hear one part of a story but you might not hear the other part of the story until later. So it is very important that you keep an open mind until all of the evidence is in. The way it proceeds is that, in terms of the evidence, the government will present its evidence first. It is going to give its opening statement. The defendant will give his opening statement, through counsel. Witnesses will be called. The government will do direct examination. Then there is an opportunity for the defense to cross-examine a witness, if they choose to do so. And after that there may be some limited redirect and recross. It depends on how it goes. But that is the way in which it proceeds. Page 37 Now, there may be instances where you've got friends or family who you see in the courtroom or people that you know in the courtroom. It is very important that if you have anybody in the courtroom who you know, that you let us know, and that you not speak to that person about the case. Because as you know, you come in and out of the room at times when we bring you in and out of the room, and there may be rulings on evidence and other discussions which you are not present for. And we don't want you inadvertently to be hearing things that the jury shouldn't be hearing through a friend and/or relative inadvertently. So if Joe knows about it, then we will know to be able to give a special instruction on that day. It's just a reminder of what I have said. Now, it is very important not to speak to anybody about this case, each other, anybody at all -- a spouse, anybody in your life. You've got to keep this to yourself until the close of all the evidence, and then when you are instructed on the law you will go into the jury room and you will deliberate and talk to each other. And until you reach a verdict, you still won't talk to anybody other than each other about this case. So you can't even talk to each other until all the evidence is in and you have been instructed on the law. Now, it's very important that you also not be exposed to what the media has to say about this case, what newspapers have to say about this case or Internet blogs or people outside who may approach you. Do not let anybody approach you, talk about this case at all. OK? If anybody approaches you about this case, do not speak with them about this case at all. Don't go home and do any Internet research. Don't try to become an expert in anything or follow up on your own personal research about a particular person, place or event. For purposes of this case, you just receive the evidence in this courtroom. That is the only evidence that you should receive in this case. Page 38 You don't want to -- and, actually, people have done this and it just leads to all kinds of difficulties. Don't update your Facebook page saying I'm on, you know, X case. This is what we heard today. You know, don't update your Facebook page. Don't Twitter or tweet or send emails to people about it or texts or anything else. And I will be reminding you about not talking to each other or anybody else about this case repeatedly. And you are going to be sick to death hearing me talk about it, but it is important that I keep doing it. Every once in a while I will change the way I do it so I can try to make it a little bit different. Now, I see some of you have the pads and pens for taking notes. Take notes if you want to take notes. Different people learn in different ways and you remember things in different ways. Sometimes it helps keep you attentive. It is up to you. Page 39 Your notes are for you and you alone. They are not for you to share with your neighbor. It is not to play Tic-Tak-Toe with your neighbor. Believe it or not, that's happened in the past. So your notes are for you and you alone. And you'll leave them here at the end of the day under your chair or if you've got a particular spot in the room, and others shouldn't be looking at your notes. They are for you and you alone. Now, the lawyers here -- everybody here in this room, and in fact everybody, if there is anybody else in the room who you ever run into, but particularly the lawyers, they're not going to say hello to you because I've told them they are not allowed to say hello to you. They are not being mean or rude or nasty. OK? It is just complicated. Because if somebody says hello and they say hello in a particular way, you're like are they trying to convey a message to me. I don't want any of that. It is just easier if I say don't say hello to any of the jurors. So they'll probably cast their eyes down or look to the side. Don't think they're being rude. I've just told them don't talk to the jurors. OK? And you shouldn't talk to them either. It's just easier. It makes things cleaner. That way there is never a question about whether anybody meant something from a particular hello. Page 40 Now, LiveNote. I use LiveNote. LiveNote is a particular program which allows me to get realtime feed of what I am saying right now and anything else that is said in the courtroom. So what the court reporter is writing down I have on my screen. I do not do email, I do not surf the web, you know, while I'm here on trial. If you see me looking at my screen, I'm not figuring out, you know, anything other than just what's going on, has my screen gone to sleep. If I'm tapping it, it is because I am trying to put my name back in to open it up again. That is why I look at my screen sometimes. I want you to know so that you don't think I am distracted. All right. Now, beverages in the courtroom. My practice in my particular courtroom is that you can have beverages at your seat. You can have water. You can have hot tea. Cold tea. I really couldn't care less what kind of beverages, nonalcoholic beverages. You can have coffee. My view is what is good for the goose is good for the gander. I am going to have coffee and I don't want to do that if you guys can't have coffee. Sometimes people find it difficult to be in their seats all afternoon without having a little something to eat because they feel like they just need a little something. I don't care. Just don't bring in Doritos where you are crunching. OK? If you just need to eat a little something, that is fine. Whatever makes you comfortable. It's not like you are going to sit there with popcorn. This is not that kind of a situation. But my point is I want you to be comfortable. All right? Page 41 And so if you spill, own up to it. It is not a problem. That way we can make sure it doesn't get into the carpet and stain it forever more because it is the government. I don't get new carpet more than once every couple of decades. All right? Now, we are going to go into opening statements. Opening statements are the opportunity for the lawyers to speak to you. They have very few opportunities to speak directly to you. They have an opportunity now to speak directly to you and to give you an overview as to what they think, what their view is as to what the evidence will show. Again, what the lawyers say is not evidence. And it will be up to you to decide whether or not the evidence at trial has in fact shown what anyone predicts that it might show. Then we're going to go from the opening statements of each side into the witnesses. And after all the evidence is done a couple of weeks from now, we will then have closing statements, or summations; it is the same thing. And that will be another opportunity for the defense counsel to then address you again about what they think the evidence has shown. All right. I think that we're ready to proceed. Page 42 Mr. Howard. MR. HOWARD: Thank you, your Honor. This is a case about a dark and secret part of the Internet that was home to an enormous marketplace for the sale of illegal drugs. It was a website called Silk Road where anybody anywhere in the world could buy and sell dangerous and addictive drugs with the click of a mouse. During this trial we will take you inside this dark and secret world and show you the man who controlled it all. That man, the defendant, Ross William Ulbricht, he was the kingpin of this digital criminal empire. The defendant taught himself computer programming and in 2009 began what he described as, quote, a secret project. Using his laptop computer, he created the Silk Road website. His idea was to make illegal drug deals as quick and easy as ordinary online shopping. And that is exactly what he did. Drugs like heroin, cocaine, LSD, crystal meth, all of these were available on Silk Road. All someone had to do was go to the Silk Road website, pick their drug of choice, and have it delivered right to their doorstep. The defendant's plan worked. Thousands of drug dealers flocked to Silk Road, and more than 1 million drug deals took place on the site before the government shut it down. As the creator and the operator of Silk Road, the defendant was in the center of each and every one of these drug deals. Like a traditional drug boss, he made them all possible. He decided what drugs could be sold on Silk Road. He set the rules the dealers have to follow. And he also tried to protect those dealers from getting caught. And like any other drug boss, Ulbricht profited from the drug deals that took place on his territory. He took a cut of every single deal that took place on Silk Road, and with that he amassed a fortune -- $18 million. Page 43 Also like a traditional drug boss, the defendant was vigilant to protect his criminal empire. When he thought that certain people posed a threat to Silk Road, he was willing to use threats and violence to protect his turf. But unlike a traditional drug boss, the defendant's territory wasn't a city block or even a neighborhood, it was the entire world. And the defendant controlled his digital drug empire from behind his laptop computer. The defendant controlled everything about Silk Road, from top to bottom. As the defendant himself put it, quote, I am Silk Road, the market, the person, the enterprise, everything. Through Silk Road, the defendant built a global online network of drug dealers, and every one of them paid for the privilege of doing business on his site. And what did the defendant give the drug dealers in return? First, he gave them a way to protect them from getting caught by giving a way to hide the real identities and sell drugs anonymously, and, second, he gave drug dealers a whole new way to find and hook new customers. Instead of going to the local street block or street corner, a drug dealer on Silk Road could sell to anybody with a computer anywhere in the world. Page 44 And, ladies and gentlemen, that is why we are here today. We are here to pull the curtain back on this dark and secret world of online drug trafficking that occurred on Silk Road. We are here to show you that behind that curtain was one man, Ross Ulbricht, and his laptop. So now let me just give you a preview of what I expect the evidence to show at trial. First, how did Silk Road work? In some ways it worked like any ordinary online shopping website. The Silk Road Web page displayed pictures of the products that were for sale, and you could click on those pictures to see more details. Once the users found what they wanted, they would add it to their online shopping cart and provide a shipping address and provide for payment. The shipper then shipped the purchased items in the mail. And in this way it was no different than Amazon.com or eBay and other popular online shopping sites, but there were critical differences. Let me just take a moment to show you what the Silk Road website looked like. Now I will draw your attention to the upper left-hand corner here. You can see listings of all kinds of illegal drugs that were on Silk Road, divided by category. And in the middle of the homepage, you see colorful advertisements for particular drugs that were offered on Silk Road. For example, here we have some French pure flake cocaine. Down in the left-hand corner we have MDMA, which is commonly known as "ecstasy." These were just a few of the products, a few of the kinds of illegal drugs, just a few examples of the thousands of listings that were available on Silk Road. Page 45 Ladies and gentlemen, around 95 percent of the items that were sold on Silk Road were illegal drugs, but drugs were not the only illegal items that were sold on Silk Road. Silk Road offered other products, like fake passports and fake identification documents, for sale. Silk Road offered tools to hack into other people's computers or their email accounts. It even offered the services of other people to do the hacking for you to hack into other people's computers. But first and foremost, the site was designed to be an online shopping paradise for the sale of illegal drugs. The defendant tried to attract drug dealers and other criminals to the website by creating a safe haven for them, a place where they could make money selling their drugs without getting caught. The defendant did this by making it virtually impossible for anybody to trace the users on Silk Road. And there are two main ways he did this. First, he made sure that Silk Road could only be accessed in a special way. The defendant designed Silk Road to operate on a hidden part of the Internet known as the TOR network. Anyone can access the TOR network simply by downloading some free software from the Internet. Page 46 But when someone uses TOR, no one can tell who that person is or where the computer is located. TOR hides the locations and TOR hides their identity. Thus, by making Silk Road only available through the TOR network, the defendant enabled buyers and sellers to conduct illegal transactions without leaving a digital trail that could be led back to them. Now, the second way the defendant made Silk Road untraceable was controlling the method of payment on Silk Road. Ulbricht refused to allow Silk Road users to pay for their drugs with a credit card or a check or a bank account. Those traditional forms of payment risk exposing the identities of the people that use Silk Road. Instead, the defendant required that drug deals be paid for with bitcoins. Now, bitcoins are a digital currency. You can't hold on to them like you can hold on to a dollar bill. You will learn more about bitcoins during this trial. But the reason that he chose them for the deals on Silk Road was because they are anonymous. When someone buys something with bitcoins, they don't have to give their name. They don't have to give any account information that can be linked back to them like someone has to do when you buy something online with a credit card or a check. So unlike these traditional forms of payment, bitcoins are designed to leave no evidence of the identity of the people using them. Page 47 In addition to designing Silk Road to protect the drug dealers that were operating on the site, the defendant designed the website to ensure huge profits for himself. You see, every time a drug deal -- every time an illegal transaction occurred on Silk Road -- Ulbricht charged a commission in bitcoins. The commission was a percentage of the overall sale, from 10 to 12 percent. And he collected millions of dollars worth of commissions from the sales that occurred on Silk Road. He took his cut of every deal. In about three years, he amassed nearly $18 million worth of bitcoins. So that is the general overview of Silk Road. Now, what was the defendant's role on Silk Road? First of all, he came up with the idea. He designed the website. The evidence will show that he began planning Silk Road as early as 2009. By 2011, he was ready to launch his startup drug site but he didn't have any drugs to sell. So what did he do? He got some drugs. The defendant rented a cabin outside of Austin, Texas, a short drive from where he lived at the time, and set up a lab in a cabin and grew his own hallucinogenic mushrooms, illegal drugs, so that he would have something to sell on the site when it opened. And once he had the drugs to sell, he needed to draw users to the site. So what did he do? He went on various drug-related discussion forums on the Internet and posted advertisements for the site, explaining how you could buy any kind of drugs you wanted on Silk Road. Page 48 Now, once Silk Road was up and running, the defendant controlled every aspect of its operation. Because he knew what he was doing was illegal, he was careful to conceal his identity while he was doing this. He didn't run Silk Road using his own name. Instead, he used an online alias, a user name, the Dread Pirate Roberts, or "DPR" for short. Now, if you could put the screen back up, you can see a reference to the Dread Pirate Roberts right here in the top right-hand corner of the homepage, welcoming users to the site. "A few words from the Dread Pirate Roberts." The Dread Pirate Roberts was known across the Silk Road community as the man in charge, the man who ran it all, set all the rules, and controlled all the profits. So what are some of the things he did? First, as I mentioned, he set all the rules for the site. And one of the most important rules for Ulbricht was that users had to pay for their drugs or their other illegal goods using the payment system on the website. He didn't want drug dealers to advertise drugs on the site, meet a willing buyer, and then negotiate a way to pay for the drugs off of the site. And why did he do this, ladies and gentlemen? Because he wanted to protect his ability to get his cut, to get his piece of every single sale. Page 49 As an example of another rule, the defendant prohibited any users from revealing any information that could expose the true identities of the drug dealers and the other users of the site. The purpose of this rule was to prevent Ulbricht and the drug dealers on the site from getting caught. You will hear that this rule was so important to the defendant that he was willing to use violence to enforce it. When he believed that people were threatening to expose information about Silk Road, he even tried to have them murdered. Now, although those murders were not successful, the defendant paid hundreds of thousands of dollars to get them done. He was willing to stop at nothing to protect his criminal empire. Now, what were some of the other ways in which the defendant controlled Silk Road? He decided what illegal drugs could be sold on Silk Road. He was the one who decided that all kinds of drugs, no matter how dangerous, no matter how addictive, could be sold on the website. He was the one who decided that fake passports could be sold on the site no matter who was buying them or what they were using them for. He was the one who decided that computer hacking tools and services were available on the site without any regard to the innocent people whose computers would be intruded on as a result. And what else did he do as the operator of Silk Road? He managed the day-to-day operations of the site. For example, he gave advice to members of the site to help them avoid getting caught. He advised drug dealers how to package their shipments to make it look just like ordinary business mail. And when disputes arose between drug dealers and users on the site, he stepped in and helped resolve them. Page 50 Just as the defendant designed it to be, Silk Road quickly became a place where thousands of drug dealers flocked to sell drugs day in and day out. In fact, the site attracted so many drug dealers that it became too big for him to handle by himself. So he hired a staff of about ten people to help with the day-to-day operation of the site. Some handled questions from drug buyers about how to use the site. Others did computer programming to help maintain the site. The defendant never met any of these employees in person. He knew them purely online, but he supervised them just like any other boss, and paid them salaries amounting to hundreds of thousands of dollars over time. Finally, the defendant controlled the flow of money through the site. He designed the Silk Road payment system and permitted payment through bitcoins only. He charged a hefty commission in bitcoins on each sale. And as criminals racked up sales on Silk Road, as drug dealers made over $200 million in drug sales on Silk Road, the defendant made a fortune for himself on his commissions. Page 51 The defendant took many steps to conceal his role running this criminal enterprise. As I mentioned, he was known on Silk Road only by his alias, the Dread Pirate Roberts. But he was also careful not to let many people who were close to him know what he was doing. He kept most of his friends and his family in the dark about his secret life. But because of how much time he was spending running this criminal empire, sometimes he thought it was difficult to keep the secret. His friends didn't understand why he didn't have any free time. The defendant confided to one of his Silk Road employees that he wished he could just explain to his friends why he didn't have free time, that he could scream at them that he was busy because, quote, I'm running a multimillion dollar criminal enterprise. Now, while Ulbricht was making millions off his criminal enterprise, he was careful not to lead a lavish lifestyle that would draw suspicion. He deliberately kept a low profile to protect his secret. He saved his money, planning for a day in the future where he might move to another country in the Caribbean where he could begin spending it. Although the defendant tried to protect his identity as the operator of Silk Road, he made some critical mistakes along the way and ultimately his secret was exposed. Law enforcement agents figured out that Ulbricht was the person using the alias Dread Pirate Roberts, that Ulbricht was the founder, the owner, and the operator of Silk Road. In October 2013, the defendant's luck finally ran out and he was arrested. Page 52 Now, the day of his arrest probably started as a typical day for the defendant. He was living in San Francisco at the time. He spent the morning in his apartment, and in the afternoon he left his house to do his daily work, running Silk Road. Since he ran the website from behind a laptop computer, all he needed was an Internet connection. So on this day he decided to go to a public library with his laptop. It was about a five-minute walk from his apartment. And as he walked to the library, he had no idea that he was being followed by FBI agents. The defendant arrives at the library, finds a table, sits down and opens his laptop, and starts working on Silk Road. He struck up an online conversation with someone he knew as one of the Silk Road employees, a member of his customer support staff. But what the defendant didn't know was this person was not really a Silk Road employee but an undercover federal agent. And as the defendant typed away at his laptop, he had no idea that federal agents in plainclothes were right there in the library watching his every move. So when the agents were in place and the undercover federal agent confirmed that he was chatting online with the Dread Pirate Roberts, the agents in the library made their move. They arrested the defendant. They grabbed his laptop before he had a chance to close it. And what was the first thing they saw on his computer screen, ladies and gentlemen? Silk Road. They saw the defendant was right in the middle of a conversation, the conversation with the undercover agent. The Dread Pirate Roberts had been unmasked as Ulbricht, the defendant. Page 53 Now, that's an overview of what I expect the evidence at trial to show. So how will we prove that to you? How will you know by the end of this trial that this defendant was the Dread Pirate Roberts who ran Silk Road? First of all, the defendant was caught redhanded. The defendant was arrested at that library in San Francisco while using his laptop in the middle of the online chat with the undercover agent. You will hear testimony from that undercover agent. He will tell you about how he investigated Silk Road for nearly two years and was able to successfully infiltrate the site as a trusted member of the Dread Pirate Roberts' customer support staff. He will explain how he monitored the activity of the Dread Pirate Roberts online on that day of the defendant's arrest and watched the defendant as he went into the library. He'll explain how he started chatting with the defendant online after he saw the defendant enter the library. Um also hear from a member of the FBI who was at the library watching the defendant. And you will see photographs taken of the screen of the laptop moments after the defendant's arrest. Page 54 Those photographs show exactly what the defendant was doing at the time that he was arrested. Them show the defendant was chatting with the undercover agent as the Dread Pirate Roberts. The photographs of the laptop will also show the defendant was logged into the Silk Road website under the user name Dread Pirate Roberts when he was arrested. And he wasn't just in any part of the website. He was logged into a special restricted part of the site that he called his mastermind page, a special control panel that he could use as the site administrator to monitor and control the entire site. The defendant was literally caught with his fingers at the keyboard running the Silk Road website. But that's just the beginning. After he was arrested, agents found a mountain of additional evidence on the laptop that he had been using at the time that he was arrested. The laptop contains all sorts of files showing the defendant's operation of Silk Road. And what were some of those files? The defendant kept a personal journal on his laptop, a digital diary, ladies and gentlemen, and that journal contains devastating confessions by the defendant. In this journal the defendant described in his own words how he launched and how he operated Silk Road, including the story I told you about how he had to grow his own illegal hallucinogenic mushrooms in a cabin, how he set up his own drug lab in order to set up the site. Page 55 The journal also describes about how excited he got as the site, as Silk Road, got bigger from year to year. There are also chat logs on the laptop, transcripts of online communications that he had with other Silk Road employees. These chats will show the defendant was involved in running every aspect of Silk Road on a daily basis. And there is a lot more on the defendant's laptop, including a to do list with tasks related to running Silk Road, spreadsheets that track expenses related to Silk Road, and lists of the computers that he had around the world to run the website. The laptop also contained the defendant's enormous profits. It contained bitcoins worth approximately $18 million at the time of his arrest. Beyond this extremely damning evidence, I'm hear still more evidence the defendant controlled Silk Road. I'm hear how the defendant confessed to a long time friend of his from college. When the defendant was first developing the site, he sometimes turned to a friend for programming advice. Well, you will hear from that friend at this trial. The friend will tell you that in 2010, in 2011, when he was working as a computer programmer, the defendant started calling on him to ask him help on computer programming questions. The friend will tell you that he repeatedly asked the defendant,s hey, what are you working on? What kind of website are you building? And the defendant would refuse to answer, telling him that it was top secret. Page 56 Eventually the friend told the defendant that he wouldn't provide any help any more unless the defendant told him what this secret website was. So the defendant eventually gave in. He told his friend that he was running a website that sold illegal drugs. You will hear how the defendant showed his friend the Silk Road website and bragged that he was the mastermind behind the entire thing. You will also hear from a federal agent who first identified the defendant as the Dread Pirate Roberts based on telltale clues he left behind on the Internet. In 2011, when he started the website, he publicized, he advertised the site on various drug-related forums on the Internet. Then he will show you those Web pages and explain to you how he was able to trace them to the defendant, which is what led law enforcement to him. You will hear from some other witnesses. You will hear from a drug dealer who sold heroin on Silk Road. Now, that witness has pled guilty to serious drug offenses, but he's here to give you an insider's view of how Silk Road operated from one of its many -- from one of its thousands of drug dealers. He'll tell you his story about how he himself owned a legitimate business but he was overwhelmed with his own expensive addiction to heroin. He'll tell you about how he discovered Silk Road and almost overnight was able to become a bigtime drug dealer on Silk Road. Page 57 Within days he was able to easily set up an account in Silk Road and start distributing heroin that he had purchased in New York all over the United States. The defendant made it possible for this man, who had never sold drugs before in his life, to distribute heroin to literally thousands of people across the country. You will also hear from a computer scientist who had examined the computers which ran the Silk Road website. He will tell you about the data that was recovered from the servers and the huge volume of drug transactions that are reflected in the data. You will also hear about drug buys that undercover agents made on the Silk Road website, how they went on the Silk Road website and ordered drugs, and how those drugs then arrived in the mail. These are just some highlights of the proof you will see and you will hear. We submit to you that by the end of this trial you will find that the evidence provides a detailed and interlocking account of how Ross Ulbricht was the Dread Pirate Roberts, the owner and the operator of the vast criminal enterprise that was Silk Road. Page 58 Now, before I conclude, I just want to take a brief moment to talk about the legal charges in this case. First, the defendant is charged with drug trafficking crimes based on the drug deals that he brokered and that he profited from in operating Silk Road. The defendant is also charged with committing crimes relating to other types of criminal activity that he brokered and profited from through Silk Road. He is charged with trafficking in fraudulent identification documents based on the fake passports and the fake ID's that were sold on Silk Road. He is also charged with a computer hacking crime based on the computer hacking tools and the services that were sold on Silk Road, every one of which the defendant profited from. And, finally, the defendant is charged with money laundering based on the bit coin-based payment system used on Silk Road, which the defendant designed to conceal the money moving through the site from law enforcement. This is just an overview of the charges in this case. Judge Forrest will give you detailed legal instructions on all of these charges at the end of the case before you deliberate. At the end of this trial, after all the evidence has been presented to you, we will have a chance to speak to you again about how the evidence proves the defendant's guilt beyond a reasonable doubt. Between now and then, I would just ask you to do three things: First, listen carefully to the evidence; second, follow Judge Forrest's instructions on the law; and, third, use your common sense, the same common sense that you use every day. If you do these three things -- pay careful attention to the evidence, follow the Judge's instructions on the law, and use your common sense -- you will reach the only conclusion that is supported by the evidence in this case -- that Ross Ulbricht, the defendant, is guilty as charged. Page 59 THE COURT: Thank you, Mr. Howard. Mr. Dratel. MR. DRATEL: Thank you, your Honor. Good afternoon. May it please THE COURT: My name is Joshua Dratel, and along with the other members of the defense team, who you've already met as well, we represent Ross Ulbricht. Ross is a 30-year-old with a lot at stake in this trial, as you can imagine. It is important, as jurors -- part of your oath -- I know you understand it -- to keep an open mind, not to draw conclusions. There is direct examination and then there is cross-examination. Cross-examination of government witnesses is where we get the opportunity to ask questions. And those questions and answers, I submit to you, will tell you the story about this case. Use your common sense. Use your life experience. Those are the most important things you have with you to determine the outcome of this case. The outcome, which I submit to you, after you hear all of the evidence, will be not guilty on all of the counts. Ross has pleaded not guilty. It is the government's burden, as the Court has told you, to prove each and every element of the charges beyond a reasonable doubt. Now, I won't try to define that for you now but at the end of the case the Judge will, and it is an important, fundamental principle that protects all of us. Page 60 This case, to a large extent, is about the Internet and the digital world where not everything is what it seems. You and I are having this experience right now and you are perceiving it and you know I am here and you know the Judge is here and you know the government is here and Mr. Ulbricht is here and everyone else. Behind the screen, however, on a computer, it is not always so easy to tell. You don't know what or who is on the other side. You don't know if they are telling you the truth. You don't know if they are who they present to be. You will hear evidence. You will hear how Ross is a young man with ideas, a lot of ideas, many of which he doesn't follow through with. And Silk Road was Ross' idea. He created it as a completely freewheeling, free market site that could sell anything except a couple of items that were harmful. It was kind of an experiment, an economic experiment that after a few months was too stressful for him and it got out of hand in terms of becoming popular and what it involved -- to be involved in a site like that. So he handed it off -- you will hear, he handed it off to others. Page 61 And at the end -- I will get to the middle as well, but at the end he was lured back by those operators to be in a position, that you heard about from the prosecutor in that library that day, to take the fall for the people operating the website. Because they had been alerted that they were under investigation. They had been alerted that the walls were closing in on them. They had been alerted that time was scarce for them to escape. And Ross was the perfect fall guy because, after all, Silk Road was his idea. He was also involved in Bitcoin. He was an investor in Bitcoin. He was a trader in Bitcoin. You will hear about that. So the connection of Bitcoin and Silk Road, again, made him the perfect fall guy. So other than that day of arrest we'll see what connects Ross to the operation of Silk Road, whether it's just a digital contrivance that left him holding the bag when the real operators of Silk Road knew that their time was up. Timelines are going to be very important in this case, what's happening on the Silk Road website, what's happening with the investigation, what's happening with Dread Pirate Roberts, who we will call "DPR." And you will hear about the DPR concept and where it comes from. It comes from a movie, earlier a book, from decades ago. Nothing particular to Ross. Page 62 They won't connect him to anything particular about Dread Pirate Roberts and that name. But look at the timeline, what's happening with Dread Pirate Roberts, what's happening with Silk Road, what's happening with Ross' life, what's happening with Bitcoin and the Bitcoin market. Now, the government's claim, as you'll hear from the evidence, that Ross was Dread Pirate Roberts is a contradiction that's so fundamental and dramatic that it defies all of your common sense and life experience. You heard the government talk about what a mastermind, the complicated computer operations, the scrupulous security to run the most profitable, diverse black market Internet marketplace in history. Yet -- and this is someone who studiously avoided revealing his identity to anyone associated with the site. That is employees -- the employees will come in, they don't know Ross Ulbricht from me. The vendors, the people who sold on the site, they don't know Ross Ulbricht from me. The purchasers of drugs on the site, they don't know Ross Ulbricht from me. The confidential informants the government had operating as buyers and sellers and administrators didn't know Ross Ulbricht from me. DPR was impenetrable on that website in his meticulous consideration of his operation with communications security. And yet they are going to tell you that the same person, this mastermind, this incredibly careful person goes to a public library, gets on a public Wi-Fi system -- open on his computer is also something called BitTorrent, which is a peer-to-peer file sharing program that allows anyone access to your computer who is on that same network. Some of this is technical, and regardless of your technical background, you really should use your common sense and your life experience. The technical stuff is the easy part. The common sense is the important part. Page 63 So he is in a public place, on a public Wi-Fi, with a program open that allows anyone on a huge network worldwide access to his computer. With journals going back years, with all sorts of other evidence the government is going to come in and claim is a thread from beginning to end, that Ross is the Dread Pirate Roberts? It is a contradiction that is so fundamental that it defies common sense, and you will hear all of that in the evidence. *(Continued on next page)* Page 64 MR. DRATEL: In his apartment, they found in the wastebasket handwritten notes, handwritten notes about the site. Can you imagine that that's the same person? Can you imagine that Dread Pirate Roberts would do that in a wastebasket? This is the criminal kingpin the government has described who managed and operated the most successful and profitable Internet black market website in history: Handwritten notes in his wastebasket. You'll also hear that even before that day in September when Ross is confronted by Homeland Security investigators about materials delivered to him, phoney IDs that were delivered to him from Silk Road, he talks to them, he talks to them about Silk Road, and then what happens in the two months between then and his arrest? Does he run? No. Does he go underground? No, still living in San Francisco. Under his own name. Does he move any money? Any Bitcoin? No. Does he destroy all the stuff on his laptop that's supposedly so incriminating, that's supposedly on his laptop? No. Did Dread Pirate Roberts do all that? You'll hear about the evidence, you'll hear the evidence what happened. There's no evidence you'll hear that he traveled with the money, that he did anything to suggest that he was a criminal mastermind keeping one step ahead of the law even after the Homeland Security visit to him in his apartment in San Francisco. Page 65 Contrast that with what you'll hear about the real DPR. You'll see from the chats that the real DPR was extraordinarily sensitive to security, extraordinarily sensitive to law enforcement intrusion on Silk Road, law enforcement infiltration of Silk Road, law enforcement attempts to identify. You'll hear from the evidence that the real DPR was paying for information about law enforcement investigations. And you'll hear that he kept a file full of information provided to him and how by September 13, he was warned that law enforcement was in possession of his real name, and that name is not Ross Ulbricht. That is what compelled, you'll hear from the evidence, compelled the real DPR to put his escape plan into action and transfer the blame to Ross. You'll see how Ross, naïve, ultimately became the victim of DPR and that's why he is sitting before you now as a defendant in this case, and conveniently supplied with access and all the information to his laptop, so when FBI arrived that day, he would be left holding the bag. Also, look at Ross' lifestyle. They didn't say he didn't live lavishly, but really, when you talk about the profits of this, you'll see that money in Bitcoin is a fraction, a small fraction of what his -- the profits were from the Silk Road website. Where is the rest of the money? They haven't connected any of it to Ross. There is no connection to Ross to the rest of that money. DPR has it, the real DPR. Page 66 And the whole thing about lavish lifestyles and living under the radar, people don't operate drug empires to live a simple life enjoying the creature comforts. They do it for the money. They do it for the lifestyle. They do it for the greed. You have life experience and you have common sense. Apply it to the evidence as you hear it. The government's premise all along is that Silk Road was the product of a master computer programmer. Doesn't fit Ross' profile. They can talk all they want about self-taught and asking questions of a friend. We'll hear about that as we get into the evidence. And where is that money? The real DPR is out there. Silk Road II was online within six to eight weeks of Ross' arrest. The government also talked about violence and attempts at violence, but that's not charged here. Don't be distracted. It's not charged here. There's no evidence ever the people involved ever existed, you'll hear that and the government will read that in a stipulation, no evidence anyone was ever harmed or as, like I said, or even existed who were supposedly the targets. The Internet is an unusual place. People can create and fabricate profiles of themselves and others in ways that we may not have been able to imagine 20 years ago, maybe 25 years ago now. It's like a dating site, you get all sorts of information and when you meet them in person, they may not quite match what was on that profile. None of it may match. Page 67 When witnesses take the stand, you'll be able to judge them. You'll be able to evaluate their testimony, whether they're lying, whether they're telling the truth, whether it's a combination of both. On the Internet, how do you judge that, who you're communicating with? Some of the concepts the government talked about you'll find out a little more, the Tor, the onion router, the part of the Internet that Silk Road existed on, this deep, dark place that was developed by the United States government for legitimate means that is used legitimately in many aspects. There's nothing deep and dark about it. Bitcoin, another aspect, it's traded openly. Its value over time will be an important aspect in this case because you will hear how that $18 million was made. That Bitcoin was worth almost nothing in 2010 when an investor in Bitcoin could buy them for pennies and that it's worth hundreds and hundreds of dollars, four to $600 by the end of 2013. Think about what kind of profit you can make just trading Bitcoin. By the way, you know it's only anonymous in terms of the transaction between people in terms of Bitcoin, it's traceable. The transactions themselves are all traceable in what's called a block chain for Bitcoin. Bitcoin is not designed to be a fraud. Bitcoin is not designed to be a means of criminal activity. Bitcoin was designed to be an antifraud currency measure, digital, unduplicatable in that regard, so antifraud, and you'll hear all about that. Page 68 In regard to the witnesses, and again, by the way, just about the money, no one traced any of it back to Ross except what's on that laptop. Where is the rest of it? Let's hear the evidence or the lack of evidence. What about the witnesses? The only one who even knew Ross and this was a friend back in the beginning and others, the drug dealer they talked about is another witness as well who have made deals with the government in exchange for their testimony to avoid the serious consequences of their own conduct. They made a choice, and you'll hear about it, to provide testimony to the government in exchange for significant, significant benefits, so that they can be in that seat instead of that seat. So please, as the evidence comes in at the conclusion of the case I'll speak to you again obviously to sum up, but the case is simpler than it appears in the context of the technology. You have to apply your common sense. That's your best attribute and your life experience. Ross is not a drug dealer. Ross is not a kingpin. Ross was not involved in any conspiracy to do anything like that. He was not involved in any conspiracy to sell hacking software or phoney IDs or anything that's charged in the indictment. Page 69 And at the end of the case, after you hear all of the evidence and the closing arguments and deliberate, I submit to you there's only one verdict that the evidence will permit and that your common sense will permit, that Ross is not guilty on all of the counts against him. Thank you. THE COURT: Thank you, Mr. Dratel. Ladies and gentlemen, we'll take a brief break and then we'll come back and have our first witness. This will be our only break until we end. We're going to end right on the dot of 5:00. So we're not going to keep you today or any day past 5:00. Let's take a short break and then we'll come back and we'll go until about ten of 5:00, all right, and then we'll have our first witness. Thank you. I want to remind you not to talk to each other or anybody else about this case, about any impressions you have about this case, anything at all to do with this case, don't talk about it. Thanks. *(Jury excused)* *(Continued on next page)* Page 70 *(In open court)* THE COURT: Is there anything we need to raise before we take our own break? MR. SERRIN: Would you like the witness to take the stand? THE COURT: I'm indifferent to that. Does anybody have a preference to how that choreography goes? MR. DRATEL: I don't. THE COURT: Put the witness on the stand and that will save the minute or two it takes to otherwise get the witness. Let's take a five-minute break, seven-minute break and then we'll come on back and pick up with the witness. Thank you. THE DEPUTY CLERK: All rise. *(Recess)* *(Continued on next page)* Page 71 *(In open court)* *(Jury present)* THE COURT: Call your first witness please, sir. You have already put him on the stand. MR. SERRIN: The government calls HSI Homeland Security Investigator, Jared Der-Yeghiayan. *(Witness sworn)* THE COURT: Please be seated and it will important that you speak clearly and slowly into the microphone and I see you have water there already. Thank you. Mr. Turner, you may proceed. MR. SERRIN: Thank you. THE COURT: You may want to back up the podium a little bit more so that you're not in front of the jury like that. MR. SERRIN: Thank you, your Honor. THE COURT: There you go. Terrific. Sorry, we hadn't arranged that beforehand. Thank you very much. Perfect. JARED DER-YEGHIAYAN, called as a witness by the Government, having been duly sworn, testified as follows: DIRECT EXAMINATION MR. SERRIN Q. Agent Der-Yeghiayan, who is your employer? A. I work for Homeland Security Investigations, Immigration Customs Enforcement. Page 72 Q. What is Homeland Security Investigations? A. It's the investigative branch of Homeland Security. Q. How is Homeland Security Investigations commonly referred to? A. It's referred to as HSI. Q. So what's your title at HSI? A. I'm a special agent. Q. How long have you been a special agent with HSI? A. Since 2010. Q. And where are you currently assigned? A. I'm assigned right now to Chicago O'Hare International Airport. Q. Chicago O'Hare International Airport? A. Yes. Q. What are your duties there? A. My duties include current investigations that are related to immigration customs crimes such as human smuggling, narcotics smuggling, IPR, which is different rights violations for trade mostly. Q. So how long have you been assigned to work at O'Hare International Airport in Chicago? A. I've been assigned at O'Hare, well, since 2010, I started with HSI. Q. And you said -- you've been an HSI special agent since 2010? Page 73 A. Yes. Q. And how about before that, any prior law enforcement experience? A. Yes, I was also a CBP officer, Customs and Border Protection Officer at Chicago O'Hare. Q. When did you do that? A. I started around 2003. I was hired on by Immigration Naturalization Service IMS inspector, which turned into Customs Border Protection. Q. How about after that? A. After O'Hare, I was also assigned as a counterterrorism response worker in 2005. Q. And after that? A. And then also I was assigned as a narcotic rover at Chicago O'Hare. Q. Explain what a narcotic rover means. A. There's officers that are designated at the airport to try to find narcotics that are being smuggled through. Q. So how long have you been at O'Hare International Airport as a law enforcement officer in some capacity? A. Since 2003. Q. Are you familiar with the website known as the Silk Road? A. Yes, I am. Q. And did there come a time when you opened up an investigation of the website? Page 74 A. Yes, I did. Q. When was that? A. It was October 2011. Q. And how did your work at the airport at Chicago O'Hare lead you to open an investigation of the Silk Road website? A. We also cover, as part of O'Hare, there's a mail unit that's assigned to the grounds that's an international mail unit, so we were getting in and receiving lots of drugs that were coming in through the mail through letter class mail, unusual drugs. Q. So O'Hare is an international airport, right? A. Yes. Q. So in addition to receiving passengers from foreign countries, does any international mail come through O'Hare International Airport? A. Yes, it does. Q. Where does that mail come from? A. It comes from various countries from international carriers. Q. What do you mean international carriers? A. It's -- so it would be the -- an airline that's operated by a foreign government bringing in the mail. Q. So, an airline from, let's say, the Netherlands what would that be? Page 75 A. From the Netherlands, that would be KLM airlines. Q. And they bring in the Netherlands' mail? A. Yes, they do. Q. After a plane lands at O'Hare International Airport, after an international flight lands, what happens to the mail? A. The mail that is on the plane is then taken off the airfield and taken over to the inspection area, which is in the mail unit. Q. And who inspects it? A. The Customs Border Protection officers. Q. What do they inspect it for? A. They search for various things, again, a lot of trade violations, anything that violates pretty much U.S. law that's being imported. Q. How do they inspect it generally? A. Usually with x-rays and with a canine detection dogs. Q. Any warrant required to do that? A. No, there's no warrant required. Q. Why not? A. There's a border search authority -- MR. DRATEL: Objection, your Honor. THE COURT: Overruled. A. There's a border authority that officers have that they don't need a warrant to search incoming mail coming in. Q. So what happens if contraband is found in incoming international mail? Page 76 A. If contraband is discovered, the officers will seize it and it will be documented. Q. And what involvement, if at all, do you yourself have in searching incoming international mail at O'Hare? A. As assigned as a special agent to O'Hare, I will -- if there's a narcotic seizure, generally we're notified by Customs Border Protection to investigate the seizure. Q. So tell us about the mail seizures that eventually led you to open an investigation of the Silk Road website. A. There was -- while I was assigned or I would take -- make routine trips to the mail unit to pick up various things that either the officers would seize and also to look at the various things that were suspicious that might lead to investigation, and while I was there one day, an officer brought to my attention -- Q. What time frame is this? A. This is approximately June 2011. An officer brought to my attention several -- MR. DRATEL: Objection, your Honor. THE COURT: Hold on one second. Overruled. Q. Without telling me anything the officer said, what did you see when you went to the mailroom? A. I saw there was packages, there was mail envelopes from the Netherlands containing ecstasy pills in them. Page 77 Q. How many ecstasy pills? A. Each envelope, there were multiple envelopes, and they contained one or two pills per envelope. Q. And how were they packaged? A. They were packaged in -- it was almost like a commercial-like envelope that also had -- they tried to conceal the drugs inside by wrapping it up in vacuum seal and foil. Q. What was unusual, if anything, about this drug seizure? A. It was unusual for me because I hadn't -- we haven't seen ecstasy being seized in the mail or in letter class like that in a lot of years, ever since I started pretty much at O'Hare. Q. And what was unusual, if anything, about the packaging the drugs were contained in? A. It seemed like they went to unusual steps to try to mask it, to hide it from detection, and it looks like they also -- it was commercialized in the sense that it had sticker labels on it that were printed and there was also similarities in it, too, so the multiple envelopes shared the same characteristics, outer characteristics. Q. So before this, when you had seen drugs seized at the international mail at O'Hare -- MR. DRATEL: Objection; leading a little too much. THE COURT: Why don't you rephrase. Q. Before this, what sort of packaging had you seen drugs come in at O'Hare International Airport? Page 78 A. Generally with letter-class mail, you'd see it in the way that it would -- it would usually just be, like, a single occurrence. It would be in an envelope that would be almost personalized in the sense most of the time. The commercial stuff does come in every once in a while larger shipments, but the smaller stuff with just one or two pills in a commercial type of appearance was unusual because normally you would have handwriting outside the envelope versus printed sticker labels, and it wouldn't be multiple envelopes all addressed to different people across the entire United States. Q. Was this seizure of ecstasy in June 2011 an isolated incident or were -- did more seizures follow? A. There were more seizures to follow. Q. How do you know that? A. Because I asked -- I kept on monitoring the seizures that were at the airport and at the mail unit that were coming in. Q. And these seizures that you noticed coming in, was this from one country in particular or were there different countries whose mail you were monitoring? A. In the beginning of the investigation, it was just primarily the Netherlands. After that, it did turn into other countries that we found the same stuff in other countries' mail as well. Q. So what did you notice about the number of seizures being made from the mails? Did they stay the same over time or increase or decrease? Page 79 A. The numbers were increasing consistently. Pretty much every month, they would go up in volume. Q. And what did you notice about the types of drugs being seized from the mail? Was it just ecstasy or did that change as well? A. In the same type of envelopes that we were seizing that appeared commercialized, we started seeing more than just ecstasy. We saw the drug that's commonly used in ecstasy, which is MDMA. We found it in powder and crystal form. We also found LSD. We found cocaine. We found heroin, as well as several other Schedule I and II narcotics. Q. Just could you clarify what do you mean by Schedule I and Schedule II. A. It's a classification for drugs as far as medical use goes that's designated by the government: Schedule I being no medical use and Schedule II having very limited medical use. Q. So, do you see the binder of exhibits that's in front of you? A. I do. Q. Can you turn to what's been marked as government Exhibit 100A in that exhibit book. A. Okay. Q. Do you recognize this -- is it one page or a set of pages? A. A set of pages. Page 80 Q. Do you recognize these pages? A. Yes, I do. Q. What are they? How do you recognize them? A. These are photographs that I took. Q. What are they photographs of? A. It's photographs of a seizure that we made of drugs at the mail unit. MR. SERRIN: The government offers Government Exhibit 100A into evidence. MR. DRATEL: Just note our objection. THE COURT: Government Exhibit 100A is received. *(Government's Exhibit 100A received in evidence)* MR. SERRIN: Would you publish government Exhibit 100A. Q. Could you walk us through these pages and tell us what they show, first, what are we seeing on the screen here? A. The first image is -- this is the -- it's the piece of paper that was discovered inside the envelope that's behind it, which was a seizure that was paid from the Netherlands. MR. DRATEL: Your Honor, this monitor is not working. It says no signal. There's something that might have been disconnected. THE COURT: Maybe from the noise we were having earlier. *(Pause)* Page 81 Q. I'll get back to that in a minute. When was this photo taken? A. This photo was taken December 4, 2011. Q. By the way, is that marked anywhere on the exhibit itself? A. Yes, it is. It's marked on one of the pages in the image properties. Q. So the jury can see that, go to page six please, zoom in. Can you go back to page one. So this envelope, first of all, tell me about the return address. A. The return address label in the left-hand corner says studyabroad.com. It was presented like a business. Q. Did you look up that website? A. I did. Q. And what did you find there? A. It didn't have the logo. It wasn't a website for what was advertised with the same address from the knowns. Q. What did you find inside the package? A. Inside was -- it was ecstasy pills. Q. And what kind of paper was it wrapped in? A. So there was a piece of paper inside and inside that piece of paper was a silver foil, the silver foil was all vacuum-sealed and there was a number 3 written on the outside of it. And then once you cut into the silver foil, there were multiple Ziploc baggies that were wrapped around a cotton-like material. Page 82 Q. Could you go to the next page. A. Next page, please. And then when cutting into the cotton-like material you can -- there's three pills, white pills inside of it. Next page. And then these are the pills that were discovered inside the packaging that had a speaker logo on it. Q. And did you do any test on the pills to determine what substance they contained? A. I field-tested it; yes. Q. What do you mean by field-test? A. There's a field test, a chemical test that we can perform on suspected drugs; and it would react in a way that it would let you know generally the consistencies of a certain drug. Q. And the paper here, what did it say that you found inside? A. The paper itself was labeled the Candy Shop and it said don't forget the feedback. Q. Could you take a look at what's been marked as Government Exhibit 100C, please. Do you recognize -- do you recognize these documents? A. Yes, I do. Q. How do you recognize them? A. It's a photograph I took. Q. What is it a photograph of? A. I'm sorry? Page 83 Q. What is it a photograph of? A. It's a photograph, while at the mail unit, of packages that we were -- that I recovered out of the Netherlands mail. MR. SERRIN: The government offers Government Exhibit 100C. MR. DRATEL: The same objection, your Honor. THE COURT: Why don't you establish the time frame. Q. When was the photo taken? A. The photo was taken on December 8, 2011. THE COURT: Government Exhibit 100C is received. *(Government's Exhibit 100C received in evidence)* Q. Can you publish the exhibit. What are these envelopes? A. These are envelopes that I recovered from the Netherlands' mail that we had either already found drugs in similar-style envelopes in the past, recognized them and also other ones that were suspicious. Q. Did you actually examine the contents of all of these envelopes? A. I did. Q. What were they found to contain? A. They were found to contain various drugs such as ecstasy, LSD and amphetamines. Q. And over how many days were these envelopes seized? A. This was just one day. Page 84 Q. So how typical was it by the time you took this picture that you'd be seizing this many packages in a given day? A. This is pretty standard early on when we started the investigation that we'd start out by seizing quantities such as this. Q. So what did you do with all these letters that you were seizing from the incoming mail at O'Hare? A. The letters themselves, the drugs would be seized and also the envelopes would be seized and we were holding and maintaining them as evidence. Q. Who maintained the envelopes? A. HSI did. Q. And were you involved in preserving them? A. Yes. Q. Where is that evidence now? A. That evidence is stored in a vault, an HSI vault in Chicago. Q. Can you take a look at Government Exhibit 104. Do you recognize this document? A. Yes. Q. How do you recognize it? A. I took this photograph. Q. When was it taken? A. It was taken approximately two months ago. Q. And what is this a picture of? Page 85 A. It's a photograph of all the envelopes that we seized during the course of this investigation. MR. SERRIN: Your Honor, the government offers Government Exhibit 104 into evidence. MR. DRATEL: Same objection, your Honor. THE COURT: When you say all of the envelopes that were received, what I see is something more akin to boxes. Is it your testimony that these boxes were full of envelopes? THE WITNESS: Yes. THE COURT: Were they full -- were there two or three envelopes in the boxes or was it just an envelope in the box that was actually packed full? THE WITNESS: Each box, your Honor, was filled with numerous envelopes. And on the outer side of them, it's very hard to see on the image, but there's the number of the individual seizures on the outside. So each box can contain approximately about 100 envelopes or more. THE COURT: How do you know each of these boxes contained envelopes in the manner you've suggested? THE WITNESS: I put them in the boxes. THE COURT: Government Exhibit 104 is received. *(Government's Exhibit 104 received in evidence)* Q. Can you publish the exhibit, Mr. Evert. So how many letters approximately are in all these boxes? Page 86 A. Approximately 3600. Q. And during what time period were these seizures made? A. This was from October 2011 through April 2013. Q. And how did this volume of drug seizures compare to the volume of drug seizures in the O'Hare mail in years past? A. Once these seizures started, our numbers were higher than any previous year. Q. How much higher are you talking about? A. Thousands higher. MR. DRATEL: Objection with respect to personal knowledge. THE COURT: In connection with your duties and responsibilities, why don't you connect up what information he had in the past and therefore what the comparison is based on? MR. SERRIN: Sure. Q. You mentioned before that you were a narcotics rover in Chicago O'Hare Airport for some time? A. Yes, I was. Q. And after that, what did you do? A. I also was an intel officer for a few months and then my time at CBP. Q. And that covered what time period? A. That was from 2008 through 2010. Q. And the narcotics rover duties covered what time period? A. That started 2008. Page 87 Q. Go ahead. A. And went through early 2009. Q. And throughout that time period, did you -- what involvement did you have in monitoring the narcotics seizures being made at O'Hare? A. Part of my duties were also to research, analyze and examine seizures that were happening at O'Hare. That included anything that was being seized in the entire airport, if it's ecstasy or if it's any other serious drug. Q. So from that experience, do you know how this volume of seizures that you were making at the O'Hare International mail during this time represented in the boxes compared to years past? A. Yes, I do. Q. And so how did it compare? A. These were -- it was a complete higher increase of seizures. We didn't have hardly any seizures of ecstasy in years past and this was something that was -- we never seen before. Q. At some point while you were making these seizures, did you learn about the Silk Road website? A. Yes, I did. Q. Without telling me what you heard about it, approximately when did you hear about -- did you first hear about the Silk Road website? Page 88 A. It was approximately late September, early October, 2011. Q. Did you see that website? A. Yes, I did. Q. Generally, what did you find there? A. I found it was a market that was similar to an online market that was similar to, like, Amazon, for instance, that had items for sale that were mostly illegal in nature that I could see, drugs and various other things. Q. And was there any way to see visually what the drugs looked like that were being sold on the Silk Road? A. Yes, there was. Q. How? A. There were images that were on the website posted near all the listings. Q. I'm going to ask you a lot more questions about Silk Road later, but for now, I'm going to ask what links were you able to make, if any, between Silk Road and the drugs you were seizing at O'Hare? A. We were, during the course of the investigation, we were able to link many of the seizures that we were making there to various vendors on Silk Road throughout a variety of means if it was just comparative of the actual drug we saw, that we seized and matching up the actual drug to what was being seen online and from the same countries, for instance. So, with the Netherlands mail that we primarily started seizing with, it had particular ecstasy pills that -- with certain logos on it and certain colors for the pill and those exact same pills were being advertised from sellers on Silk Road that were from the Netherlands. Page 89 And so using that, and then also conducting undercover purchases to try to match up the envelopes that we were seizing at -- through the mail unit, we were able to draw conclusions that it came from Silk Road. Q. So can you take a look at Government Exhibit 102D, please. A. 102D, Delta? Q. "D" as in Delta. A. Okay. Q. Do you recognize the pages in this exhibit? A. Yes, I do. Q. What do they consist of? A. It consists of a photograph that I took as well as images that I captured, as well as screen shot I took. Q. When you say images that you captured, what do you mean by that? A. I retrieved an image, saved an image from a website. Q. Which website? A. Silk Road. MR. SERRIN: The government offers Government Exhibit 102D into evidence. Page 90 MR. DRATEL: Previously -- can we have a line objection. If I have something different -- THE COURT: Yes, yes. Thank you. Government Exhibit 102D is received. *(Government's Exhibit 102D received in evidence)* Q. Can you publish page one of the exhibit, Mr. Evert. Is this the same thing you saw before? A. Yes, it is. Q. What's on -- these are the three ecstasy pills, right? A. Correct. Q. And they have the Candy Shop logo inside? A. Yes. Q. So can you go to page two of the exhibit. And what does this page reflect? A. This was an image that I retrieved from the Silk Road website. Q. Where did you retrieve it from? A. From a vendor that went by the name of Candy Shop. Q. When you say vendor, what do you mean? A. On the website itself, it was -- anyone can become a user, anyone can register as a user, and they also could choose to register as a vendor, as well, or become a vendor and sell anything that they wanted. Q. Okay. So could we cut to page three, please. What's reflected in this page? Page 91 A. This was a screen shot that I took of Silk Road. Q. And Mr. Evert, can you zoom into that part. What is reflected here? A. This is the listing from Candy Shop of ten Redbulls, ecstasy pills. Q. Okay. So it says seller, Candy Shop there; is that right? A. Yes. Q. And then ships from Netherlands? Is that how you matched it up to a Netherlands seller? A. Yes. I was able to sort the actual website from -- by vendors that shipped from particular country, so I was able to also search Netherlands vendors that way. Q. By the way, the 98, do you know what that means? A. I do. Q. What does it mean? A. It's a feedback rating score for the vendor. Q. And what do you mean by that? A. So the website also had feedback that was on there, so as you would leave -- as you would purchase something from a vendor, you could leave feedback on your order and rate it. And the score 100 would be the highest down to basically one or zero. Q. Let's go on to Government Exhibit 102B, "B" as in boy. A. 102B? Q. Do you recognize this page? Page 92 A. Yes, I do. Q. And how do you recognize it? A. This was a photograph that I took. Q. When did you take it? A. I took it on December 30th, 2011. Q. And what is it of? A. It's me holding up -- I was at the mail unit and I was holding up an envelope that was seized from the Netherlands and I'm holding it up and it also shows the drugs as well as being logged into Silk Road beside it on my computer. MR. SERRIN: The government offers Exhibit 102B into evidence. THE COURT: I'm sorry. I'm not really sure what I'm looking at. What were you -- THE WITNESS: I'm holding an envelope on the left-hand side and then there's drugs also below it; and then on the right-hand side is my computer and me logged into Silk Road. THE COURT: And you took that photograph all at the same time? THE WITNESS: Yes. THE COURT: Government Exhibit 102B is received. *(Government's Exhibit 102B received in evidence)* MR. SERRIN: Thank you, your Honor. Can we publish this exhibit? Q. What's on the left-hand side? Page 93 A. Left-hand side is an envelope that's seized at the mail unit out of the Netherlands mail. Q. And where are the drugs you say you seized from the envelope? A. Below it's hard to see. It's the five dots, small, black holes in the bottom that are five in a row. Q. Did you test those drugs? A. Yes, I did. Q. What did they test positive for? A. For LSD. Q. And what's on the right-hand side of the screen? A. That was -- I logged into Silk Road and found the drugs, the same drugs that we had -- that we had seized on Silk Road. Q. Where did they ship from? A. They shipped from the Netherlands. Q. Let's take a look at one more, Government Exhibit 102C, "C" as in Charlie. Do you recognize these pages? A. Yes, I do. Q. How do you recognize them? A. It was a photograph I took, as well as images I recovered from Silk Road. Q. And how do they relate to one another? A. Could you repeat. I'm sorry. Q. How do the pages relate to one another? Page 94 A. The seizures that we made at the mail unit were all from the same Silk Road vendor that we also recovered images from the Silk Road from that vendor. MR. SERRIN: The government offers Government Exhibit 102C into evidence. THE COURT: Government Exhibit 102C is received. *(Government's Exhibit 102C received in evidence)* MR. SERRIN: Publish the exhibit, please. Q. Could you explain to the jury what the envelopes in the screen reflect? A. The envelopes, each one is an individual seizure we made. And outside of the envelopes from the drugs that were recovered, we placed the drugs on top of the envelopes. The one closest to the bottom is an amphetamine that we seized, as well as ecstasy pills, MDMA, crystal. Q. Walk up from the bottom. A. Starting from the bottom, we had amphetamines as well as above it five blue ecstasy pills and above that, it was crystal MDMA powder, and as well as above that, cocaine. Q. And one of the envelopes says Dr. Amsterdam written there. Who wrote that? A. I did. Q. Why did you write that there? A. I had previously linked these envelopes to that vendor on the Silk Road username. Page 95 Q. How did you do that while we go to the next page? A. Those are the seizures that we were seizing matching up these drugs to the images that were found by that one particular vendor. Q. And just to be clear, these images, is this how you found them on Silk Road, all bunched together like this? A. No. Q. How did you find the images on Silk Road? A. Each individual image was attached to the listing for that particular product. Q. And you made a collage out of them here essentially? A. Yes. Q. So, can you put the two side by side, Mr. Evert, the first page and the second page. While he's doing that, can you just explain how you matched them up? A. So for instance, the amphetamines had the same appearance and they also tested positive for amphetamine, which was being advertised by this vendor. There was the same pills that were being offered by that vendor that we were seizing, as well as the MDMA and the cocaine. It was an unusual combination of various drugs and the particular pill, which not all the same vendors on Silk Road sold the same pills. They had all different types of pills that they would sell as well. So this was -- this was a particular envelope style that was all the same that contained the same drugs that was being offered by this vendor that was on the Silk Road. Page 96 Q. When you say unique combination, what do you mean? A. For instance, one vendor might just sell ecstasy or might just sell LSD, just one drug or one type of drug. This particular vendor offered multiple different drugs and we were able to seize those same drugs and the same pills from a particular style of envelope, the same style envelope. Q. Let's discuss in more detail what you learned about how Silk Road worked. How did you familiarize yourself with the various features of the site? A. I navigated it myself. Q. Did you establish any undercover accounts on the site? A. Yes, I did. Q. Approximately how many over time? A. Probably four or five. Q. And were you able to access any other user accounts that you didn't yourself establish? A. Yes, I did. Q. And how did you do that during your investigation? A. Various accounts would -- through the course of the investigation would either be turned over to us by people that we interviewed or talked to, some people we arrested, as well as not just regular accounts but also accounts that belonged to vendors as well as acquired administrator account. Page 97 Q. What do you mean by administrator account? A. It was one of the staff member accounts for Silk Road. Q. So did Silk Road have a support staff? A. Yes. Q. And what was the name of your support staff account that you eventually took over? A. The name was Cirrus. Q. When did you take that account over? A. It was July 2013. Q. How did you -- how long did you operate that account? A. Operated it from July 2013 until we shut down Silk Road. Q. When was Silk Road shut down? A. October 2, 2013. Q. Do you know when the defendant was arrested? A. He was arrested October 1, 2013. Q. So you were a staff member at the time of the defendant's arrest? A. Yes, I was. Q. I'm going to come back to your Cirrus account later, but let me ask, how often during your entire investigation did you visit the Silk Road website through the various undercover accounts that you controlled? A. Early on, it was once every few days, but then eventually it became everyday. Q. Approximately how many hours would you say you spent on the site in total? Page 98 A. Thousands I would say over the course of a few years. Q. Did you do any undercover buys on the site? A. Yes, I did. Q. Approximately how many? A. Approximately 50 or more. Q. So how would you even get to the Silk Road website? Just go to silkroad.com? A. No. You have to use it -- use a special program referred to as the Onion router, short for Tor, to access the actual website. Q. What was the web address of Silk Road, do you remember? A. It was silkroad Victor Bravo -- I'm doing it -- sorry. Q. Just stick with the letters. A. Sorry. Sounds all the same. Silkroadvb5piz3r.onion. Q. What is a dot onion? A. Yes. Q. What kind of web address is that? A. The dot onion would be a website that resides within Tor. Q. So generally, what is the Tor network? What's it do? A. Tor, the Tor network, it's a network on the Internet that anonymizes your traffic, anonymizes who you are and allows you also to visit these websites within Tor which are also known as hidden services. *(Continued on next page)* Page 99 Q. Is there anything illegal in and of itself about the Tor network? A. Using Tor itself is not illegal, no. Q. So is there any way to access Silk Road through the ordinary Internet? A. No, there is not. Q. You had to access it through Tor? A. Yes. Q. Did you access the Tor network as part of your investigation? A. Yes, I did. Q. Every time you visited Silk Road? A. Yes, I did. Q. Was it hard to get on the Tor network? A. No, it wasn't difficult. Q. What did you have to do? A. Visit the website, which is at torproject.org, and you can download its program, which included -- it is a Tor program bundled, which included a browser that -- Internet browser that you could use then to access this network. Q. And when you used this Tor browser, how was it different from browsing the Internet with an ordinary browser from your perspective? A. It was -- it is similar in features as a normal Internet browser, but it will allow you basically to remain anonymous while you are using the Internet and visiting other websites. Page 100 Q. When you say that, what do you mean "remain anonymous?" What information would it conceal? A. The browser itself protects your IP address, your Internet protocol address that you have when you are using the Internet. Q. What is an Internet protocol address? A. It is a unique number that is generally assigned to you when you are using a computer on the Internet. Q. Do you know how to find your IP address on your computer? A. Yes, I do. Q. What does it look like? A. It is a series of numbers. Q. So give me an example. A. Something like 50.19.236.250. Q. And what is an Internet protocol address used for? A. It's used to basically communicate when you are on the Internet from if you want to visit a website, it needs to know the connection. So your IP address is basically what identifies you on the Internet as well as any other computers that you visit or any other website you visit has to be an IP address as well. So it helps to navigate the Internet. Q. In preparation for testifying today, did you prepare a demonstration of a login of a Tor network? A. Yes, I did. Q. What kind of demonstration did you prepare? Page 101 A. It's a video that I made using my computer, using software to record what is going on within the computer. Q. When we're planing the video, can you explain the concepts we are discussing? A. Yes, I would. Q. Would you turn to Government Exhibit 107. Do you see anything there? A. Yes. Q. What do you see? A. It's a disc, the government exhibit -- I'm sorry, the government evidence disc that is labeled for the video I played. I know that because I initialed it. MR. TURNER: Your Honor, the government would request that we be able to play the video for the jury. MR. DRATEL: Just our prior objection, your Honor. THE COURT: All right. Government Exhibit 107 is received and you can publish it by playing it. *(Government's Exhibit 107 received in evidence)* MR. TURNER: May I approach, your Honor? THE COURT: Yes, you may. MR. TURNER: Mr. Evert, just let me know when you are ready. MR. EVERT: I am ready. Q. OK. So Agent Der-Yeghiayan, once we put this up on the screen, could you just direct Mr. Evert when to play and when to stop so you can talk through the video and explain what is being shown? Page 102 A. Sure. So this is -- so I'm doing right now -- do you want to pause it real fast, actually? Sorry. Go back. On the right-hand side I, just for easy, put two websites up on there. The top one is a website that you can commonly find your IP address on the Internet, and it will also show your location on a map based off that IP address. And you can simply do that by plugging it into an Internet browser and it will run and tell you what your IP address is. And then the second address that's on there is one that is a hidden service that I was describing on Silk Road. Q. I'm sorry, a hidden service? A. A hidden service that ends in ".onion." Q. So let's be clear. The second Web address, that is the Web address of Silk Road or another -- A. No. Sorry. Silk Road was shut down by this point so it is a different hidden service. Q. OK. Go ahead. A. OK. I'm sorry. If you could play -- I am going to start by basically visiting this first website with the normal browser that you would use. I am connecting to the Internet right now. And I just put in a net address. If you want to pause it. By inputting that address into the URL bar, it pulls up the Web page and the Web page then will tell me what my IP address is and put me on a map so I can see where I am basically from. Page 103 Q. A couple of things. When you say "URL bar," what are you referring to? A. It is the Internet bar up on top. Q. The address bar here? A. Yes. Q. Where is your IP address reflected here? A. It is reflected on the map itself and also down below right now. Q. Right here? A. Yes. Q. OK. Go ahead. A. OK. And so if you want to play. This shows me that I am in Chicago. This is my IP address where I am currently at in Chicago. And so now I'm going to take that hidden service dot-onion address and I am going to try to visit that -- do you want to pause it, please. I tried to visit that using the regular browser. So I put in the same dot-onion address and tried to visit it and it comes back as being not available. Q. Go ahead, please. A. If you could play it, please. So now I minimized that browser and I am going to open up the Tor browser, which this is the Tor browser and I am going to do the same steps I did before. So I'm copying the address that tells me where I'm located, and I'm running that in the Tor browser and it's going to tell me where I'm located. Page 104 If you can pause it, please. And so the Tor browser makes it appear as if I'm coming from Germany. And so it says my IP address is in Germany. So any website I visit using the Tor browser right now will think I'm in Germany. Q. And where is your apparent IP address listed on the page? A. It's in the white box in the middle as well as down below. It is the 188.138.9.489. Q. If you want to -- was that your actual IP address? A. No, that is not my actual IP address. Q. OK. Go ahead. A. And now if you want to play it, I'm going to try to visit that same hidden service, dot-onion address that I visited or tried visiting with the regular browser, and I am going to try it now using the Tor browser. And if you pause it. And so just by simply entering the same dot-onion address now with the Tor browser, it makes the website appear. So you can visit it only if you are using the Tor browser. Q. Please continue. A. And then just to show an example, with the two browsers side-by-side, I could be on the Internet. It just depends which browser I am using. One will be my true IP address on the left-hand side and the other one will be not my true address, which is one that Tor protects basically the user behind it. Page 105 Q. All right. So the video shows how Tor masks your IP address. From a law enforcement perspective what is the significance of an IP address? A. An IP address we can use to identify someone that's potentially doing something behind a computer that is doing things on the Internet. Q. So how? How is the IP address potentially useful for that purpose? A. In other investigations that I have done as well as in this investigation, if we had an IP address, we could use that to then do a search on the open Internet, and it will tell us who the Internet service provider is. And from there we could subpoena that company and do some other type of legal process or request who is the person that is either renting or leasing that IP address for that given moment in time. Q. When you say "Internet service provider," what does that mean? A. Internet service provider is a company that basically assigns out and owns IP addresses that provides you your Internet service that comes to your house, something like Time Warner or Comcast. Page 106 Q. So let's say I'm a Time Warner customer and I use my Internet connection to do something illegal on the Internet and you as a law enforcement agent find out what I did and the IP address associated with it. So just where would you go from there? A. So if you are a Time Warner customer and you -- and I guess if we are able to get your IP address from another website or from someone else that provided it to us or through investigation, I would do a search for that IP address on the open Internet. There are several websites that you can use to try to find out who the Internet search provider is. Q. It will come back to Time Warner? A. It would come back to Time Warner. Once I found out it was Time Warner, I would then issue a subpoena likely to Time Warner, and I would ask them for the subscriber information for the person that would own that particular IP address on that given date and time. Q. All right. And so if I instead use Tor to do the same thing, would the same technique work? A. No, it would not. Q. And why is that? A. Because that IP address that Tor protects you with is not your IP address; it belongs to one of the relays or the parts of the network. It is not you. Page 107 Q. How about a computer that hosts a website, are you familiar with the term "server"? A. Yes, I am. Q. What does a server mean in the context of the Internet? A. Server is just basically another word for a computer that usually hosts a website or can run a website. Q. And do you have any experience tracking down the location of a server based on its IP address? A. Yes, I do. Q. So if a law enforcement officer -- as a law enforcement officer, you are trying to track down the location of a server that hosts a website on the ordinary Internet, how would you go about that? A. Generally, not too different than how we would search for someone that had an IP address in a similar way. You could do open searches on the Internet, again, through like websites like who.is or the main tools that will tell you what an IP address is for a particular website, and it would be the same steps basically from there. We would find out who the Internet service provider it. The Internet search provider will then tell us who the subscriber is. Sometimes it might come back to a hosting company, which is generally used to host websites, or sometimes it can be the subscriber themselves that are operating that website. Q. You mentioned the who.is website. Would you just explain what kind of website that is? Page 108 A. It is a website that you could search its domain names like the www.nfl or Google.com, things like that. Q. Do you see Government Exhibit 106A, I believe it is, in your binder? A. All right. Q. Do you recognize what these are, these pages are? A. Yes, I do. Q. What are they from? A. It's a screenshot of the website "who.is." Q. All right. Would it be helpful in explaining these concepts to show this as an example of the who.is website, what it does? A. Yes, it would be. MR. TURNER: Your Honor, we would offer this as a demonstrative just to show how this website works. THE COURT: This is Government Exhibit 106B? MR. TURNER: I believe it is 106A. Q. Is that it? A. A. THE COURT: All right. Mr. Dratel. MR. DRATEL: I'm sorry, we were just -- the same objections, your Honor, that we had before. THE COURT: All right. I will assume it is the same as the prior objection. Page 109 MR. DRATEL: Yes. THE COURT: My exhibit list I think doesn't have this from the prior. We will deal with it at the break. Government 106A is received. *(Government's Exhibit 106A received in evidence)* MR. TURNER: Could you publish it, Mr. Evert. Could you zoom in up at the top. Keep going. There you go. Thank you. Actually, you are going to have to zoom in some more under the sticker, please. There you go. Yes, that is good. MR. TURNER Q. OK. So, just briefly, what does this document show? A. This shows the -- it is the who.is website. Q. And what is it a search for in the who.is website? A. This is a page on the who.is website of a search result. If you were able -- if you were to search in the box up above that says "search domain name or IP address" and enter in a domain, in this instance we looked up NFL.com, it will tell you the who.is information for that particular website, including IP address. Q. OK. Where is the IP address located here? A. It's down at the bottom in the blue colored numbers. Q. All right. And have you tried doing the same thing for a dot-onion address? A. Yes. Page 110 Q. Could you turn to Government Exhibit 106B. What is this document? A. This is who.is as well as trying to search a dot-onion address. MR. TURNER: Your Honor, again, we just offer this as a demonstrative to show the jury how this website works. THE COURT: All right. Government Exhibit 106B is received as such. *(Government's Exhibit 106B received in evidence)* MR. TURNER: Publish that, Mr. Evert. Zoom in, please. Q. OK. So what does this show? A. This would be what would generally show up if you tried to query or search for a dot-onion address. In this instance, that is the same address that I had in my video for the dot-onion address that we visited on there. Q. OK. So -- THE COURT: Mr. Turner, just for your planning purposes, there will be a couple of housekeeping matters that we will have to take up. So why don't you end in just a few minutes. MR. TURNER: This is a good place to stop, actually, your Honor. I was going to shift to another topic. THE COURT: All right. Ladies and gentlemen, we are going to break for today. I want to give you a couple of instructions. Joe will give you instructions about how to gather up your stuff and get out and where you should leave your notebooks and things like that. Page 111 I want to remind you not to talk to anybody about this case, including each other, anybody at all. Please don't try to become experts on the different parts of the Internet that you may have heard about. Don't do any research or get on and Google things or try to downloads the Tor browser. Again, it is important that all you do is listen to the evidence in this courtroom, and that's the evidence that will be used by you to decide the factual issues in this case. Again, don't email anybody about this case or update your profile in Facebook. We're going to start at 9:30 each day. So it is important that if you can get here by about 9:15, get yourself in place and all of that, that would be very helpful. Again, you can bring coffee in or tea, or whatever, water, or whatever you would like so that when we start at 9:30 we are ready to walk out and get going. We can't start until each and every one of you, all 16 of you, are here. So just be aware of that and try to be on time. It very important. Otherwise, this whole room is waiting for you. All right. Now, tomorrow when you come in, I don't know -- we've got a bunch of different cases going on right now in the courthouse. If there is anybody outside who has got any of those pamphlets or posters or anything like that, I instruct you that you are just to put your head down and keep walking. Don't read. Don't look. Don't commune or confer with anybody about anything outside of this building that might have to do with the case or the jury process or anything else. OK? Page 112 If you find that you have been approached by somebody or inadvertently you have seen something, let Joe know and then we will take it up. But I ask you, please, to try to avoid any media about this case in terms of newspapers or anything else as well as whatever may be going on outside. All right? Thank you, ladies and gentlemen. We'll see you tomorrow morning. THE CLERK: All rise as the jury leaves. *(Continued on next page)* Page 113 *(Jury not present)* THE COURT: All right. Sir, you can step down. We are going to continue tomorrow morning at 9:30. So I will have you back on the stand at 9:30. THE WITNESS: Thank you, your Honor. THE COURT: Go ahead and step out. THE WITNESS: Thank you. *(Witness not present)* THE COURT: Ladies and gentlemen, let's all be seated and we'll take up a few matters now. First, and just in terms of the logistics, so I have two exhibit lists, the one that was handed to me this morning, that is I think the updated government exhibit list and then I have the one that has all of the objections on it. To the extent that there are documents that are on the new list that were not on the old list, I don't have any indication as to objection. That was the nature of why I said I assume it is the prior objection for 106B. And so I am assuming that Mr. Dratel has had an opportunity to see the documents that are not on my prior list. MR. TURNER: That is correct, your Honor. THE COURT: All right. So, Mr. Dratel, we'll take it step-by-step, but if they are just going to be the same documents of a type, then your other objections will be, I think, obvious. Page 114 MR. DRATEL: OK. THE COURT: And my rulings will be similarly, and the basis therefor will similarly be obvious. MR. DRATEL: Right. Some of them we received over the last couple of days so I'm not even sure if they are on the government's list. So sometimes it is hard to -- at least the one that we have, but it is hard to make the comparison the same way that the Court is doing. I am trying to do it in a way that covers that. THE COURT: All right. So we'll just take it step-by-step. It's not my practice to have standing objections throughout the entirety of a case, particularly when virtually all the documents were objected to. But we'll take it, again, step-by-step. So today we had a standing objection that stood for all of the documents this afternoon. It may be, Mr. Dratel, that that makes sense for tomorrow. Why don't you go through a couple and then do something similar. If you are finding it is the same, I don't mind doing that. If it is going to be repetitive for you, I don't think it is necessary for you to seem to be objecting all the time if you don't want to be, and I understand that. MR. DRATEL: Yes. And I'm not sure whether the Court -- I will check with counsel as to whether the Court included objections in your instructions to the jury about not to take any -- you know, I know the Court said nothing you say is evidence and nothing you say expresses an opinion. I'm not sure you mentioned objections specifically. But, obviously, I am conscious of that issue -- Page 115 THE COURT: Yes. I am happy if you would like me to give an instruction to the jury that, ladies and gentlemen, you should not draw any inference of any kind from the objections that counsel may make on either side. It is their responsibility and it is expected. And if you want me to do something like that, I am happy to do it. Why don't you let me know in the morning. MR. DRATEL: I think so, yes. We will discuss it. Thank you, your Honor. THE COURT: Now, that is on the objections. Was there anything you folks wanted to raise? I've got one more matter. MR. TURNER: No, your Honor. THE COURT: One I want to take up at the sidebar but one I want to do here. All right. Outside there are still some folks. That's what I was checking on before. Now, it's, frankly, going to -- what we'll have to do is -- and I think that the defense has not wanted this and so I am not suggesting the defense has any control over this. But to the extent that there are still people outside the courthouse who are approaching jurors and approaching people who they perceive to be jurors, it creates obviously issues for us and does lead us to the need, potentially, very potentially, for an anonymous jury. I am happy to make that decision tomorrow, to let it go into the morning and see whether or not we have any issues tomorrow morning. But if we do, then we will have to go with an anonymous jury and have the jurors also have -- be brought out to a different place and brought in specially. Page 116 I prefer for the defendant not to do that. I know, Mr. Dratel, you have objected and not wanted to have an anonymous jury. But if individuals are continuing, I don't really know if we've got much alternative. Do you have any views? MR. DRATEL: Yes. I will put it on the record so that maybe the press will report it, that the people think that they are helping the defense by being out there doing this. They are not. THE COURT: Correct. MR. DRATEL: When it gets to that stage that the Court has to act, it hurts us. Hopefully, that will be reported and that will reach the people. THE COURT: The Court has held off. We will try to take it step-by-step, but at this point the defendant would not like to go this way but, really, it leaves me no alternative. MR. DRATEL: Obviously, let's see how it plays out tomorrow, but I am sort of stating that on the record so that, hopefully, the people are out of my control and out of Mr. Ulbricht's control and will desist on their own. Page 117 THE COURT: We will see how things go tomorrow morning and then we'll make a decision, but we won't let it go any longer than that because it's a classic reason to allow for additional procedures. Now, those are the matters that I had apart from one additional item I wanted to take up over at the sidebar. Are there things that you folks would like to raise right now? MR. TURNER: No, your Honor. Thank you. MR. DRATEL: No, your Honor. THE COURT: All right. So we will start tomorrow morning at 9 o'clock, take up any additional housekeeping matters that may come in overnight. If there is anything tomorrow morning that you folks want to alert me to in terms of what might be coming up that I should be aware of, surprises, etc., you will let me know tomorrow morning at 9. If we don't need to take up all the time between 9 and 9:30, so be it, we will take a break and get some coffee. Can I have counsel at sidebar, please? *(Pages 118 through 119 sealed by order of the Court)* Page 118 Page 119 Page 120 *(Adjourned to January 14, 2015 at 9:00 a.m.)* * * * INDEX OF EXAMINATION Examination of: Page JARED DER-YEGHIAYAN Direct By Mr. Serrin . . . . . . . . . . . . . .71 GOVERNMENT EXHIBITS Exhibit No. Received 100A . . . . . . . . . . . . . . . . . . . .80 100C . . . . . . . . . . . . . . . . . . . .83 104 . . . . . . . . . . . . . . . . . . . . .85 102D . . . . . . . . . . . . . . . . . . . .90 102B . . . . . . . . . . . . . . . . . . . .92 102C . . . . . . . . . . . . . . . . . . . .94 107 . . . . . . . . . . . . . . . . . . . . 101 106A . . . . . . . . . . . . . . . . . . . 109 106B . . . . . . . . . . . . . . . . . . . 110 Page 121 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA, v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant. ------------------------------x New York, N.Y. January 14, 2015 9:20 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York BY: SERRIN A. TURNER TIMOTHY HOWARD Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal Sharon Kim, Government Legal Intern Page 122 *(In open court; jury not present)* THE DEPUTY CLERK: Continuation of the matter now on trial, United States of America v. Ross William Ulbricht. Counsel, state your names for the record. MR. TURNER: Serrin Turner for the government. With me at counsel table is Timothy Howard and Nicholas Evert, a paralegal from our office, as well as Molly Rosen, another paralegal. THE COURT: Thank you. Who is the person at the very far end? MR. TURNER: I'm sorry. That's an intern from our office, Sharon Kim. THE COURT: Thank you. Good morning. MR. DRATEL: Joshua Dratel for Ross Ulbricht standing next to me, also Lindsay Lewis from my office and Joshua Horowitz is counsel as well. THE COURT: Good morning. I have a couple of things to go over with you folks and then if you have any items that you want to raise, we'll take those up. One is, I wanted to make sure that everybody is okay with the position of the podium. I know that, Mr. Turner, in the middle of -- or at the very commencement of your direct yesterday, I had you move it back so that really jurors nos. 5 and 6 could have a clear view. I didn't know if you felt that setting up in that way somehow caused any concern in terms of your voice carrying or anything else. Page 123 MR. TURNER: No, your Honor. THE COURT: Terrific. In terms of the protests and/or people being outside in the front, there is nothing. As I understand it, it's empty out front in terms of that. There's just the normal morning traffic. Does anybody have any other information? MR. TURNER: No, your Honor. THE COURT: Mr. Dratel? MR. DRATEL: No, your Honor. THE COURT: Terrific. Hopefully, that will be behind us. In terms of the schedule, as you folks know, we don't sit on Fridays. I forgot to mention that to the jury yesterday, and I will do that this morning. Has there been any confusion on counsels' part as to that schedule? MR. TURNER: No, your Honor. MR. DRATEL: No. THE COURT: I'll go ahead and mention that to the jury and make sure that they understand: No trial on Friday. In terms of the defense, obviously, Mr. Dratel, you don't have to preview any evidence at all. It's not your burden. But I did note, just in terms in timing, that you hadn't previewed the names or even, generally speaking, the identity of any particular type of witness, whether there's going to be a computer expert, for instance. And for my planning purposes, we don't have to say anything to the jury. I'm wondering if there's somebody that you know of who is going to take up at least a week of time. I don't need to know who they are, but what are you predicting that point? Page 124 MR. DRATEL: Obviously, without seeing the rest of the government's case as to whether we'll even call some people because I may get them all done through the government's witnesses, -- THE COURT: Yes. MR. DRATEL: -- but I think that right now, we're looking at probably a defense case even -- my estimate right now, it's very rough, is probably three or four at the most. THE COURT: Days? MR. DRATEL: Yes. That's probably the most. THE COURT: That's fine. I do understand it's fluid. MR. DRATEL: Depending on when we get done. It could be two or one depending on when we get done with the government's case. THE COURT: I understand it's fluid. Most of it will depend on what happens in what's to come with the government's case, so you're by no means held to that. I'm just trying to get a sense of whether or not you had a computer expert in your pocket who you were thinking of having on the stand for a week, in which case, I just wanted to know that. Page 125 MR. TURNER: May I speak to that briefly. The defense is required to give us notice of any expert they plan to use and we have asked for any such notice. None has been given. So if any expert is sprung on us at the last minute, we will object for lack of notice. THE COURT: I assume you folks are giving each other all of the required notices that are necessary. I had just noted yesterday during the opening that there hadn't been a preview of anything in particular, but nor is the defendant required to do so. MR. DRATEL: Yes. And we'll provide, as soon as I have a firm intention to call a witness, we will provide it. If it's an expert, we'll do it at the earliest possible rather than at the latest. THE COURT: Terrific. Thank you. Then, did you, Mr. Dratel, want me to give the jury an instruction on ladies and gentlemen, you'll note that there are objections and there will be objections by counsel for both the government and the defendant from time to time, that's perfectly appropriate, indeed that's expected and that's counsel doing their job and you should draw no inference from the fact of objections or the Court's rulings? MR. DRATEL: I have written something up but you just covered it. Page 126 THE COURT: If you have a script, I'm happy to take it to make sure I cover whatever wording you prefer. Let me just read what you've got and see if the government has any comments. MR. DRATEL: Mine might be a little long. THE COURT: This won't take more than 30 seconds to do. MR. DRATEL: Okay. THE COURT: I'm happy to do this. Mr. Turner. MR. TURNER: I have no objection to the language. THE COURT: I will use your language, Mr. Dratel. MR. DRATEL: Thank you. THE COURT: I'll do that at the beginning. And then lastly, I just wanted to comment, as you folks know, we spoke a little bit pretrial about the fact that this case may involve varying amounts of technology. As you heard during the voir dire process, I told the jury they don't have to be experts in technology. They'll be provided with whatever evidence there is that they need to make a decision based on one way or the other during the trial. I did suggest to you folks that a glossary would be helpful or something like that. I understand you have not been able to reach an agreement, and so be it. In a criminal case, I am not going to try to come up with something or impose something. Page 127 I do want to note that to the extent the government has a view about the clarity of yesterday, I think what came out is that there's something called a tor browser. What that is I think is mumbo jumbo to most people on the jury right now. I think they understand there's a tor browser and another browser and they're different, and that tor is associated with Silk Road, but I think that that's about all that came out. So in terms of -- that will be up for the jury to decide. They may have heard it differently, but in terms of clarity, I do think clarity of the evidence is important here. The jury I do think needs to understand things. I wanted to give you a sense that there still is room for clarity. MR. TURNER: Okay. What we hoped to convey is that it also hides the IP address of the user; in our view, that's really the essence of what they need to understand. We're not seeking to try to provide a seminar on how tor works. We don't think it's really necessary, but I think the point is, it hides an IP address and, therefore, allows people to anonymize their identities and their locations. That's really all we're trying to get across. THE COURT: How ever you choose to put on the evidence and whatever points you think are most important is entirely up to you. I wanted to let you know that sometimes when you're living and breathing a case for so very long and you try to reduce it down to something that's simple, it can even be more complex than you often think, but you folks ultimately will do what you choose to do. Page 128 That's what I had. What did you folks have, if anything, that you would like to raise before we bring the jury in? MR. TURNER: Nothing else. MR. DRATEL: Nothing, except the instruction. THE COURT: How are we doing with the jury? Today is the first day, but we're getting a sense as to the time timeliness of the jury. We are currently waiting on nine. Hopefully, they'll be here shortly, but there still is jury selection going on in another big case and there are a substantial number of people still coming in downstairs as a result, which can cause some delays. So let's just take a quick break until we have got more information and hopefully we'll get our entire group here shortly. Thank you. THE DEPUTY CLERK: All rise. *(Recess)* THE COURT: Let's be seated. We have a decision to make. We are missing one juror. We have 15 of the 16. We have all except for juror no. 3. So it's the juror in the third seat. At this point, and we have called his cell phone a couple of times and gotten his voicemail and we have not received any phone calls from him, and they were instructed if they were going to be late to call. Page 129 At this point, I would be willing to proceed with one of the alternates, but I also don't think it's been such a very long time that if anyone has any opposition to that, that I would hesitate to wait a little bit longer, but we should then talk about how long we wait before we then proceed. Let me also say before people discuss their views on this that it would normally be my practice, barring any reason to do anything differently, that if the alternates are used, the alternates are used in the order in which they're seated. So we would use alternate no. 1 first, alternate no. 3 and then no. 4 so we would proceed along. So that would mean alternate no. 1 one would come down and sit in the open chair. Views? MR. TURNER: The parties briefly conferred, your Honor. I think we both agree we should provide a little more time. It's the first day after yesterday. The juror may be unfamiliar with the area, may have gotten lost, there may be a problem with the subway. Who knows? THE COURT: Have you folks discussed what amount of time you either individually or mutually agree would be the right amount of time? And I'll see whether I agree. MR. DRATEL: We haven't discussed that. THE COURT: Why don't we say 10:30 then? They were supposed to be here by 9:15 to be ready. I think a full hour, if we're unable to reach him on his cell phone and he doesn't call us, then I think that would be the right place to cut it off. Page 130 MR. DRATEL: Can we come up for a second. THE COURT: Sure. Come on up. *(At the side bar)* MR. DRATEL: The reason wanted to do it side bar, I didn't want to draw attention to the juror or embarrass him or anything. And I can't remember -- I know who juror no. 3 is, but I can't remember right now as to whether he identified where he works. But is there a possibility we could call there to find out whether, you know, he's got some problem there? I don't know what the situation is with people. Sometimes they don't recognize the implications for being chosen on a case and then all of a sudden, other things come up. And also, I guess we could maybe we could text him, too, if we have a cell number, sometimes at least -- even on my phone, sometimes texts are much more immediate in terms of my recognition of them than telephone calls. THE COURT: We have his contact information, including the mobile phone. So have we called only the mobile phone? THE DEPUTY CLERK: Yes. THE COURT: So we called the other -- we have one other number. Page 131 THE DEPUTY CLERK: No, just the mobile phone. THE COURT: Have we texted yet? THE DEPUTY CLERK: Not yet. THE COURT: We'll text. And that would be what we do and then we'll see -- I thought yesterday my explanation was, I hoped, clear. I'll reiterate it this morning that we can't start unless they're all here. We'll do that right away. And at 10:30, let's confer and see where we are. MR. DRATEL: Okay. THE COURT: All right. So I'm going to have my deputy text juror no. 3. *(In open court)* THE COURT: We're going to take a break until 10:30 or until we have a first array of jurors, whichever comes first. It is likely as a result that our mid-morning break will be truncated, so you folks should just take that into consideration. *(Recess)* *(Continued on next page)* Page 132 *(Jury not present)* THE COURT: All right. We now have a full jury and Juror Number 3 has apologized to my deputy profusely for his tardiness. So we are ready to proceed. THE CLERK: All rise as the jury enters. *(Continued on next page)* Page 133 *(Jury present)* THE COURT: All right. Ladies and gentlemen, let's all be seated. Thank you. I've just got a couple of housekeeping matters to address and then one other issue. There is not going to be trial on Fridays unless you are deliberating. All right? So Friday is a day that I do everything else, essentially, and counsel prepares to make use of the time most efficiently. So we won't have trial on Fridays. Now, if you are deliberating -- and there will be a point when you are deliberating -- then we will sit on Friday, but that's not going to be for several weeks. OK? So you are not going to have to report for trial this Friday. Also, Monday is Martin Luther King Day and that is a court holiday. The court is closed on Martin Luther King Day. And so there won't be trial on Friday or Monday, but we will be picking up on every other day of the week. The second matter is that we are going to be serving you breakfast -- a continental breakfast in the morning and giving you folks a coffee service. When I say "coffee service," it is coffee, it is tea, it is also water that you will have. So there will be a continental breakfast, and I do know that things happen in terms of people's ability to get here on time but that is an added incentive to try to get people here so that we can start promptly. Page 134 Now, the last thing is that you have heard yesterday the beginning of the first witness and you heard counsel objecting, and I wanted to just make sure that you understand that objections and lodging objections by counsel is perfectly appropriate. It is expected. You are not to draw any conclusions from the objections made by counsel. It is part of their job. And, similarly, don't draw any conclusions from my rulings other than whether the evidence in question or answer is admissible. The objections relate to legal issues and principles that are within my authority to decide, and making objections to evidence or questions or answers is entirely appropriate regardless of my rulings on any particular objection. And you will hear throughout the course of the trial both -- all counsel making objections when appropriate. All right? So I just wanted to make sure you all had heard a little bit about that. Now, without anything further, we are ready to proceed. I want to remind you, sir, that you are under oath from yesterday. THE WITNESS: Thank you, your Honor. JARED DER-YEGHIAYAN, resumed, and testified further as follows: THE COURT: All right. Mr. Turner, you may continue, sir. Page 135 MR. TURNER: Thank you, your Honor. DIRECT EXAMINATION (Resumed) MR. TURNER Q. So, Agent Der-Yeghiayan, we left off yesterday with you explaining that Silk Road was accessible only through a special network on the Internet; do you remember that? A. Yes, I do. Q. Could you just remind the jury what that network is called? A. It's called the Tor network, which is short for the Onion Router. Q. So what basic advantage does the Tor network give you as a user? Is it faster? A. Not necessarily. It provides anonymity to you so it protects you, your location on the Internet. Q. You explained a little bit of this yesterday. But, again, what specific information about you does it protect or conceal? A. It conceals your Internet protocol address, which is your IP address. Q. And a website operating on Tor, what is that called again? A. It's called a hidden service or a dot-onion address. Q. And what is the advantage of operating a website as a hidden service on Tor? A. Some of the advantages of doing that is it is harder to identify that website's IP address so it could also remain anonymous on the Internet. Page 136 Q. And at a basic level, how does Tor conceal a user's IP address, if you know? A. So basically it is a network on the Internet that is made up of a lot of computers, and when you're using that Tor browser that I showed you yesterday, that will allow you to enter into this network, and that network then will rout your traffic on the Internet through multiple computers, which basically protect you each step of the way. So it's hard for one computer to know who you are and vice versa until you exit the network and visit a regular website as well as if you visit a website within the network itself. Q. Could you turn to page -- or what has been marked as Government Exhibit 106 in your binder. Do you recognize this exhibit? A. Yes, I do. Q. Is it a diagram of some kind? A. Yes. Q. Would it aid your testimony, would it help you explain these concepts by showing this exhibit to the jury? A. Yes, it would. MR. TURNER: Your Honor, the government requests to publish the exhibit as a demonstrative. MR. DRATEL: No objection, your Honor. THE COURT: All right. Received. *(Government's Exhibit 106 received in evidence)* Page 137 MR. TURNER Q. OK. So could you just explain what the diagram shows? A. Sure. Q. You can use your laser pointer. That would be great. A. So if you are a user with your computer, this would be the entire Tor network itself which is made up of a lot of computers on the inside of it. Basically, if you want to visit another website, even if it is a hidden service that shows it is outside of Tor, which technically is inside of Tor, you would enter into the Tor network, and what the Tor network would do then is route you between multiple computers before you actually reach that website. Q. What are those computers called? A. So these internal computers within the system are called relays, and the ones that are on the external, on the outside, are called nodes. Q. OK. And I am going to use my dueling laser pointer here. So this computer, the first node that you hit, does it know your IP address? A. Yes, it does. Q. How about this computer here, which IP address does it know that your traffic is coming from? A. It will only know the computer that it came from and the next computer that it goes to. Q. Could you just explain? Page 138 A. Let me just -- so this computer would only know this IP address, and then whenever it sends the message along, it will only know the next computer's IP address. Q. So just to be clear, this computer knows the -- thinks the traffic is coming from that IP address, is that right? A. Yes. Q. This computer thinks the traffic is coming from that IP address? A. Yes. Q. And so on? A. Yes. Each computer has its own IP address internally within the network so it will only know the previous computer and the next computer's IP address. Q. So by the time that the traffic hits the hidden service at the end of the chain, what IP address does the hidden service believe the traffic is coming from? A. So the hidden service will only see that last computer, that last IP. Q. So the original IP address is hidden by multiple layers of other computers in the chain? A. Yes. Q. OK. And you mentioned yesterday that a hidden service has a special kind of Web address? A. Yes, I did. Q. Would you remind the jury what those Web addresses are called? Page 139 A. It ends in dot-onion. Q. So, again, what was Silk Road's dot-onion address? A. It was silkroadvb5piz3r.onion. Q. Was that the only dot-onion address it ever had or did it change sometimes? A. It changed. Q. Was that the last one it had? A. That was the last one it had. Q. So when you typed Silk Road's dot-onion address into the Tor browser -- and I should just be clear, you talked about the Tor browser yesterday, right? A. Yes, I did. Q. Do you have to have the Tor browser to access the network that we just saw? A. Yes, you do. Q. So when you type the dot-onion address of Silk Road into the Tor browser, what would show you up? A. The first page of the website, which should be basically a user login screen. Q. Sir, could you turn to what has been marked as Government Exhibit 108. A. OK. Q. Do you recognize this document? A. Yes, I do. Page 140 Q. How do you recognize it? A. I took this screenshot. Q. And what is it a screenshot of? A. It is of the first page, the user login page for Silk Road. MR. TURNER: The government offers Exhibit 108 into evidence, your Honor. MR. DRATEL: Your Honor, this is of the same character as yesterday's, so -- THE COURT: 108 is received. MR. DRATEL: Thank you, your Honor. *(Government's Exhibit 108 received in evidence)* MR. TURNER: Could you publish Government Exhibit 108, Mr. Evert. Q. So what is shown here, Agent Der-Yeghiayan? A. So this is the first page -- when you visit the website, this is the first thing that will appear. And it prompts you to enter in a user name and a pass phrase, which is a password, as well as you have to hit in down below it, which is a CAPTCHA, C-A-P-T-C-H-A. Q. The user name and pass phrase, do you have to have one to enter this site? A. Yes, you did. Q. And if you didn't have a user name and pass phrase, how could you get one? A. Down below there is the green lettering which says "Click here to join," and it would then take you to another page. Page 141 Q. Could anyone click here to join? Could anyone create an account on this site? A. Yes. It was public. Q. What information did you have to give about yourself in order to join? A. No information about yourself. Q. Did it matter what age you were? A. No. Q. Did it matter where you were from or what the laws were in your country? A. No. Q. Do you have to supply an email address of any kind to register your account? A. No, you do not. Q. What did you have to do exactly? A. It just asked you to create a user name and also just create a password, or pass phrase. Q. As long as it wasn't one that some other user had chosen before, was that it? A. If it was something that already existed, then it would ask you to create another user name, something different. Q. So once you had an account and entered your user name and password, what would show up? A. The homepage for Silk Road. Page 142 Q. Could you take a look at Government Exhibit 109, please. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It is a screenshot I took of the Silk Road. Q. Of the homepage specifically? A. Yes. Q. And what date did you take it on? A. This was taken September 27, 2012. MR. TURNER: The government offers Exhibit 109 into evidence. MR. DRATEL: The same objection, your Honor. THE COURT: All right. Government Exhibit 109 is received. *(Government's Exhibit 109 received in evidence)* MR. TURNER: Could you publish Government Exhibit 109, Mr. Evert. Could you zoom in on the central images on the screen. Q. OK. So what are we looking at? What are the pictures we see in the middle of the screen? A. So these are listings, various listings that were available on Silk Road. They will change from time to time. And it could be any listing within the entire website but these just all happen to be drug listings. Q. How do these listings compare to the listings that typically appeared on the Silk Road homepage? Page 143 A. This is pretty consistent with what you would see when you login. Q. Was it typically mostly drugs or some other product? A. It was mostly drugs. Q. So could you explain some of the specific offerings we see here, what they are, what type of drugs they reflect? A. So there is marijuana that is available. There is also another type of psychedelic, called 25I-NBOMe, and as well as heroin, one gram of it. You have speed, which is amphetamine. Also have black tar heroin, one gram of high quality cocaine, testosterone. You also have some more amphetamine. Q. What type of drug is testosterone? A. Steroid. As well as you have methylone, and then you have some marijuana as well as some ecstasy pills, and I'm not exactly sure what that is; it looks like a prescription drug. Q. Could you take a look at Government Exhibit 101, please. A. OK. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. This is a screenshot I took. Q. Of what? A. Of the Silk Road homepage. Q. On what date? Page 144 A. This is from April 2, 2012. MR. TURNER: The government offers Exhibit 101 into evidence, your Honor. MR. DRATEL: The same objection, your Honor. THE COURT: Received. *(Government's Exhibit 101 received in evidence)* MR. TURNER: Could you publish the exhibit, Mr. Evert. Q. OK. So this was an earlier version of the site to the one we just looked at, is that right? A. That is correct. Q. Could we zoom in on the "Shop by category" list on the left. OK. So what are we looking at here? What was on the "Shop by category" list? A. So this is the drugs category as well as subcategories for the different various drugs. MR. TURNER: Mr. Evert, could you actually zoom out and take a look at the whole category list. Q. Just to be clear, what was the predominant form of goods sold on the site as of this date? A. It was drugs. Q. And the numbers on the side of the categories, what do they reflect? A. Each one of the numbers in parentheses is a listing that is in that category. Page 145 Q. So what does it mean drugs, 2,020? 2,020 what? A. It means there is 2,020 individual listings for different drugs. Q. By "listings," what do you mean? Advertisements? Offerings? A. It's an offering, yes. Q. For each offering would there be only one item for sale or would there be more in quantity? A. Each listing could have, for example, ten pills for that one listing available or 100 pills or multiple grams up to a kilogram or more of a drug. Q. OK. And these numbers, did they change over time, the quantities of listings for the various drugs on sale on the site? A. Yes, they did. Q. And over the timeline of the site, how did they change? Did they increase? Decrease? A. They increased pretty regularly or steadily. Q. So, again, what was the date of this screenshot? A. This was April 2, 2012. Q. Could you take a look at Government Exhibit 132? MR. TURNER: Mr. Evert, could you put that on the side, please. Q. Do you recognize what has been marked as Government Exhibit 132? Page 146 A. Yes, I do. Q. How do you recognize it? A. It is another screenshot I took of the Silk Road homepage. Q. On what date? A. This is from October 1, 2013. MR. TURNER: The government offers Government Exhibit 132 into evidence. MR. DRATEL: The same objection, your Honor. THE COURT: Received. *(Government's Exhibit 132 received in evidence)* MR. TURNER: OK. So could you publish that, Mr. Evert, and zoom in on the category list. Q. So, again, what date did you take this screenshot on? A. This was October 1, 2013. Q. And how do the numbers compare to the prior shot that you took in, what was it, April 2012? A. That was April 2012. They substantially went higher in every category and as well as additional categories were added. Q. So in total there were 2,020 drug listings in April of 2012. By October how many? A. There is 13,810. Q. So if you clicked on one of the links in this category list what would then show up? A. If you clicked on the drug link, then it would take you into the drug listings. Page 147 Q. So could you take a look at Government Exhibit 110, please. Do you recognize this document? A. I do. Q. And how do you recognize it? A. This is a screenshot I took. Q. On what date? A. This is a screenshot of the Silk Road drug page from November -- sorry, September 27, 2012. MR. TURNER: The government offers Exhibit 110 into evidence. MR. DRATEL: The same objection, your Honor. THE COURT: Received. *(Government's Exhibit 110 received in evidence)* MR. TURNER: Publish it, Mr. Evert. Q. So what is depicted in this screenshot? A. This would be on the drugs category, specifically on the stimulants subcategory of drugs. MR. TURNER: And, Mr. Evert, could you zoom in on the first couple of listings, for example. Q. So the first one, it says ".5 grams high quality cocaine," and then by "seller" it says "Lloydsbrothers." Now, was that typical for a seller name? Did sellers typically put real names there or some other type of name? A. Generally it is just an obscure name. Q. What was that called? Page 148 A. It is a user name. Q. The user name of the vendor on that site selling that product? A. Yes. Q. And "ships from," what did that indicate? A. That would be where the seller would publicly advertise where they shipped their products from. Q. Roughly, how many different seller user names would you say you saw during the course of your investigation? Dozens? Hundreds? Thousands? A. Thousands. MR. DRATEL: Objection to the leading, your Honor. THE COURT: In general try not to lead, Mr. Turner. MR. TURNER: OK. Q. Roughly, how many different seller user names would you say you saw during the course of your investigation? A. A few thousand. Q. And in terms of "ships from" and the countries that the vendors would ship from, during your investigation, did you see offerings from many countries or just a few? A. I saw approximately over 40 countries. Q. So what would happen if you click on one of those individual listings in the category list there? A. If you would click on the actual individual list, it would bring up a more detailed description of the listing itself as well as just some terms basically of the purchase of it. Page 149 Q. Could you take a look at Government Exhibit 111, please. Do you recognize this document? A. Yes, I do. Q. And how do you recognize it? A. It was a screenshot that I witnessed being taken. Q. What is it a screenshot of? A. This is a screenshot of a listing that was used to buy a controlled purchase of drugs. Q. Does that mean like an undercover buy? A. Yes. Q. What date is this screenshot from? A. I believe it was -- there is no other date on there but it was around March 6, 2013. MR. TURNER: The government offers Government Exhibit 111 into evidence. MR. DRATEL: The same objection, your Honor. THE COURT: All right. Government Exhibit 111 is received. *(Government's Exhibit 111 received in evidence)* MR. TURNER: Mr. Evert, would you publish it. Q. OK. So what was it an offering for? A. This was for .5 grams of uncut crack cocaine. MR. TURNER: Could we zoom in on the product description all the way down to the bottom, please. Page 150 Q. OK. It says: "Description: Uncut crack cocaine. "Product will be send within 12 hours after order is placed. "It is possible to ship from Belgium (ask for info). "I destroy all your information after the order has been furnished. "Info: I am aware of the latest stealth packaging. "Using the best quality materials. My packaging is professional and up to date. "Working with bitcoins only. No payments outside of escrow. Shipping worldwide." Could we zoom out, please. And then could you zoom in on the top half of the page. So in the gray box there, again, could you just briefly summarize what information is displayed there? A. To the right of the image? Q. Yes. A. So it lists the seller's user name followed by their feedback rating. In this case, the name is happytimezz, with a feedback rating of 100. And it also details where that particular vendor would be shipping that product from. Their advertising they're shipping from the Netherlands. And they would also tell you where they would ship the products to. In this case this vendor is offering this product shipping worldwide. And then it is in the category, or subcategory, of crack. Page 151 Q. And then up above, it says, "Add to cart." And there is "1.65" next to a B with a line through it. Do you see that? A. I do. Q. What is that? What is the number? A. The symbol is a symbol for bitcoins. Q. So what does it reflect? 1.65, what is that for? A. It is a price for the items. It is 1.65 bitcoins. Q. So through your investigation did you become familiar with bitcoins? A. Yes, I did. Q. And at a general level, what are bitcoins? A. Bitcoins are a -- it is a virtual currency that is used that you could use to buy and sell things and trade things electronically on the Internet. Q. Was there any form of payment accepted on Silk Road besides bitcoins? A. No, there was not. Q. And what is the advantage of using bitcoins for a purchase? A. Bitcoins themselves are sort of like Tor. It anonymizes you. Bitcoins also have sort of the same properties where it would be something that also helps anonymize who you are. It doesn't really lead directly back to you. Q. So when you paid for items on Silk Road or when you pay for items with bitcoins generally, is there any identifying information attached to those bitcoins? Page 152 A. No, there is not. Q. How does that compare to like payment with a credit card, for example, when you shop on an ordinary website? A. With a credit card, if you are online and you are buying something, that usually requires that you enter information about yourself -- your name, your address, zip code -- and that information is usually checked against the credit card itself, too, and it verifies against it. Q. And to be clear, is there anything illegal in and of itself about using bitcoins? A. No, there is not. Q. Did you ever conduct -- you mentioned before you conducted undercover buys on Silk Road? A. Yes, I did. Q. Why did you do that? A. It was to match up the drugs that we were receiving in at Chicago O'Hare to try to match the envelopes that we were receiving to who we suspected were shipping those drugs. Q. And as part of those undercover buys did you learn how to acquire and use bitcoins? A. Yes, I did. Q. So how can you buy bitcoins? How can you acquire them? A. There is a number of ways. Generally, you have to buy it from a Bitcoin exchanger that will basically take your real money and exchange it for bitcoins. Page 153 Q. And where can you find an exchanger of bitcoins? A. You could find it -- it is available -- readily available online. So there is numerous exchanges you can go to online that will accept your money, real money, for bitcoins. Q. How does buying bitcoins compare to exchanging dollars for foreign currency, for example? A. It's similar in the essence that when you trade it, the actual exchanges themselves will make money on you just as a currency converter will make money on you with some commissions when you are transferring, say, dollars to Euro, dollars to pounds. Also, Bitcoin exchanges will also make commissions on you as well, so when you are buying bitcoins they will earn money off of that. Q. And what is the exchange rate for a Bitcoin? How much does it cost to buy a single Bitcoin? A. It fluctuates pretty rapidly, usually. Q. How much did the price of bitcoins change over the time period at issue in this case, 2011 to 2013? A. When I started my investigation, it was in October 2011. Bitcoins were roughly like 2 to $4 a bitcoin. And then by the end of -- well, throughout the investigation, even going into April 2013, bitcoins hit a value of $250 a bitcoin, and then by the time that we shut the site down in October 2013 it was about $100 -- a little bit over a $100 a bitcoin. Page 154 Q. Do you have a document on how you would buy bitcoins as part of your undercover buys? A. Yes, I do. Q. Could you take a look at Government Exhibit 113, please. There are a series of pages in this exhibit. Could you explain what they are? Do you recognize them? A. I do recognize it. It's -- this is -- I'm sorry. It is a purchase of bitcoins that we did, or that I did, and it's a series of screenshots that demonstrate the different websites we had to visit in order to purchase the bitcoins as well as screenshots I took of Silk Road. MR. TURNER: The government offers Government Exhibit 113 into evidence. MR. DRATEL: No objection, your Honor. THE COURT: All right. Government Exhibit 113 is received. *(Government's Exhibit 113 received in evidence)* MR. TURNER: Publish the first page of the exhibit, Mr. Evert. Q. So could you just walk us through slowly through each page of the exhibit and what it reflects, and you can just tell Mr. Evert what to zoom in on. A. You are actually right, so if you can zoom in there, that is perfect. Page 155 So we just zoomed in on this portion from -- this is an undercover Bank of America account that we established within HSI. Q. HSI is your agency? A. Yes. Q. Let me just be clear, the circles in these documents, where did these come from? A. I added these circles to the images. And so this is demonstrating the first initial wire transfers, that we have $7,000 in our bank account that we are transferring to it's an online bitcoin exchange that is called Mt. Gox at the time. Q. So Mt. Gox is the exchanger here? A. Yes. Q. OK. A. So this is showing on April 5th of 2013 we are making a wire transfer, and the information for the wire transfer is provided by Mt. Gox on their page to say to initiate a wire transfer, send it to this bank and to this routing number. And then also included in the transfer description, which is below, this is a unique -- this M03291196X is unique to our Mt. Gox profile that we had already established. Q. So you are transferring $7,000 of real currency to Mt. Gox? A. Yes. Q. Go to the next page. Page 156 A. So if you zoom up on the top part, this is the Mt. Gox page. So this is, again, an undercover account that we established. And what this reflects is after the wire transfer went through, it displayed that we had $6,989.34 in our account, that our fees that are assessed in the wire transfer, that we lost some money, but what it did is it credited our Mt. Gox account online with the money that we transferred. Q. Do you want to go to the next page. A. In the center here, now that we have our money that is in our account, we are going to try to purchase bitcoins using that money. And we want to use the entire balance that we have of cash to purchase bitcoins. And so the website -- the amount value in bitcoin fluctuated very rapidly, so we were trying to do the math very quickly to purchase the exact amount of bitcoins that would equal the amount in our balance. So this is showing us putting in a buyer request for bitcoins using that money. Q. All right. So you had $6,989 and you were trying to spend it all to buy as many bitcoins as you could? A. Yes. Q. Which is how many bitcoins? A. It came out to 27.4306907 bitcoins. Q. Then you clicked "buy bitcoins"? A. I'm sorry? Page 157 Q. Then you clicked "buy bitcoins"? A. Yes. As soon as you put in the information for how many you want to buy and at what value amount, then you click "buy bitcoins." Q. The next page, please. A. This is -- it reflects up in the right-hand corner now, after the order went through for our purchase, that we received 27.26610656 of bitcoins, and we also had a balance remaining in our account of $206.52 and some extra decimals that was reflected because the value of bitcoins changed in the middle of our order when we placed it. That is how fast it changed on us. Q. So now you have 27.26 bitcoins. What did you do next? A. After this then I logged into our Silk Road account. MR. TURNER: Next page, please. Could you go all the way over, Mr. Evert, to capture the user name. Thank you. Q. All right. So this is an undercover account you had on Silk Road? A. Yes. This is an account that I took over. Q. What was the user name of the account? A. The account was "dripsofacid." Q. Reflected over here? A. Yes. Q. Go ahead. A. So this is just showing beforehand, before we actually transferred our bitcoins, how much was in our account. Page 158 On the left-hand side I circled in red, and it shows that we had now -- I should explain this, too, is that Silk Road had the option to display to you various currencies. So it wouldn't just show in bitcoins. You could set it to show you in dollar amounts or show in Euro or show in various currencies. So this account when we took it over it was already set to display in U.S. currency. So up in the top it is showing that we had a-dollar-89 already in that account and that was in there once we took it over. Q. Next page, please. A. And so after clicking the account but in that, where I just showed you where the 1.89 was, it would take you to a page like this where I circled -- if I wanted to make a deposit of bitcoins, you would simply have to click on those green words, "Click here to make a deposit." Q. Next page, please. A. And then this page would come up after you click that, and down below I circled what it is telling me is once basically you are ready to send the bitcoins, send it to this bitcoin address. Q. We haven't heard this term before. Could you explain what a bitcoin address is? A. So a bitcoin address, which is up here on the screen, it is essentially like a bank account number. You can think of it that way, where it is a unique number that is what allows basically the bitcoin network to transfer bitcoins to and from. Page 159 Q. Is it an account at a bank? A. No, it is not an account in a bank. Q. What is it an account on? A. It is an account that exists so the bitcoin has it's called a block chain and it's what is its internal ledger that basically documents all transactions to and from. That is how it keeps track of basically who has what money where and what accounts and what money where. It is basically using these addresses, and they are all part of what's called, it is the block chain. Q. So let's just back up. Is bitcoin controlled by like a government? Is it a government-issued currency? A. No, it is not. Q. Is it controlled by a single company? Is there a bitcoin.inc that controls the whole thing? A. It's not one company. It is completely decentralized. Q. When you say "decentralized," what does that mean? A. That means that it is not owned by any government or one entity. Q. So the computers that run the bitcoin network, who are they owned by? A. It is public. It is something that you could download, and once you download the program you become a part of the network itself. And the block chain itself is contained within that program. Page 160 Q. So if you have a transfer of money from one bank to another, who keeps tracks of that information in the ordinary financial world? A. Generally the bank does. Q. So if you have money transferred from one bitcoin address to another, how is that information kept track of if there is no one central authority like a company or country? A. So the transactions are recorded within the network. It's recorded within that block chain, and since the block chain exists on every computer that runs that program, it constantly self-updates. So every transaction it will self-update the block chain on everyone's computer, basically. So the block chain is constantly updated with every transaction. Q. Is there a single block chain that is used throughout the network or are there multiple ones? A. It is a universal single block chain that everybody uses. Q. All right. So the screen says "Once you are ready send your bitcoins to this address." What did you do next? A. So from this page I copied that bitcoin address, and then I went back to my Mt. Gox page that I had to initiate a wire -- initiate a transfer. Q. Turn to the next page, please, Mr. Evert. Could you just walk the jury through this page? Page 161 A. So this is back on the Mt. Gox page. I then took that same address that Silk Road gave me to deposit the bitcoins. I entered it in to where it asked for a bitcoin address. And then I entered in the amount that I want to transfer, which is the entire balance that was in our account at the time. And we also clicked an option to pay a fee so we would have faster processing so it wouldn't remain there for -- the transaction would basically go quicker. And then once you entered that information, you click "confirm." And what it says is the transaction -- that's what's down below in the green -- it says "Transaction is underway" and it gives you a transaction ID number. Q. That transaction ID number, what is that an ID number for? A. The long string is a unique transaction ID number that is created and generated and it is also on the block chain as well. Q. OK. So you said before that every time you do a bitcoin transaction, remind me, what happens to the block chain? A. The block chain updates. Q. So could you turn to the neck page, please. What are we looking at here? A. So this is a public website. It is blockchain.info. This is one of several websites that you could use to actually search the block chain. It is a way that it basically visualizes what transactions actually are on there. So from block chain all you have to simply do is search the bitcoin address that you just -- you transfer any bitcoin address and it will tell you all the transactions in it. Page 162 MR. TURNER: I'm sorry. Mr. Evert, could you actually back out of there. Could you zoom up here, please? That's fine. Q. So this address right here, what is that address? A. That is the same address that Silk Road provided us. And this is an example of what would display normally on blockchain.info after you searched for a bitcoin address. Q. So you searched for that address -- back out, please -- and do you see your transaction from Mt. Gox reflected anywhere in the block chain here? A. Yes, I do. Q. Which one is it? A. It's -- so the second arrow from the top down, or the second arrow up in the middle there, that would be our transaction that we did that day. It is the same transaction ID number on the upper left. Q. There? A. Yes. It is same date that we initiated the transfer, which is April 10, 2013, as well as the same bitcoin amount that is 27.26 and some change bitcoins. Q. So where is the address that you sent the money to? A. It's where the arrow is pointing to. Blockchain.info will try to make it as user friendly as possible. So it will tell you from what account or accounts bitcoins were transferred to another account. In this instance it is showing that there are four accounts that actually made that transfer of 27 bitcoins to our Silk Road account. Page 163 Q. So there are four addresses on the side. Who did those addresses belong to? Who are they controlled by? A. Those are Mt. Gox's. Q. And this one was controlled by what? A. This would be Silk Road. Q. On the block chain itself, was there any -- is there any information that ties those addresses on the left to Mt. Gox? A. No, there is not. Q. Or this one to Silk Road? A. No, there is not. Q. Is there any information on the block chain itself that ties any of this money to you? A. No, there is not. Q. The next page, please. A. And so this is showing, after we initiated the transfer, the account history -- there is an account history page on Silk Road that will tell us that we in this case deposited bitcoins into the address that is provided, the bitcoin address, and it is reflecting that total of 27.27 bitcoins were credited. It also rounds up on that page; it doesn't show the entire balance. And then it shows the date, which is April 10th, 2013. And up above that I also circled -- it shows what the value is in your account at the time, which is $6,522. Page 164 Q. So by this point have all the bitcoins that you bought from Mt. Gox been transferred over to Silk Road? A. Yes. Q. Again, as part of that, has Silk Road received any identifying information about you? A. No, they have not. Q. Next page, please. A. And this is a screenshot, then, that we took of the item that we were going to try to purchase and we did purchase. It was a thousand pills of ecstasy that it was -- the cost of it, since we asked for it to display in dollars, was $5,499.99, and this was particularly coming from a vendor by the name of supertrips who was advertising that he shipped from Germany and shipped worldwide. Q. How did you initiate the purchase? A. So once you find a product within Silk Road, such as we did here, all we had to do was click on right next to the dollar amount, the "Add to cart." Q. And then what happened? MR. TURNER: Would you go to the next screen, Mr. Evert. A. And then after you hit "Add to cart," on the upper right-hand side there is a -- let me use my laser pointer -- there is a shopping-cart-like image, and it is now reflecting that we have one item in our shopping cart. And if you click on that it would take you to a page such as this that then would list the product that you added to your shopping cart, and we added in this instance the thousand pills of ecstasy. Page 165 It gives you options on how you want it shipped. There is different shipping. In this case there is free worldwide shipping offered by this vendor. The only thing that we had to do is down below enter in a name and address and then a PIN number and then click "Place order." Q. And the name that you provided, was that a real name? A. That was an undercover name. Q. Did users have to verify their name in any way in making Silk Road purchases? A. No, they did not. Q. All right. The next page, please. A. So this is a page that we took then after the transaction was complete, and it displays an order that we placed that has been verified. It assigned us a transaction ID number, which is that TX pound number, and it also gives you a status for your order, which in this case it is processing. And then up above you could see that our account now has been debited the amount of $5,499. Q. So after you placed the order, would the purchase money immediately be transferred to the seller? Page 166 A. No, it would not. Q. And why not? What would happen to it? A. Once an order was placed, it would go into an escrow account that Silk Road maintained. Q. What does "escrow" mean? A. Escrow is just -- it is basically a middleman between you and the vendor, and Silk Road would act as that, the middleman. Q. And what was the function of putting it into escrow? A. It was a way to help protect, I guess, the vendors and the buyers. So basically once that order was placed, the vendor would be notified that an order was placed and that would trigger them to ship the product, and once the actual buyer received it, then they would then tell Silk Road that they received the order and then they would release the funds basically to them. If they never got the item, then they could dispute it within Silk Road to get their money back. Q. And if you did get the product, what would you do to send the money to the vendor? A. It's called "finalizing" on the website, that you would click a button which says "Finalize." So you have the option of doing that almost right away. You could finalize an order and give the vendor the money right away if you really trusted them, or if there is an instance where the vendor might require it, that would be something that you had the option of doing at any time. Page 167 Q. Could you go to Government Exhibit 114, please. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It is a screenshot I took. Q. Of what? A. Actually, I'm sorry, it is a screenshot that I was present for, that I witnessed being taken. Q. And what is it a screenshot of? A. This is a screenshot of the order page -- orders that we placed during an undercover purchase of drugs. MR. TURNER: The government offers Government Exhibit 114 into evidence. MR. DRATEL: No objection. THE COURT: GX-114 is received. *(Government's Exhibit 114 received in evidence)* MR. TURNER: Could you pull the first three or four orders, Mr. Evert. Q. What does this page show? A. These were orders that we placed during one of our undercover buys, and this reflects multiple orders that we placed all at the same time. Q. This includes, for example, the uncut crack cocaine that we saw before? Page 168 A. Yes, it does. Q. OK. A. And this is -- so what it is showing us is each one is an individual transaction from a different vendor. And, for instance, the top one is -- we purchased one LSD blotter from a vendor by the name of fredthebaker, and the status of the order was in transit, which means that they had marked it as being shipped and mailed to us. And it was notifying us that that order went out and finalized within 17 days and that we had an option on the right-hand side to finalize or try to resolve an issue with the order. Q. Again, just to be clear, if the product comes, you click "Finalize"? A. That would then release the funds to the vendor. Q. And if you click "Resolve," what happens? A. The resolve option, once available, you could then go into almost like arbitration with the -- between Silk Road and the vendor, so basically you are going to try to resolve an issue that you have with the vendor. Q. Who were the arbitrators? A. That would be Silk Road. Q. Was there like customer support staff that would do that? A. There was customer support staff that was within Silk Road. Q. So if I am a buyer and I say that I don't get my drugs, what would the support staff do? Page 169 A. They would then do their own investigation into the transaction and review whatever history -- MR. DRATEL: I object, your Honor. THE COURT: Sustained. You need to build a foundation for that. MR. TURNER: Sure. MR. TURNER Q. Do you know what a customer support staff member would do in the event of a dispute? A. Yes, I do. Q. How do you know? A. I -- I was working as an administrator for a few months. I also kept routine, constant contact with other administrators that ran the customer support and would discuss those matters with them. Q. So based on that experience, what do you know that would happen in the event of a customer resolution dispute? A. They would look into the transaction itself. They would review private messages between the buyer and the vendor, and they would try to -- they would also do, similar to what we did, which is go onto blockchain, see if everything matches, and basically see if the transaction was -- actually did occur the way it did. And then they would also probably review previous history, as well, with the vendor. If there is a history with them maybe not shopping product, then they may, you know, side against them. If there is a history of the buyer constantly claiming they never got something, then they would probably side with the vendor. Page 170 Q. And how, if at all, would Silk Road make any money from these sales? A. Silk Road made a commission on every transaction. Q. How do you know that? A. Because it was publicly talked about by the people that -- the person that ran Silk Road as well as it was -- I tested it using a vendor account that I took over that I was able to create a listing and set a price for it, and once I looked at that same item then from a public standpoint, the value of that item went up to -- and it went up enough that matched what the advertised commission rates were. Q. So after a vendor would get paid, the payment would be in bitcoins, right? A. Yes. Q. What could the vendor do to then convert the bitcoins into real currency? A. The vendor then would have to find an exchanger, and in almost the reverse of purchasing bitcoins, would have to then exchange the bitcoins for real currency. Q. And where could they do that? A. The same exchange that we used, Mt. Gox, you could do that. There was various other exchangers that you could use, other companies similar to Mt. Gox. There is also options of selling the bitcoins. Even on the Silk Road site itself, you could sell them, exchange them for U.S. currency. You could exchange them for gold. You could exchange them for other things of item value. And you could even resell the bitcoins yourself on Silk Road as a vendor and exchange -- get cash in the mail. Page 171 Q. So did you prepare any sort of flow chart to boil down how this whole payment system works that we have been talking about for the past half hour? A. Yes, I did. Q. Could you take a look at Government Exhibit 113A. A. OK. Q. Do you recognize this document? A. Yes, I do. Q. What is it? A. It's an example of how a Silk Road payment would be conducted. Q. Would it aid your testimony in explaining these concepts to show this chart to the jury? A. Yes, it would. MR. TURNER: We would ask to show the demonstrative to the jury, your Honor. MR. DRATEL: No objection. THE COURT: All right. You can go ahead and do that. It is received as a demonstrative. Page 172 *(Government's Exhibit 113A received in evidence)* MR. TURNER: Mr. Evert, could you publish the exhibit. Q. Could you just walk us through step-by-step? A. Sure. So starting up on this up here on the left-hand side, this basically reflects, again, as you saw with our example, when we have money in our bank account and you want to purchase bitcoins, if you have real currency, then you would go to an exchanger and you would exchange your money for bitcoins. And then once you exchange it, you then transfer it to your buyer account on Silk Road. And then you place an order for whatever item that you wish to buy from the website. Once that order is placed, the bitcoins themselves are held in escrow by Silk Road. From that point, once the order is received and the buyer marks it as being finalized, he will then -- then Silk Road will get its commission rate, and then the vendor is paid their money so the bitcoins are released to the vendor. From the vendor, then if they want to now get their money or transfer their bitcoins and make it into money, they would do something similar where they would then go to an exchanger and they would receive their cash. *(Continued on next page)* Page 173 MR. TURNER: Your Honor, I have another transition point if the Court wants to take a break. THE COURT: Let's go ahead and take a mid-morning break. Ladies and gentlemen, let me give you a sense as to how the schedule will work this morning so you'll predict when your breaks are. We'll take a break now for about seven- to eight minutes, how ever long it takes you folks to get yourselves -- stretch your legs and then get back in order to come back into the room. Then we're going to take lunch today and every day from 12:45 until 2:00, about an hour and 15 minutes for lunch. So we won't take a break unless somebody needs to after this one this morning until we take our lunch break. Obviously, if you need to take a break at any time, make eye contact with me or Joe and we'll take an extra break if we need to. That's the schedule. Let's take a short break now. I want to remind you not to speak to each other or anybody else about anything having to do with this case. Thank you. *(Jury excused)* *(Continued on next page)* Page 174 *(In open court; jury not present)* THE COURT: Let's all be seated. I have one matter I want to raise. I want to note that for the evidentiary objections, most of the -- all of them have so far been dealt with in my motion in limine ruling and I just wanted to make sure that I had connected what the receipt of those materials connects to. There's an exception, which is Government Exhibit 108 had not been objected to as part of the pretrial process, nevertheless, as I had indicated pretrial, if there are things which arise which change what you might not have thought was an objectionable document and it becomes an objectionable document, then I'm nonetheless willing to entertain that, but in general, I'll be following the objections lodged on the pretrial order and if it becomes important to do so or appropriate to do so, I'll be questions why there's been a change. Sometimes it's just an oversight because there's a long list of similar documents and 108 was of that type. That is what I had wanted to put on the record. Let me just state I think that, so that's it's clear, that the listings that are coming on were referred to by the government as listings that indicated particular narcotics, etc., not as simply text on a page which had the word for those narcotics and therefore, they fall under the coconspirator exception of the hearsay rule and that's the basis for allowing them in for the truth. They're obviously directly relevant to the government's charges in this case: So that connects up to the in limine ruling which went through the rationale and case law in some more depth. Page 175 Is there anything that you folks would like to put on the record at this time or otherwise raise? MR. TURNER: No. Thank you. MR. DRATEL: No, your Honor. Thank you. THE COURT: Let's take our own brief break. Thank you. THE DEPUTY CLERK: All rise. *(Recess)* *(Continued on next page)* Page 176 *(In open court; jury present)* THE COURT: Let's be seated. Mr. Turner, you may proceed, sir. MR. TURNER: Thank you. Q. So Mr. Der-Yeghiayan, you mentioned before you did some undercover buys on Silk Road? A. Yes, I did. Q. Approximately how many did you do? A. Over 50. Q. Did you focus on vendors selling from outside the United States or inside the United States? A. Mostly outside the United States. Q. Why was that? A. Being that we were working at the international mail hub and we were receiving in so many international shipments, that's what we were focused on. Q. Can you take a look at what's been marked as Government Exhibit 103A. Do you recognize the pages in this document? Tell me when you're there. A. 103A? Yes. Q. How do you recognize them? A. As a screen shot that I took and as well as photographs that I was -- I witnessed. Q. And what are they screen shots and photographs concerning? A. Screen shot of a purchase of drugs that we did, undercover purchase from Silk Road and also the drug that we received. Page 177 MR. TURNER: Your Honor, the government offers Government Exhibit 103A into evidence. MR. DRATEL: Just the previous objection. THE COURT: All right. Government Exhibit 103A is received. *(Government's Exhibit 103A received in evidence)* Q. Could you walk us through what these pages reflect. A. So this is a screen shot from Silk Road of an item that we purchased, that I purchased that was from a seller that was from the Netherlands. The seller went by the name of uglydoll, and we were purchasing brown heroin, and it's .2 grams. Q. Next page. A. This is a photograph of an envelope that I retrieved from our undercover P.O. box that was addressed as we -- same name, same address that we put in our order. And I also know this came from the Netherlands, that's in the next photograph, based upon the stamp that's on there, and that it's also -- there was a stamp over it that shows it came from the Netherlands. The next page. Q. What did you find inside? A. So inside of it, once we opened up the envelope, there was a blue piece of paper that was in there that was taped together. So the next photograph shows us after we cut into the blue piece of paper, and behind that or inside of it, I should say, was a vacuum-sealed clear plastic bag that also contained multiple other plastic bags that had a brown powder substance that later tested positive for heroin. Page 178 Q. Go on to Government Exhibit 103B. Do you recognize these pages? A. Yes, I do. Q. What are they? A. It's a screen shot that I witnessed for a control buy and then also photographs that I witnessed when we seized some drugs. MR. TURNER: The government offers Government Exhibit 103B into evidence. MR. DRATEL: Same objection. Can we just get a date on this? MR. TURNER: Sure. Q. Do we have a time frame for these photos? A. The screen shot was taken March 6, 2013 and then the photographs were taken on March 19, 2013. THE COURT: All right. Government Exhibit 103B as in boy is received. *(Government's Exhibit 103B received in evidence)* Q. Is this the same crack cocaine that we saw earlier? A. This is the same. Q. Did you try to purchase the product? A. Yes, we did. Page 179 Q. What happened? A. So, this order was placed. And then shortly thereafter, it was about two weeks later, we received this envelope in the mail and it came from Germany, so those are German stamps on the outside. The vendor himself advertised actually that they would ship from the Netherlands, but what we found inside was the addressee -- I'm sorry, two screen shots, the next one -- the addressee had a German address and they're a German company. It says company Indoor Play. Q. Is this the return address? A. This is the return address on the package on the outside. But if you turn to the next page, this is also found inside the envelope that showed that the item was mailed through Postnl, which is for the Netherlands mail system. Q. They used a German stamp and mailed it through the Netherlands mail system? A. Yes. And it was addressed to our undercover name and our undercover P.O. box. Q. Next page, please. A. So this is the reverse side of the envelope showing you the envelope and then the next photograph shows you just sort of size, we put a pen there that wasn't with the package, as well as what was inside of it, which was -- showed several sheets of paper. And the next shot shows us, when you open the piece of paper, there was a piece of black foil that was in there that appeared to have items inside of it. Page 180 Q. Was this sealed in any way? A. It was vacuum-sealed. And the next photograph, once you cut open into this black vacuum-sealed foil, it had a clear plastic baggie, which contained a white, crystal-like substance that later on tested, and that's the next photograph, field-tested positive for cocaine using the reagent test kit. Q. So how many undercover purchases in total, again, like this did you make? A. Over 50. Q. And how many different dealers did you order from? A. At least over 40. Q. And how many different countries were they from? A. From approximately about ten or so. Q. And how many of the orders resulted in shipments being sent to the address you supplied? A. Nearly all of them. Q. How many contained what appeared to be drugs? A. Nearly all of them. Q. Did you send what you received to the lab for testing? A. Yes, we did. Q. And how many tested positive for the drug they were supposed to be? A. Nearly all with I think an exception of one or two. Page 181 Q. Could you turn to Government Exhibit 801, please. A. 108? Q. 801. MR. TURNER: Your Honor, actually, this is just a stipulation. THE WITNESS: A. I don't -- MR. TURNER: I'd like to read in a stipulation between the parties marked as Government Exhibit 801A. It concerns another Exhibit 801. THE COURT: Let me just explain to the ladies and gentlemen of the jury what a stipulation is. A stipulation is an agreement reached between the government and the defendant and his counsel regarding certain facts and you can accept those facts as stated in the stipulation as true. You may proceed, Mr. Turner. MR. TURNER: Can you publish Government Exhibit 801A, Mr. Evert. It is hereby stipulated and agreed by and between -- a little bigger so I can read it, thank you -- by and between the United States of America, by Preet Bharara, United States attorney for the Southern District of New York, Serrin Turner and Timothy Howard, Assistant United States Attorneys, of counsel, and Ross Ulbricht, by and through his counsel, Joshua Dratel, Esq., as follows: Page 182 If called to testify, Heather M. Miller, a senior forensic chemist with the Drug Enforcement Administration, would testify that: 1. Government Exhibit 801 is a summary chart reflecting 52 substances that were submitted for laboratory testing to the DEA North Central Laboratory in Chicago, Illinois by Homeland Security Investigations Special Agent Jared Der-Yeghiayan. *(a) The column labeled "Seizure Number" indicates the seizure number associated with the substance.* Mr. Evert, can you put up Government Exhibit 801 underneath here. Zoom in in the first few lines. *(b) The column labeled "Seizure Number" indicates the seizure number associated with the substance.* *(c) The column labeled "Date Analyzed" indicates the date the substance was laboratory tested.* *(d) The column labeled "Net Weight" indicates the weight of the substance submitted for testing, after removal of any packaging.* And to the next page. You can zoom in past paragraph two there. That's fine. *(e) The column labeled "Drug Detected" indicates any illegal drugs the substance was found to contain through testing a sample of the substance, using reliable laboratory procedures.* Page 183 *(f) The columns labeled "Purchase Date" and "Vendor" reflect information provided by Special Agent Der-Yeghiayan concerning the date when each substance was purchased from the Silk Road website and the vendor from whom the purchase was made.* 2. As reflected in Government Exhibit 801, all but one of the 52 substances tested positive for illegal drugs. So taking a look at Government Exhibit 801, can you confirm that in the second and third columns "purchase date" and "vendor" accurately reflect the dates of your purchases and the vendors you purchased them from? A. They do. MR. TURNER: So the government moves 801 and 801A into evidence, your Honor. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibits 801 and 801A received in evidence)* Q. Now, besides illegal drugs, were there any other illegal goods sold on the Silk Road website as well? A. Yes, there was. Q. And in particular, do you know whether fake IDs were offered for sale on Silk Road? A. Yes, they were. Q. And where were those offers found? Page 184 A. There was a forgeries category on Silk Road. Q. Can you take a look at what's been marked as Government Exhibit 116A, please. A. Okay. Q. Do you recognize this exhibit? A. Yes, I do. Q. How do you recognize it? A. It is a screen shot that I took from the forgery section of Silk Road on August 4, 2012. MR. TURNER: The government offers Exhibit 116A into evidence. MR. DRATEL: The same objection. THE COURT: Government Exhibit 116A is received. *(Government's Exhibit 116A received in evidence)* Q. So you said this was from a forgery section of the website. Where is that located on this page? A. In the upper left-hand corner under the categories list, it reflects that there's a forgery section which included fake IDs and passports. Q. And could you just walk us through what's reflected on the right-hand side, what sort of offerings are there? MR. TURNER: Can you zoom in a little bit, Mr. Evert. A. I can read off here, too. There's the, like, the top listing is for a UK driver's license, which also advertises that there's holograms on it and it's scannable, as well as forged prescription labels that can be customized, as well as it says 100-percent tested working, printable coupon collection, and then an official UK passport, as well as UK driver's license photo card and that comes with, it says, it advertises with a UV as well as hologram and a Polish national ID card. Page 185 Q. How common was it for you to see listings like this for fake IDs, passports? MR. DRATEL: Objection. THE COURT: Why don't you restate. MR. TURNER: Sure. Q. Was this the only time you saw offerings like this on the website or not? A. No. From the beginning of my investigation until the end, there was a forgery section. Q. Did you come across -- did you ever come across any offerings relating to computer hacking on Silk Road? A. Yes, I did. Q. Where on the website would you see those? A. Under various categories. There's a digital section as well as, like, other, like, computer equipment type of sections. Q. Anything else in the other sections that it would appear in? A. If I had -- let's see here. I think it was digital goods and electronics. Page 186 Q. Could you take a look at what's been marked as Government Exhibit 116B. Do you recognize this exhibit? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took from Silk Road of a hacking tools listing. MR. TURNER: The government offers Government Exhibit 116B into evidence. MR. DRATEL: The same objection. THE COURT: Government Exhibit 116B is received. *(Government's Exhibit 116B received in evidence)* MR. TURNER: Can you zoom in up at the top, Mr. Evert. Q. Okay. So, it says huge hacking pack, 150 plus hacking tools and programs. MR. TURNER: Then, Mr. Evert, can you scroll down. That's fine. Q. The description is huge 3GB plus action pack, it's probably the best deal on Silk Road to date, no, this is not a pack full of outdated, ineffective programs, all software files have been updated in the past two months and are guaranteed to work. I'll read a few of them account creator, admin page finder, aircracking for Windows, anonymous high orbit canon. Can you go all the way down. This pack includes almost every hacking-related tool available from white-hat (clean code) to black-hat (SpyEye, ZeuS, etc.) I will continuously be compiling and updating this pack. I will also be raising the price of this pack to $50 in the next month. Page 187 To the only person that gave something other than 5/5. 1/5 got virus in it. Are you serious? You purchased a hacking pack loaded with keyloggers, RATS, banking Trojans and other various malware. If that doesn't set off AV, I don't know what will. If you're still unsure of the programs, run in a VM or Sandboxed. Please don't purchase my listings if you lack common sense. If you have any questions, feel free to send a message. sniffsniff. Do you know, by the way, what malware means? A. Yes, I do. Q. What does it mean? A. It's a program that it's, like, a virus basically that will be placed on a computer. Q. What does AV mean in this context? Do you have any idea? A. I don't know -- or antivirus, I guess, actually. Sorry. MR. DRATEL: Objection. Well -- THE COURT: Hold on. Is it withdrawn? MR. DRATEL: Yes. THE COURT: All right. Thank you. You may proceed. Page 188 A. Sorry. Antivirus. A lot of acronyms. Q. So you said -- we covered all transactions on Silk Road had to be paid for in bitcoins. And I think you mentioned earlier that -- well, I'll just ask you, was there anywhere on Silk Road that you could go to in order to exchange bitcoins for cash or currency? A. Yes, there was. Q. And where were those exchange services offered on the site? A. There was a money section on Silk Road. Q. So, take a look at what's been marked as Government Exhibit 116C, please. Do you recognize this exhibit? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took of the money section, money category of Silk Road. Q. Time period do you have? A. It's from August 4, 2012. MR. TURNER: The government offers Government Exhibit 116C into evidence. MR. DRATEL: Same objection, your Honor. THE COURT: Government Exhibit 116C is received. *(Government's Exhibit 116C received in evidence)* Q. Can you show us where the money categories is reflected here? A. Again, on the upper left-hand side of the category, it shows that there's money, as well as subcategories within the money section of bullion, digital currencies and loans. Page 189 MR. TURNER: And can you zoom in, Mr. Evert, on the first two. Q. So did you look at the descriptions of offerings like these? A. Yes, I did. Q. And what sort of offerings -- what sort of things did they offer? A. Well, for instance, this top listing here it says 20-dollar bill and that's -- essentially they'll -- you're buying a 20-dollar bill of bitcoins, so basically you're exchanging out your bitcoins for 20-dollar bills being mailed to you and the other -- Q. To be clear, was it one 20-dollar bill being offered or could you just order as many as you like? A. You can order as many as you like, but the price set was 2.35 bitcoins per 20-dollar bill, so you can buy multiple. There's an option to put multiple numbers when you're buying your listing depending on how many is available, of course. Q. And the next listings says "I will buy your extra bitcoins." To be clear, what's on the side there, what kind of coins? A. The image is really hard to see here. Q. Are they actual bitcoins? Page 190 A. No, they're not. Q. Bitcoins are purely digital, right? A. Yes. Q. So it says "I will buy your extra bitcoins." What did offerings like that offer? A. So this is a vendor that's offering to purchase bitcoins. So if there's any extra bitcoins remaining in someone's account after they boxed something and they don't want them anymore or they don't -- they can't use it to buy something else, then they could go to a vendor like this on Silk Road and basically transfer their bitcoins and they'd give them something of equivalent cash or something through the mail. Q. So if you're a drug dealer on Silk Road, what did offerings like this allow you to do? A. So something like this would allow you to basically liquidate or launder your own proceeds that you were making as a vendor on Silk Road. MR. DRATEL: Objection. THE COURT: Sustained. Q. Without using legal characterizations, what did offerings like this allow a drug dealer on the site to do? MR. DRATEL: Objection. THE COURT: Sustained. You can approach it differently, but you can't approach it that way. Page 191 MR. TURNER: Okay. Q. If you're a vendor on the site and you have a lot of bitcoins from your activity on the site, what did these offerings allow you to do with those bitcoins? MR. DRATEL: I still object. THE COURT: I'll allow this. A. So, as a vendor on the site, a listing like this would be utilized to, if you earned bitcoin proceeds, to -- which every transaction is bitcoins, so all the money you're receiving for your drugs, you could then, instead of taking it offline off Silk Road and moving it to an exchange, you could just simply find a vendor like this on Silk Road and give them your bitcoins and they would then give you cash. You never really have to take your money off the website. THE COURT: Let me just ask you whether or not you ever exchanged bitcoins for cash using Silk Road? THE WITNESS: I never used it, but my other -- there are people that we -- accounts we took over that were doing that. THE COURT: So in the course of performing your duties and responsibilities, you became familiar with the exchange of bitcoins for cash through Silk Road? THE WITNESS: Yes. THE COURT: You may proceed. Q. Just to elaborate on that a little more, you took over an account that was engaged in this sort of activity? Page 192 A. Took over several accounts that were doing this. Q. And did you review the private -- did you review the activity reflected in that account after taking it over? A. Yes, we fully recorded the account. Q. And how could you tell they were engaged in this sort of activity? A. So, a few of the vendors that we took over, they had either direct listings that they would do things such as this or they would be buying from other vendors that were offering to purchase bitcoins, and we could see the transactions occur directly right on the site through their history as well as through their -- there's, like, private messages that they have. Q. Let's talk about those private messages. Besides enabling users to purchase items on the site, did Silk Road have any features that allowed users to communicate with one another? A. Yes, there was. Q. And what was that system called? A. It was called the private message system. Q. And how did it work? A. It was a internal messaging, sort of similar to, like, emailing or sending messages between users. Q. Can you take a look at what's been marked as Government Exhibit 117A. Page 193 A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took of an account that I took over on Silk Road. Q. What part of the account? A. This is the overview of and the in box of that user's messaging -- the messaging system. MR. TURNER: The government offers Government Exhibit 117A into evidence. MR. DRATEL: No objection. THE COURT: Government Exhibit 117A is received. *(Government's Exhibit 117A received in evidence)* Q. Actually, let me clarify. You talked about taking over account it, right? A. Yes. Q. And among the accounts you took over were vendor accounts? A. Yes. Q. And what did you do with those vendor accounts that you took over? A. When we took over the vendor accounts, we'd fully document them, so we'd go through all of the different available options and all of the information, the history that was on the account. Sometimes we'd leave it up for a day or two, but we wouldn't actually -- after that, we would then shut it down. Page 194 Q. You never used the accounts actually to sell drugs in an undercover capacity? A. No, we did not. Q. All right. Could you explain what is reflected in Government Exhibit 117A. MR. TURNER: Mr. Evert, can you zoom in a little bit and include the in box on the side there. Thank you. A. So on the left-hand side, it's bold, sort of hard to see. The in box, it just reflects that we're in an in box right now. There was also a section for unread messages and those are usually highlighted bold as well on your in box. And then there was a sent section, as well as a bulk reply section. So if you want to reply to multiple users at the same time, you could reply to multiple users. Q. And if you clicked on one of the messages, what would show up? A. On this instance, if you click on the message, the message that was sent from that user would appear. Q. Take a look at Government Exhibit 117B. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. As a screen shot that I took, again, in the same account that I took over from May 17, 2013. Page 195 MR. TURNER: The government offers Government Exhibit 117B into evidence. MR. DRATEL: The same objection. THE COURT: Government Exhibit 117B is received. *(Government's Exhibit 117B received in evidence)* Q. What's reflected here? A. This is logged in as that same user that was on the previous. Q. To be clear, where is that username located? A. On the upper right-hand corner it says hi and then the username in bold. This is -- once clicked into one of the messages, this one in particular on the upper left-hand corner it says from the user SuperTrips, so this is a dialogue between that user account and SuperTrips. And basically, there's a dialogue box that you can enter your message and then there's a history of messages below it. And the history is basically from the most recent received which is at the top down to the oldest message at the bottom. Q. It's like an email chain basically? A. It's like an email chain; yes. MR. TURNER: Can you zoom out. Q. And if you want to reply to the email chain, what do you do? A. In the dialogue box up above, you would just simply enter a message and then click the button go. Page 196 Q. In what other ways did Silk Road use to communicate with one another? A. There was also the forum that were available from Silk Road. Q. And what do you mean by forums? A. So there was a totally separate website that was a forum, an online forum where you could post messages and threads and you could discuss anything basically with other users. Q. What do you mean by threads? Can you just explain to the jury what that concept is. A. So basically, as a user on an online forum, you could sign up to become a user. And if you ever wanted to post a message to everybody, it's called a thread. So you basically start a dialogue box with the entire community and so you create a thread. You can say whatever you want and then any user could reply to that thread in what's referred to usually as posts. So posts would follow in a thread. Q. So your public conversation? A. Yes. Q. How would you get to these forums? A. The forums, there was a link on the marketplace to get to it at the bottom. Q. So when you say marketplace, what do you mean? A. Silk Road itself generally referred to as marketplace and then the Silk Road forums were referred to as Silk Road forums. Page 197 Q. The marketplace -- let's take a look back at Government Exhibit 132. Is this the marketplace? A. This is the marketplace. Q. Why don't you just -- up in the top left corner there's a green camel sort of logo. Was that affiliated with Silk Road? A. Yes, it was. Q. Was it on every page of their website? A. Yes, it was. Q. And where is the link to the community forums, the discussion forums? A. Bottom right-hand corner that says community forums and that would be a link to take you to the forums, which were also another hidden service on Tor. It's another dot-onion URL. Q. Can you take a look at what's been marked as Government Exhibit 118, please. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took of the Silk Road forums. Q. What date? A. From December 27, 2012. MR. TURNER: The government offers Government Exhibit 118 into evidence, your Honor. Page 198 MR. DRATEL: The same objection, your Honor. THE COURT: Government Exhibit 118 is received. *(Government's Exhibit 118 received in evidence)* Q. So what's reflected here? A. So this is -- these are the forums and each one of those yellow lists or yellow categories is a separate subforum. So the first one is Silk Road discussion and there are subforums on security, subforums on shipping, drug safety and so on. And these -- each one of those subforums would contain the threads that users wanted to post in that -- in those particular arenas. Q. And was membership on the forums included when you signed up for an account on the Silk Road marketplace or did you have to create a separate account on the forums? A. The forums themselves weren't connected to the marketplace by username. You would have to create another username and password to access the forums. Q. And did you yourself have any accounts in the forums during your investigation? A. Yes, I did. Q. Did you familiarize yourself with the sort of postings that appeared there? A. Yes, I did. Q. So just explain a little more. What sort of things would people post about in these various categories? Page 199 A. So, for instance, like, the Silk Road discussion forum would have general discussions about the Silk Road, anything that had to do with the market for the most part, any type of gossip that revolved around the market, there would be pretty much an overview type of discussion, or anything that was really popular, that's where you'd generally find a lot of the dialogue, in that forum. And the security subforum, you'd find topics or as it says in there about Tor, about bitcoins, about trying to keep your computer secure in the sense of trying to still remain anonymous while operating online. There's also a shipping category where you'd find a lot of different threads talking about how to ship things safely to your house or how to not be detected, different ways to conceal packages, different ways to avoid Customs, different ways to avoid law enforcement, what to do if law enforcement does deliver something to you and how to react. And then there was also a drug safety forum where they try to discuss how to use drugs safely and how to -- just different affects of different types of drugs. As well as a philosophy section, and it's economics and law where there was a lot of different philosophical discussions, all based around different things. And then an off-topic section where there were a lot of posts about -- and threads about pretty much anything. Anything pretty much was okay there. Page 200 MR. TURNER: Can you scroll down, please. THE COURT: Can you date when this screen shot was taken? THE WITNESS: Yes, your Honor. It was December 27, 2012. THE COURT: All right. Where do you get that information from? THE WITNESS: It's from the meta data that's on the next page on the right-hand side, so the picture properties. THE COURT: All right. Thank you. Q. Just briefly, let's take product offers in the middle, what was posted there? A. In product offers, the vendors from Silk Road, a lot of them had accounts on here on the forums that would post different products that they would either have for sale, they'd write up their own reviews, they'd discuss them on there, they liked to have threads that are up there for people to ask questions about. Q. Can you take a look at Government Exhibit 118A. Do you recognize this document? A. This is another screen shot I took of the forums. This is inside the product offers subcategory or subforum taken December 27, 2012. MR. TURNER: The government offers Government Exhibit 118A into evidence. Page 201 MR. DRATEL: Same objection, your Honor. THE COURT: All right. Government Exhibit 118A is received. *(Government's Exhibit 118A received in evidence)* Q. Briefly, could you explain how the structure of the forums worked here. Where are we in the forums? MR. TURNER: Go ahead, Mr. Evert. A. This would be after clicking into one of the subforums. If we clicked on the product offer forum, it would take us to a page that would look like this that then would display the most recent threads from top to bottom. And so, if a user would post a message on any particular thread, that thread would automatically go to the top of the page. There were threads that were referred to as being sticky, which then were stuck to the top and in this instance, that was reflected in the yellow color. So that first thread that's up on there, it says "to list offers in product offered section of forums," that was a sticky thread by one of the moderators of the forum; and then there was also -- then all of the threads underneath it were ones that were the most recent threads. Q. So then you click on a thread, then what happens? A. You click on a thread and it opens up and there would be the first initial post of the thread. And you can read through and if there's multiple pages, it would be indicated sort of -- on this page, too, you can see "1, 2, 3...14," that means there's 14 pages of posts in that particular thread. Page 202 MR. TURNER: Let's look at Government Exhibit 118B, please. THE COURT: Before we leave Government Exhibit 118A, did you yourself click on some of these threads. THE WITNESS: Yes, I did. THE COURT: And they performed as you stated? THE WITNESS: Yes, I did. THE COURT: And if you turn back to Government Exhibit -- I'm sorry. That was Government Exhibit 118A. If you turn back to Government Exhibit 118, did you, in fact, determine whether or not the content of any of these topical references, in fact, contained words that were consistent with that content? THE WITNESS: Yes, I did, your Honor. THE COURT: All right. Thank you. Now, you can proceed, Mr. Turner. Q. Along those lines, how many hours would you say you spent on the Silk Road forums? A. Probably thousands. Q. Can you take a look at Government Exhibit 118B, please. Do you recognize this document? A. Yes, I do. Page 203 Q. How do you recognize it? A. It is a screen shot that I took of a thread that was in the rumor mill section of the forum. MR. TURNER: We offer Government Exhibit 118B into evidence. MR. DRATEL: Objection also, your Honor, with respect to the date. THE COURT: Yes. Let's hold on 118B. Can you come back to that, Mr. Turner, or we can take a side bar if it's going to be difficult for you to do that. MR. TURNER: Sure. *(Continued on next page)* Page 204 *(At the side bar)* THE COURT: For a number of the most recent exhibits, which I was going to take up at the break there actually haven't been objection that had been noted on the pretrial order. So you've been saying objection, same objection, but, for instance, for 116A, for 116B, for 117A and for 117B there hadn't been objections on the pretrial order. MR. DRATEL: Right. THE COURT: So we can talk about if you have a new objection. MR. DRATEL: I didn't want to -- THE COURT: -- at a break. MR. DRATEL: That's fine. THE COURT: Now, which brings me to 118B, which hadn't been part of what I had reviewed as part of the pretrial order. So I had not had an opportunity to go over this particular document yet or to discuss what the issues might be. It's a little bit different from some of the others because from my very quick glance, it appears to have additional discussion, so I need to evaluate whether or not there are any hearsay issues or each if there's a hearsay objection. MR. TURNER: To be clear, we're not offering any of it for the truth. All we're doing is providing a tour of the website so the jury understands what we're going to be talking about later when we talk about forum posts of the Dread Pirate Roberts. So we would be fine with your Honor instructing the jury that this has not been offered for the truth. Page 205 THE COURT: All right. Mr. Dratel, tell me the nature of your objection so we have it on the record. MR. DRATEL: One is what your Honor recognizes, that is, we don't know whether any of these people are coconspirators who are posting in it, so there's a hearsay objection. The other is the date is markedly different on this one. This one is actually from 2015 on meta data. MR. TURNER: Maybe because it was transferred to different drive. We can get it from the original and correct it. MR. DRATEL: Or if he just testifies to that. MR. TURNER: Sure. MR. DRATEL: If it's the same time as the December 12, you know, that's fine, just so that it's -- MR. TURNER: It may be different -- this is one of the ones we updated. MR. DRATEL: Okay. MR. HOWARD: I'm sorry if you didn't get that copy. MR. DRATEL: I'm working off a disk. THE COURT: Hold on. Is the only remaining objection a hearsay objection? MR. DRATEL: Yes, that's correct. Page 206 THE COURT: Okay. So having reviewed this, I can, I believe, properly instruct the jury this is not offered for the truth. And I'll instruct the jury they're not the take it for whether or not so and so, in fact, tested a particular product or, in fact, received the particular product, just for the fact people are saying these things. MR. DRATEL: What appears on the site. THE COURT: Let's go back. Thank you. *(Continued on next page)* Page 207 *(In open court)* THE COURT: I apologize for that interruption. I try to do side bars as infrequently as possible with counsel because I do understand it takes time. Here I wanted to work out just where things stood with respect to a particular document. So, the government has offered Government Exhibit 118B. I'm going to receive that document into evidence. I'm going to give you a particular instruction on this. On this document, you'll see there are a bunch of words about people saying a variety of things: I have only tested X, Y or Z. This document is not being offered for the truth as to whether or not any particular person, in fact, tested or did any of the things that they're saying; it's for the fact that somebody wrote the words onto the page. So it's to give you a sense of what's on the forum. Whether or not these people did what they're saying they did is not the purpose of the document. So it's received for that purpose only. You may proceed, Mr. Turner. MR. TURNER: Thank you. *(Government's Exhibit 118B received in evidence)* MR. TURNER: We would move the exhibit into evidence. THE COURT: Yes. It's received in the manner that I suggested. Page 208 MR. TURNER: Thank you. Can you publish, Mr. Evert. Can you zoom into the first post with the category included, actually. That's good. Thank you. Q. So, is this an example of how a post would appear on the forum? A. Yes, it is. Q. And where does the thread -- the discussion thread start? A. It starts at the top, so there's the very first post is the beginning of the new thread. Q. And what section of the forum are we in here? A. Right now, it's in the rumor mill subforum. Q. So the subject of this post is what? A. It's "MDMA quality, from sellers on SR, please post reviews." Q. And who is the author of the post? A. It's on the left-hand side, it's a user -- by the username of kuddo, K-U-D-D-O. Q. And under that it says newbie. What does that mean? A. It was a ranking system that was built into Silk Road and the forum software. Q. And then over here under the subject, there's a date and time. What does that reflect? A. So this shows that that thread was created on July 17, 2011 at 2:52 p.m. and that was usually consistent with UTC time. Page 209 Q. Besides enabling users to post public messages to one another, did the discussion forums allow users to communicate in any other fashion? A. Yes, it did. Q. How so? A. There were also on the option besides posting public threads like this and having a discussion, that you could send private messages between one user and another. Q. Let's take a look at an example of that. Could you take a look at Government Exhibit 118C, please. A. Okay. Q. Do you recognize this document? A. Yes. It's a screen shot that I took from Silk Road forums of an account that I operated that was from the private messaging to private message overview. It was taken on August 20, 2013. MR. TURNER: The government moves Exhibit 118C into evidence for the same purpose, your Honor. MR. DRATEL: With the same limiting instruction. THE COURT: Ladies and gentlemen, the Court is going to receive Government Exhibit 118C. Similar to the document that you just saw in 118B, the words are not being offered for the truth of whether or not these people, in fact, did whatever it is they're talking about on 118C, just for the fact that somebody is posting those words. Page 210 All right. You may proceed, Mr. Turner. MR. TURNER: Can you post the exhibit, Mr. Evert. Q. Okay. Can you zoom into the top left. What does this reflect? A. This reflects being logged in, I was logged in under the username cirrus, and it shows a different -- the different features that are available to me. Q. And it says "my messages" here? A. Yes. MR. TURNER: Can you back out please, take a look at the in box, top half. Q. Briefly, what does this reflect? A. We're currently looking at the in box for my private messages and those are the individual -- each one of them is an individual message, if you will. Q. And just to be clear, is this the same private message system that we were looking at earlier or is it a different private messaging system? A. This message system was built into the forums. This is separate from what was on the marketplace. Q. So can we agree to call the one from the marketplace the marketplace private message system and this one the forum private message system? A. That would be accurate. Page 211 Q. Okay. And then down below, what's reflected in this half? A. This reflects that -- one of the messages being open, which is the top message that was on the message list and it's the, again, the most recent message followed by to the oldest message. Q. So the chain starts at the bottom? A. It starts at the bottom and then the most recent messages at the top. MR. TURNER: Again, just to walk the jury how to read through it, can you zoom back in, Mr. Evert. Q. So the bottom message, who is it from? A. This message was sent from a username astor. Q. What was the subject? A. The subject? There was no subject. Q. And it was sent to who? A. It was sent to my account, to cirrus. Q. The time and date of the message? Where is that reflected? A. It's sent on August 3, 2013, at 8:35 a.m. UTC. Q. Can we go back to Government Exhibit 132, please. Can we zoom into the bottom-right corner. So we look at the community forums and there's this link, Wiki. What did that link to? A. It led to a Wiki page that was available for Silk Road. Q. And what is a Wiki page? A. A Wiki page is -- it's similar to, like, Wikipedia. It's an online with add words. It's like an encyclopedia type of thing where the Silk Road built its own Wiki page, which is a tutorial effort that you can ask questions, it had guides, it had ethical information on it for users and for vendors. Page 212 Q. Can you look at Government Exhibit 119, please. A. Okay. Q. Do you recognize this document? A. Yes, I co. Q. How do you recognize it? A. It is a screen shot that I took on August 4, 2012 of the Silk Road Wiki page. Q. And what part of the Wiki page exactly? A. This one is on the buyer's guide. *(Continued on next page)* Page 213 Q. And what sort of guidance did the buyer's guide offer? A. The buyer's guide was something available to all users that would provide information on various things, such as like how to connect to the website as well as how to get bitcoins, and sort of step-by-step tutorials on how to navigate the site such as getting to the shopping cart, placing your order, payment. MR. TURNER: The government would move Government Exhibit 119 into evidence, your Honor. MR. DRATEL: No objection. THE COURT: All right. Government Exhibit 119 is received. *(Government's Exhibit 119 received in evidence)* MR. TURNER Q. I would like to read from some of this document. So it starts: "Buyer's guide. The currency used to buy stuff on Silk Road are bitcoin. Bitcoin uses encryption and a system of peer-to-peer double-checking to create a completely digital currency. No personal information is associated with your bitcoins at all, making them ideal for anonymous transactions. Additionally, Silk Road employs a built-in tumbler that mixes all incoming bitcoins through a series of dummy transactions before they ever leave. Click here for instructions on how to get bitcoins, or visit bitcoin.org to learn more." Are you familiar with the term "tumbler" in the context of bitcoins? Page 214 A. Yes, I am. Q. How are you familiar with it? A. I tested it out, trying to trace transactions that I put into Silk Road and out of Silk Road. Q. So what is a tumbler? What is a bitcoin tumbler? A. A tumbler is, sort of as is described there, where it is a way to try to mask your transactions on the block chain. Instead of being just a one transfer from one account to another, they try to put a lot of accounts in between that to try to throw you off from being able to see one transaction to another, basically. Q. Just to be clear, if I have a bitcoin address and I want to transfer to your bitcoin address and don't do it through a tumbler, how does it appear on the block chain? A. It would be just a direct transfer. It would be from your account to my account. Q. So it would just be like one green arrow like we saw earlier on the block chain? A. Yes. Q. If we run it through a tumbler, how does it appear on the block chain? A. Instead of going from your contract to mine, it would be split up. So the money would split up and go to multiple other accounts and then split up again go to multiple other accounts. This could basically balloon out to a lot of accounts before it starts coming back in together again and eventually hits my account. So it had a lot of accounts in between it, basically. Page 215 Q. What is the advantage of using a tumbler? A. It allows in this instance with law enforcement that I would know that -- MR. DRATEL: Objection. MR. TURNER: I can rephrase, your Honor. THE COURT: Rephrase. Q. Let's say that law enforcement -- as a law enforcement officer, you know a bitcoin address that I happen to be associated with and you know a bitcoin address of somebody else who I am sending bitcoins to. How does a tumbler affect your ability to trace my transfer of money to the other bitcoin address? A. As I demonstrated earlier, the block chain is public. Everything is public. All transactions are public. You could see that by going to a website like blockchain.info. I could go to a website like blockchain.info that I could view those transactions between one account and another account, and if there was a tumbler in between it, I wouldn't know who it's going to. I wouldn't be able to trace the money as easily. Q. OK. Let's keep reading. "Silk Road employs a escrow system for all transactions. This means that when you make a order, the bitcoins are deducted from your wallet, moves into a temporary escrow account, and after the vendor sends the order they confirm it being sent. When you receive the package, you confirm it being received, and the vendor receives the coin. Page 216 "If for whatever reason you do not receive the package, you can send the order into resolution, where you and the vendor can resolve the problem, or should that not work, Silk Road will step in and resolve the issue. Keep in mind, this system is to prevent fraud on both the end of the seller and the buyer." Can you scroll down, please. "Connecting to hidden services. "If you are reading this now, you have at least figured out how to access a Tor hidden service, good job. You have either installed for and configured your browser to use it, or you are using a proxy such as tor2web." Let me keep scrolling down, please. Let me read, "Receiving address." "From the moment you submit your order, to the moment it is displayed to your vendor, the information is fully encrypted and totally unreadable. Then, as soon as your vendor marks your package with the address and confirms shipment, the address is deleted forever and is not retrievable. For the extra cautious, you can encrypt your information yourself with your vendor's public key so that even we at Silk Road would be unable to view it even if we wanted to. See below for more ways to be safe." Page 217 Keep scrolling down, please. Stop. "Tumbler. Just when you thought Silk Road couldn't be more secure, we went one step further. The tumbler sends all payments through a complex, semi-random series of dummy transactions, each with a new, one-use receiving address, making it nearly impossible to link your payment with any coins leaving the site. The quantity, frequency, and number of transactions are all varied chaotically in a way that mimics the transactions of the bitcoin economy as a whole." Is this what you were referring to earlier in terms of the effect of the tumbler? A. Yes. MR. TURNER: OK. Could you scroll down, please. Q. "Receiving packages. "Use a different, unrelated address than the one where your item will be kept, such as a friend's house or P.O. box. Once the item arrives, transport it discreetly to its final destination. Avoid abandoned buildings or anyplace where it would be suspicious to have mail delivered. "Do not sign for your package. If you are expecting a package from us, do not answer the door for the postman, let him leave it there and then transport it as described above. Do not use your real name. This tactic doesn't work in some places because deliveries won't be made to names not registered with the address. If you think this is a problem, send yourself a test letter with a fake name and see if it arrives. Page 218 If you follow these guidelines, your chances of being detected are minimal. In the event that you are detected, deny requesting the package. Anyone can send anyone else anything in the mail." Besides the buyer's guide, did Silk Road also have a guide for sellers? A. Yes, it did. Q. Could you look at Government Exhibit 120, please? A. OK. Q. Do you recognize this document, this set of documents? A. Yes, I do. Q. What are they? A. A series of screenshots that I took of the seller's guide from a vendor account that I took over. Q. And the date you took those screenshots is what? A. It was September 18, 2012. MR. TURNER: The government submits or offers Government Exhibit 120 into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 120 received in evidence)* Page 219 MR. TURNER: Could you zoom in a little bit, please. Q. "Seller's guide. "Client anonymity. "You and you alone will have your client's shipping address. This information must be destroyed as soon as it is used to label their package. When you click 'confirm shipment,' the address will be deleted forever and irretrievable. Never ask your clients for personal information. Under no circumstances should you save a copy of your client's address. Publish a public encryption key in your user description on your settings page so that customers can send you their info encrypted if they wish." Briefly, what does "encrypted" mean? A. Encrypted means just protected, basically. Q. In what way? A. From being read by anyone except for the user that it is intended to read it. Q. Then underneath that, it says: "Listing. "Choose the category that most specifically matches your listing, as this makes it much easier for your customers to find your listing. Your listing will appear in this, and all parent categories above it, though these pages are cached so it can take up to an hour for your listings to appear. "If you think your item could belong in more than one category, choose the one that suits it best and let us know about the ambiguity. We may be able to reorganize the categories in a more clear Page 220 "way. If your listing doesn't fit in any of the categories, it may be on our restricted items list. See below for details." Then it says: "Notice: Do not create listings that instruct customers to pay outside of escrow, or are used for any" other "purpose" -- excuse me, "or are used for any purpose other than to list an item to be sold for the listed price using the site checkout system. If you instruct your buyers to pay you in any other way, or to contact you off-site, your seller privileges will be revoked. You may provide backup contact methods in the case of site failure." Are you familiar with the phrase "selling out of escrow"? A. Yes, I am. Q. As used in Silk Road? A. Yes, I am. Q. And what does selling out of escrow mean? A. Selling out of escrow would basically be instead of using Silk Road as your platform to buy from one vendor, that you would do the order basically off line, that you wouldn't go through Silk Road. Q. So what does that mean if I'm a seller and I sell you drugs, let's say, out of escrow on Silk Road, how would that work? Page 221 A. So, for instance, if a user sees an item advertised that they want to buy off Silk Road, they would hypothetically contact that vendor, send him a message and say -- Q. How could they send him a message? A. Through private messaging that is built into the marketplace or the forum, and contact him and say I'll buy this item from you. Will you give me a lower rate if I just send you the money directly without doing it through Silk Road, and the vendor could comply with that -- Q. What would be in it for them if they did that? A. The buyer can obviously pay less than what the price is because they are not paying the commissions from Silk Road. The vendor then can also then benefit by getting more customers and be able to undercut prices from other vendors because they don't have to pay -- their product doesn't have the commissions on top of it. Q. And this rule against selling out of escrow, is this the only time you saw that rule, or was that a regular feature of the site? A. That was talked about quite a bit on the forums, and it was something that came up quite a bit as discussion. THE COURT: All right. Is this a good time to break? MR. TURNER: Yes, your Honor. THE COURT: Ladies and gentlemen, we are going to take our lunch break now. We are going to resume promptly at 2 o'clock. So I'd ask you to get back into the jury room at maybe ten minutes before 2 so that you can get everything organized to be able to come out right at 2 o'clock. Page 222 I want to remind you not to talk to anybody about this case and not to review any media. You know, if you go onto your phone and you are looking at news reports and you see anything that may relate to this case, you are instructed that you are not to read it. You are not to review any content relating to this case at all, whether it be in newspapers or blogs or anything at all on the Internet or on any TV or radio station. OK? It is very, very important that you -- if you hear something, see something, you turn the channel, you turn off the radio, you advert your eyes. All right? And not to speak with anybody about this case at all. Thank you. We'll see you after lunch. THE CLERK: All rise as the jury leaves. *(Continued on next page)* Page 223 *(Jury not present)* THE COURT: You can step down also and take a lunch break and we will pick up again at 2 o'clock. THE WITNESS: Thank you, your Honor. THE COURT: Thank you. Ladies and gentlemen, let's all be seated. THE COURT: I am just waiting for the witness to leave. *(Witness not present)* MR. TURNER: I did want to now -- having had additional testimony from the witness relating to screenshots regarding computer hacking and fraudulent identification documents along with the narcotics, I did want to further indicate that the Court has made the findings that would be supportive of the co-conspirator exception with respect to the screenshots that had text that indicated either the word "forgery" or something else. In each case, as the government had proffered before trial and as reflected in the Court's decision on the motions in limine, the government's theory is that the defendant is in one or more conspiracies. As the law is clear, the conspiracy charged does not have to be the conspiracy to which something relates for purposes of the co-conspirator exception. I do find that there has been a sufficient showing of evidence supportive of a conspiracy in each of the instances where we have been reviewing the screenshots to support the finding of the conspiracy and then the material being in furtherance of. The reason that I say that is because it doesn't make any sense to have a listing on a website for purposes of buying and selling the item in question unless in fact the item is in fact what it purports to be. And so, therefore, it would be in furtherance of a conspiracy to engage in the activity indicated, either a narcotics conspiracy or computer hacking conspiracy or the fraudulent ID conspiracy. Page 224 This is by no means any kind of ultimate finding on any of these conspiracies. This is a different type of evidentiary finding simply for purposes of the hearsay objection, and I am required to make such findings in order to determine that the hearsay objection has been appropriately dealt with, and that's the reason for the Court taking the time to do that now. As I had indicated earlier at the sidebar, Mr. Dratel, there were a number of times when you had objected to documents where there were not objections that were indicated in the Pretrial Order. THE DEFENDANT: Your Honor -- THE COURT: I want us to understand what the objections were. MR. DRATEL: Sure. My client wishes to clarify something. Page 225 THE COURT: Yes. THE DEFENDANT: To your previous point, I just wanted to clarify something. THE COURT: Yes. *(Pause)* THE DEFENDANT: Thank you, your Honor. THE COURT: All right. Thank you. Mr. Dratel, on Exhibits 116A and 116B -- MR. DRATEL: Let me just go back and look at my notes. THE COURT: These are the screenshots of the -- MR. DRATEL: What you were just talking about, right. Hearsay, not part of -- not a conspiracy, not necessarily true. I mean, it is coming in for the truth when we have no idea whether these people are actually offering these items for sale, scamming the customers. There is no basis to believe that just based on a screenshot. THE COURT: I understand that position. I just note that you had not reflected that objection in the Pretrial Order, and it is of the type of objection that would have been the kind of thing you could have anticipated. Nevertheless, I am not going to find that you have waived that objection. I think it is of the type that you had elsewhere asserted. But if there are other places where, upon reflection, you think that we should include an objection, I am happy to think about that but I would like to have some advance notice -- Page 226 MR. DRATEL: Sure. THE COURT: -- if you've got an objection. That is the purpose of the Pretrial Order. The Court does understand that those are the objections up to this point. They are in the nature of the prior objections, similar to those which the Court has already dealt with, and then they were similarly overruled for the same reasons as set forth in the Court's in limine ruling and also elsewhere on the record today. All right. So that is also for 117A and 118 -- 117A, 117B. MR. DRATEL: Right. THE COURT: The same thing? MR. DRATEL: Just let me look at it. THE COURT: I believe 117B is not in for the truth. MR. DRATEL: Right. That's really for the truth, again, the question of hearsay. Also, the question of whether all the people who are posting messages there are not conspirators so it can't come in for the truth. I mean, there is no proof that they ever bought or sold -- THE COURT: Right. That is done with the purpose of my limiting instruction, and I will go back -- if you believe that there are some as to which there should be a limiting instruction in addition to that which I have already given, provided to the jury, I am happy to entertain that request. Page 227 MR. DRATEL: OK. THE COURT: You Will let me know. MR. DRATEL: Yes, your Honor. Thank you. THE COURT: I wanted to clarify that for Government Exhibit 801A, you did not object to it being received. There were objections noted in the Pretrial Order that I believe were simply to the underlying documents which we've elsewhere dealt with; is that right? MR. DRATEL: That is correct, your Honor. Once -- I think the condition of our stipulation is if the Court admitted it, we were not going to object, but obviously we object to the underlying connection for the same reasons that we did, obviously, in the pretrial proceedings. We objected on the basis of its connection to the charged conspiracies and things like that. THE COURT: All right. Is there anything else that that you folks would like to deal with right now? MR. TURNER: No, your Honor. MR. DRATEL: No, your Honor. THE COURT: So if there is any other limiting instruction, Mr. Dratel, that you think the Court should provide, let me know and I will consider it; otherwise, I think I have done what I intended to do. MR. DRATEL: It is probably more in the nature of going back and looking at the exhibits to determine whether we will ask the Court to add certain exhibits to the instruction, to include them within the instruction that the Court gave. Page 228 THE COURT: Just let me know if you want to make an application in that regard. MR. DRATEL: Thank you, your Honor. THE COURT: We are adjourned until 2 o'clock. I have a matter in here at 1:30. I will try to do it in the robing room, if I can. But otherwise, just for purposes of giving me the opportunity to do it out here, why don't we just leave two spots on the far right, which seem to have less on it than the other tables. You can leave the Elmo where it is. MR. DRATEL: Do you want us to clear? THE COURT: Not everything. Only the two spots to my right. THE CLERK: All rise. *(Luncheon recess)* Page 229 A F T E R N O O N S E S S I O N 2:03 p.m. *(Jury not present)* THE COURT: I understand the jury is ready so let's get them out. THE CLERK: All rise as the jury enters. *(Jury present)* THE COURT: All right. Ladies and gentlemen, let's all be seated. And for your planning purposes, typically, although things come up and change the schedule a little bit, typically we take our mid-afternoon break around 3:20 to 3:30, and then when we come back we go 'til just before 5. Just so that you have that in your mind. Again, if anybody needs a break on any other schedule, just make eye contact with Joe or with me. All right? Thank you. Mr. Turner, you may proceed, sir. MR. TURNER: Thank you. JARED Der-Yeghiayan, Resumed, and testified further as follows: DIRECT EXAMINATION (Resumed) MR. TURNER Q. Agent Der-Yeghiayan, when we left off we were talking about selling out of escrow. Do you remember that? Page 230 A. Yes, I do. MR. TURNER: Mr. Evert, could you put 113A back on the screen. Q. So, briefly, just to clarify, when you are talking about selling out of escrow, could you explain how it differs from the model shown on this chart? A. Sure. It would essentially be skipping this entire section, and the money just goes straight to the vendor but outside of Silk Road. Q. Was there an abbreviation ever used commonly on Silk Road to refer to out of escrow sales? A. It's "OOE." MR. TURNER: Could we go back to Exhibit 120, please, page 4, and could you zoom in at "Images." Q. It says: "Images. "Some cameras" -- just to clarify, can you remind the jury what exhibit we are reading here, what the nature of this exhibit is? A. It is from the seller's guide from Silk Road. Q. So it says: "Some cameras record information about you in an image's metadata such as GPS location. If you link to an image in your listing, be sure to remove all metadata from the file that could reveal details about your identity." Could you explain what's being referred to here? A. So what they're saying is basically there is data that's contained sometimes within an image, things such as the date it was taken, the time it was taken, as well as sometimes there could be GPS. So it is like satellite coordinates could even be included in an image if you use like a mobile phone. So it is called tagging your image. And basically they could locate you. So those coordinates would be where you took that image from. Page 231 Q. What sort of images would be posted on a Silk Road vendor page? A. A vendor could have an image that is for them as well as for the listings they are posting up so there would be potentially information in those images that basically law enforcement or someone else could find out who they are or where they are at. MR. TURNER: Could you go on to page 5, please. "Packaging," the entire section. Q. It says: "Packaging. "Every precaution must be taken to maintain the secrecy of the contents of your client's package. Creatively disguise it such that a postal inspector might ignore it if it was searched or accidentally came open. "Ship USPS if within the United States. They must obtain a search warrant to open any packages. "If the contents of the package have an odor or can be detected by canine or electronic sniffers, you must vacuum seal the package. Do not use odor masking agents such as coffee" beans -- excuse me, "such as coffee because dogs are trained to sniff for these, too. Check that the vacuum seal bag is holding tight around its contents otherwise there is probably a leak. Page 232 "Make sure the exterior of the package raises no suspicion. Look as professional as possible. The idea here is blend in as much as possible with the rest of the mail stream, which is mostly "business reply mail." Please print your labels, as handwritten labels can be a give away. "Protect the contents of your package. If your item is brittle (such as pills), it needs to be sent in padded packaging (such as a bubble mailer). Do not send pills or any bulky items in envelopes. Envelopes get flattened in automated sorting machines and their contents get crushed. "Do not reveal the details of the packaging you use. You can be tracked this way." How do these packaging practices compare to those you saw in the shipments that you seized at O'Hare? A. It was -- they appeared to take this advice because a lot of the packages did have -- MR. DRATEL: Objection. THE COURT: Hold on one second. Sustained. MR. TURNER Page 233 Q. Just in terms of the appearance, rather than anybody's intent, could you explain how the shipping practices you saw resembled the practices described here? A. They did have -- they did take steps to try to mask the odor. They did take steps to try to put foil around it under the belief that that would potentially block x-ray. So there is -- and as well as doubling up packaging as well. Q. In terms of the professional appearance of the envelopes that you seized? A. The packages did appear to be commercialized and businesslike in that they used printed labels and they used business logos most of the time, too. Q. So how could you become a seller on Silk Road, if you know? A. There is -- off the profile that you would have after you create an account, a user name, there would be a link on the account page to say "Become a seller," and you would simply click on that. Q. Would you look at Government Exhibit 121A, please. A. OK. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. This is a screenshot that I took from an account I took over on May 1, 2013. MR. TURNER: The government offers Exhibit 121A into evidence, your Honor. Page 234 MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 121A received in evidence)* MR. TURNER Q. Could you zoom in on the account links on the side. Do you see the link you were just describing? A. Yes, I do. Q. So where is it? A. It's at the bottom. It says, "Become a seller." Q. If you clicked on that link, what would show up? A. It would come up to a seller's contract on another page. Q. Could you take a look at Government Exhibit 121B. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It was a screenshot that I took from my account, and it is from October 23, 2012. Q. And what is it a screenshot of? A. It is of the seller's contract. MR. TURNER: The government offers Government Exhibit 121B into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 121B received in evidence)* Page 235 MR. TURNER: Could you zoom in under "Shop by category" down to "I agree," please. There you go. Q. OK. It says: "Get your products to your customers quickly, easily, and anonymously, as a Silk Road independent seller. Please read the following contract and the seller's guide carefully. By clicking 'I agree' at the bottom, you agree to abide by the guidelines and terms below when selling on Silk Road. "Seller contract. "Client anonymity. "You and you alone will have your client's shipping address. This information must be destroyed as soon as it is used to label their package. "Packaging. "Every precaution must be taken to maintain the secrecy of the contents of your client's package. It is your responsibility to stay up to date on the latest stealth shipping methods. Describe your items accurately and truthfully. Treat your customers with respect. Go above and beyond with them. Read the seller's guide. Don't skip this step, as it includes further information you will be held accountable for as a vendor. If you have used this account as a buyer, stop now. You want to use a fresh, clean account. Remember, violating the rules here will result in your vendor account being banned. I agree." Page 236 Did you ever test out what would happen if you click on "I agree"? A. Yes, I did. Q. And what would happen? A. It would take you to another page that then would instruct you to pay a fee to become a vendor. Q. Could we go back to Government Exhibit 132, please. Down at the bottom again there are links. We looked at "Community Forums" and the "Wiki." What was the "Support" link for? What did that lead to? A. That would lead to a customer support page for Silk Road. Q. And what could be found there? A. There would be a frequently asked -- it would be steps basically trying to provide the user information about if they had a question, it would link you to a frequently asked page, a questions page, as well as give you a link to have direct contact with a customer support representative. Q. What was that called when you would submit something to customer support? A. It is called submitting a ticket. Q. And what sort of issues would be submitted to the customer support on Silk Road? A. Anything from like an order that didn't go right or something, a problem with a vendor. Q. Now, did anyone on Silk Road purport to be in charge of the site? Page 237 A. Yes. Q. And how is that user known? A. As "Silk Road" or as "Dread Pirate Roberts." Q. Was he known by any shorter nickname as well? A. As "DPR." Q. Was the Dread Pirate Roberts a target of your investigation of Silk Road? A. Yes, he was. Q. Could you go back to Exhibit 132, please. Up at the top of the screen there is "A few words from Dread Pirate Roberts." What would happen if you clicked on that? A. If you clicked on that, it would take you to another page where you would have a message for the users on there. Q. What type of message? A. Like a greeting message. Q. How else did Dread Pirate Roberts, or DPR, communicate with the site's users? A. Through the forums. Q. Could you take a look at Government Exhibit 123, please. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a screenshot that I took of Dread Pirate Roberts' profile in the forums on April 2, 2012. Page 238 MR. TURNER: The government offers Government Exhibit 123 into evidence. MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 123 received in evidence)* MR. TURNER Q. I just want to make sure, is this the exhibit that you are looking at? A. Yes. *(Pause)* No. 123 -- oh, I'm sorry. I was looking at 123A. Q. OK. A. But this is also a screenshot that I took on 123. Q. So you are looking at what we see on the screen here? A. This is Dread Pirate Roberts' profile page on Silk Road. Q. When did you take this screenshot? Is it indicated anywhere on the screen here? A. I took it at 2:30 -- around 2:34 a.m. UTC on May 9, 2013. Q. Let's just be clear, 2:34 a.m. or 5:17 a.m.? A. I'm sorry. That's 5:17 a.m. Q. So this is the forum profile of the Dread Pirate Roberts. Could you explain what that means? What was the forum profile? A. So each user would have a profile page on the forums that would be associated to their account. Q. And what was it for? Page 239 A. It was to -- it was basically to communicate with another user. If you wanted to, you could also check some statistics about the user or information or share information about a particular user from that page. Q. OK. And it says -- first of all, it says, "Date registered here." Actually, let's start over on the left. "Dread Pirate Roberts," is that his user name? A. Yes. Q. Then under that it says "Administrator." What did that refer to? A. It referred to as that user's title on the forum. Q. Is that something -- well, strike that. Underneath there is a little image of it looks like a pirate. Was that something that -- how was that determined, the image associated with your profile? A. That was referred to as the avatar, and it's basically a feature within the forum when you create a user account, that you could upload an image that you could use to use on your profile. Q. All right. Now look at the "Date registered" in the middle there. What does that refer to? A. "Date registered" would be the time that that account was registered, date and time in UCC. Q. Registered on the forum? THE COURT: What does "UTC" mean? Page 240 THE WITNESS: Universal Time, which is Greenwich Mean Time. THE COURT: All right. Q. How does that compare to the Eastern time zone? A. It is four or five hours off, depending on the time of the year. Q. Depending on the time of the year? A. Yeah, Daylight Savings Time. Q. OK. Where is it? Where is UTC or Greenwich Mean Time? A. Closest to England, pretty much. Q. So this is the date the account was registered on the forum? A. Yes. Q. And then it says "Local time." What does that refer to? A. That refers to the local time on the server. Q. Was this the time that you were on the page? A. Yes. Q. And then "Last active," what does that mean? A. That would be the last time the account was active on the forum. Q. What does it mean for the account to be active on the forum? A. The last time they actually took some time of step like click on something or was online or doing something on the forum. Page 241 MR. TURNER: Then can you zoom in on the signature on the bottom. Q. What was the signature for? A. That was a feature that any user can add a signature at the bottom of their profile. They could be anything that they want. Q. Like what sorts of things? A. It could be quotes. It could be that people would put sometimes their listings or links to their vendor profiles, things of that nature. Q. And was this something that the user that is associated with the profile would choose him or herself? A. Yes. Q. And this signature here, you took this shot when, again? A. This was May 9, 2013. Q. Was this typical when you would view DPR's forum profile, was this typically the signature you would see below? A. You would have this or other things usually related to that particular website. Q. Which particular website? A. It's the mises.org website. Q. Can we take a look at Government Exhibit 123A, the one you were looking at before. Do you see it in front of you? A. Which one? Q. 123A. Page 242 A. 123A, yes. Q. OK. Do you recognize that? A. I do. It is a screenshot again from Dread Pirate Roberts' administrator account from April 2, 2012. Q. So the one we just looked at was from July 2013. A. May. Q. Did I mess that up? A. The last one was from May 2013. Q. And this was from April the year earlier? A. Yes. MR. TURNER: The government offers Exhibit 123A into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 123A received in evidence)* MR. TURNER: Could you go back down to the signature. Q. OK. So there it links to mises.org there? A. Yes. MR. TURNER: Now, could you zoom out, Mr. Evert. Q. Was there a way of pulling up all of the posts of the Dread Pirate Roberts on the forum at one time? A. Yes. Q. How did you do that? A. It's whatever is available to your account, you could click on the left-hand side, underneath the avatar there is a feature called "Show posts." Page 243 Q. Right there. And did you ever review all of Dread Pirate Roberts' poses? A. Yes, I did. Q. How often? A. Pretty regularly over the course of the investigation. Q. From reviewing Dread Pirate Roberts' posts on the forum, what did you understand his role on the site to be? A. That he was in charge of the site, that he was operating the site. Q. Could you take a look at Government Exhibit 125A, please. Do you recognize this screenshot, or this document? A. Yes, I do. Q. How do you recognize it? A. It's a screenshot that I took, or, actually, that -- yeah, that I took that was in the forum of Dread Pirate Roberts -- one of Dread Pirate Roberts' posts, October 6, 2013. MR. TURNER: The government offers Government Exhibit 125A into evidence. MR. DRATEL: 125A is -- no objection. THE COURT: All right. Received. *(Government's Exhibit 125A received in evidence)* Q. OK. So it says at the top, is this the topic -- you tell me, where is the topic or the subject of the post? A. It is up at the top. It says, "Business as usual." Page 244 Q. And the date is June 18, 2011? A. Yes. Q. And it says: "Hey, gang, really sorry for the dead time there. Hopefully most of you got the message on the bitcoin forum or at silkroadmarket.org. The only major change is this forum. We have it running on a separate server with its own URL so that if the main site ever goes down again, first check here for updates. Unfortunately, this means we have separate logins for the main site and the forum. "As we mentioned before, everything was backed up and totally restored, but if for some reason a deposit didn't make it into your account or something like that, just let us know and we'll track it down and credit you. Also, we're giving everyone a 4 day grace period on taking orders to the resolution center before they are auto-resolved, so sellers, you may see some orders past due for a few days. "Thanks everyone for hanging in there with us. This work is scary and exciting all at the same time, and I'm really very happy to be on this journey with all of you. "Cheers, Silk Road staff." So could you explain when this post was announced? A. This is the first post that Dread Pirate Roberts, or the Silk Road at the time, made on the forums. *(Continued on next page)* Page 245 Q. And what was it announcing? A. It was announcing that he created another -- created the forum basically to help get messages out if there was downtime on the market. Q. So we saw before that the Dread Pirate Roberts account was registered when approximately? A. It was around June 2011. Q. And this is the very first post by that account? A. Yes. Q. And it's signed Silk Road staff, is that right? A. Yes. Q. So at that point, was the name Dread Pirate Roberts associated in any way with this administrator account? A. It was. Oh, at this time? Q. In July 2011? A. No, it was not. Q. When did that change? A. That changed approximately January or so of 2012, I believe. Q. Can you take a look at Government Exhibit 125B. Do you recognize the pages of this exhibit? A. Yes, I do. Q. How do you recognize it? A. Screen shots that I took of more posts made by Silk Road/Dread Pirate Roberts on October 6, 2013. Page 246 MR. TURNER: The government offers Government Exhibit 125B into evidence. MR. DRATEL: The previous objection, your Honor. THE COURT: Hold on one second. GX 125B is received. *(Government's Exhibit 125B received in evidence)* MR. TURNER: Can you put it on the screen, please. Q. Okay. So the subject is let's play the name game. The date is January 31, 2012. And it says, who is Silk Road? Some call me SR, SR admin or just Silk Road. But isn't that confusing? I am Silk Road, the market, the person, enterprise, everything. But Silk Road has matured and I need an identity separate from the site and the enterprise of which I am now only a part. I need a name. Actually, I already have a name picked out. It is a great name. You are going to love it. It is perfect on so many levels. But, I'm not going to reveal it until this weekend, when our customer appreciation sale is in full swing. And let's go to the next page, please. It this is approximately six days later, and it says drum roll please, and my new name is Dread Pirate Roberts. So after this, how did the username associated with this forum account appear? A. After this date, it was Dread Pirate Roberts on the forums. Q. And it says at the top here "Begin PGP signed message." And then at the end "Begin PGP signature, end PGP signature." Page 247 Are you familiar with PGP? A. Yes, I am. Q. Have you used PGP before? A. Yes, I have. Q. Can you explain at a general level what a PGP signature is and what it's used for? A. PGP stands for pretty good privacy, and it's basically a system that -- it's like stamping -- an electronic way of putting a signature or an electronic way to verify who you are that it's like putting a seal on something or stamping something as yours. Q. So what does it mean, "verify who you are"? Are you talking about a new identity or something else? A. No. Meaning, like, verify that the user that you originally know that person as as being that same user online, I guess. Q. So, what would you need -- if you see this, how do you verify that the user who sent this is the Dread Pirate Roberts? A. With this, what you'd have to do is you would have to have what's called a public key. So with this PGP software, when you use it, you give out other people your public key and people can put that into their PGP program. And something like this, if you wanted to verify if this message was signed by that person that you know who gave you that public key, it will verify it and tell you it's a good signature. Page 248 Q. Can you take a look at Government Exhibit 133. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took from the Silk Road marketplace of Dread Pirate Roberts' profile. Q. And what date did you take that? A. August 19, 2013. Q. And what does it contain? What information does it contain on the page? A. On his profile page, it contains Dread Pirate Roberts', his public key. MR. TURNER: Government offers Government Exhibit 133 into evidence. MR. DRATEL: Objection based on the same ground, based on the same. THE COURT: All right. Government exhibit 133 is received. GX 133 is received. *(Government's Exhibit 133 received in evidence)* MR. TURNER: Can you zoom in on the text and above starting with "The following PGP key." Q. So it says the following PGP key can be used to verify messages signed by the Silk Road administrator Dread Pirate Roberts. Page 249 Now, again, you took this screen shot when? A. I took it August 19, 2013. Q. So if you wanted to verify that a message sent by -- that a message posted by the Dread Pirate Roberts on some later date was posted by the same user who put this -- who controlled this public key as of August 19, 2013, how would you do it? A. Using this information here -- MR. DRATEL: Objection. Object to the form of the question. THE COURT: Why don't you restate the question. MR. TURNER: Sure. Q. Just explain. What is the point of this information? You see it August 19, 2013. What does it allow you to do? A. Using the public key, what I would do is basically copy that entire block from the beginning PGP public key to the end, PGP public key, and you would import it or bring it into your program, and then you could use that then to verify messages that are signed by that user. Q. And when you say verify the messages, as a practical matter, what does that mean? What does it assure you of? A. It assures you that the person that has that public key wrote that message that they signed. MR. DRATEL: Objection. Foundation. Page 250 THE COURT: Sustained. You'll need to come at it differently for that. The jury will disregard the last answer. MR. TURNER: I'll come back to it later. Q. Take a look at Government Exhibit 125C, please. Do you recognize this document? A. I'm still navigating. Q. Sure. A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took of other posts made by Dread Pirate Roberts on the forum on October 6, 2013. Q. And what is the post about? A. On which post? There's multiple posts. Q. What do they generally concern, the posts? A. There's multiple posts on the screen shot that demonstrate when the site -- the Silk Road site was down for maintenance. MR. TURNER: The government offers Exhibit 125C into evidence. MR. DRATEL: Objection for the reasons previously stated. THE COURT: Government Exhibit 125C is received. *(Government's Exhibit 125C received in evidence)* Q. Were there times when Silk Road would go down for maintenance? Page 251 A. Yes, there was. Q. And when it did, how would users be notified about it? A. Generally through the forum such as a post that would be made by Dread Pirate Roberts. Q. So, if we could -- where does this begin, which is the oldest post in the list? A. The oldest post would be at the bottom. MR. TURNER: Mr. Evert, can you scroll to the text there. Q. The top says main site down for maintenance, date July 22, 2011. It says we are down to fix a problem that has been causing intermittence over the past couple of days. So sorry for the trouble, we'll keep you posted if anything develops and hopefully we'll be back online asap. Would you please scroll up. The next couple of days later: We're live again, hopefully with no more problems, though if your fix didn't work, we may have to go down again sometime in the next few hours. Yeah, it looks like the fix didn't work, stay tuned for updates. Ok I think we got it, the recent feedback display on the homepage was the problem. We were displaying it -- the way we were displaying it was inefficient and using up all of the server resources, took it down and it seems to be fixed now. Page 252 Could you remind the jury was a server means? A. A server is just basically a computer that can host a website. Q. Did Dread Pirate Roberts ever post anything about the servers used to run the Silk Road website? A. Yes, he did. Q. From reading those messages, who did you understand who controlled those servers? A. Dread Pirate Roberts. Q. Can you take a look at Government Exhibit 125D. THE COURT: "D" as in David? MR. TURNER: Yes. A. Okay. Q. Do you recognize this screen shot? A. I do. Q. How do you recognize it? A. It's a screen shot I took of another post made by Dread Pirate Roberts that I took on October 6, 2013. MR. TURNER: The government offers the exhibit into evidence, your Honor. MR. DRATEL: Objection for the reasons previously stated, your Honor. THE COURT: All right. Government Exhibit 125D as in David is received. *(Government's Exhibit 125D received in evidence)* Page 253 Q. This is dated October 19, 2011, the title is "site outage". And it says we are terribly sorry for the sudden outage today. We will be back up as soon as possible. Thank you for your patience. Update, we are having to rebuild the site from a backup. All bitcoins in user accounts and the escrow are accounted for and all site data has been saved except for roughly the last 30 minutes of activity preceding the outage. Any messages you sent or activity you engaged in during that window will have to be re-done except for deposits and withdrawals. Also, all of the pictures were not backed up, so sellers will need to re-upload them. There was no security breach or anything to worry about that led to this situation. We lease server space in different locations around the globe through unaware third parties. We do this to hide the identities of those that run Silk Road in the event of a security breach in one of the servers. Unfortunately, this means we have to deal with some unreliable people who, without revealing too much detail, didn't keep their promises and led to our servers being shut down. Do you know what it means to lease server space from a third party? A. I'm sorry. Could you repeat? Q. Do you know what it means to lease server space from a third party? Page 254 A. Yes, I do. Q. How are you familiar with that? A. In the course of the investigation, we have leased server space from providers. Q. What does that mean? What does that mean to lease server space? A. It means going to a company that provides servers and basically leasing the server or leasing space on a server to host a website. Q. So does this mean, like, getting an actual, physical server delivered to you or does it mean something different than that? A. It means getting remote access to one through the Internet. Q. And where are the servers themselves hosted generally? A. Usually in various locations around the world. Q. All right. So besides -- besides Silk Road's technical infrastructure, what about the goods that were sold on the site? Were any of DPR's posts about that? A. Yes. Q. Could anything be sold on Silk Road or were there rules about that? A. There were some restrictions of items that could be sold. Q. And who appeared to set those rules? A. Silk Road itself, Dread Pirate Roberts. Q. Can you take a look at Government Exhibit 125H. Do you recognize -- I'll wait for you. Page 255 A. Yes. Q. Do you recognize this document? A. I do. Q. How do you recognize it? A. It's another screen shot of a post from the forums that I took on October 6, 2013 of posts from DPR. MR. TURNER: The government moves Exhibit 125H into evidence. MR. DRATEL: Previous objection, your Honor. THE COURT: GX 125H is received. *(Government's Exhibit 125H received in evidence)* Q. The title is forgeries and the date is August 5, 2011 and it says we are happy to announce a new category in the marketplace called forgeries. In this category, you will find offers for forged, government issued documents including fake IDs and passports. This category comes with some restrictions, however. Sellers may not list forgeries of any privately issued documents such as diplomas/certifications, tickets or receipts. Also, listings for counterfeit currency are still not allowed in the money section. What did Dread Pirate Roberts' posts reflect, if anything, about who controlled the commissions charged for sales in the website? A. It reflected that Dread Pirate Roberts did set the commission rate. Page 256 Q. Take a look at Government Exhibit 125G -- excuse me -- 125J, please. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a screen shot that I took from DPR's posts on the forum that was taken on October 6, 2013. MR. TURNER: The government moves 125J into evidence, your Honor. MR. DRATEL: The previous objection, your Honor. THE COURT: GX 125J is received. *(Government's Exhibit 125J received in evidence)* Q. The subject is re: State of the Road Address. So is this post a response to something else? A. The "re" would stand for a reply to a thread, and that thread would have been, in this case, the State of the Road Address. Q. Are you familiar with the context of this post? A. Yes, I am. Q. What was it? A. In the state of the road -- State of the Road Address, Dread Pirate Roberts talked about different things that he was planning on doing with the website, as well as he set a new commission rate from a fixed rate that they previously had to a tiered commission rate. Page 257 Q. And were there some Silk Road users who were not happy about the change in the commission rates? A. There were replies that were in the original thread that were not as supportive of the changes. Q. Okay. From January 10, 2012, it says thank you, everyone for your comments and suggestions. One suggestion I especially like is the one about commission being affected by trade volume. To those of you that are either supportive of the change, or have faith in what I'm doing regardless of whether you see the point or not, thank you for your support! I have done everything I can to earn that trust and I cherish it. To those of you chalking my actions up to pure greed and ignoring the context for the changes, I say shame on you. When have I lied? When have I cheated or stolen from anyone here? When have I treated anyone unfairly? When have I led you astray? Why do you turn on me now when I have poured my heart and soul into this community and project? Ten percent on 50-dollar orders, we're talking about an extra $1.88. A ten-dollar order, an extra 38 cents. Do you think this site built itself? Do you think it runs itself? Do you have any clue what goes on behind the scenes to keep this going? Do you have any idea the risk the people operating this site are taking? Do you have any clue what we've been through to get here today? Do you have any clue what it's going to take to get through the next year? Page 258 Whether you like it or not, I am the captain of this ship. You are here voluntarily and if you don't like the rules of the game, or you don't trust your captain, you can get off the boat. For those that stay, we at Silk Road will continue to do everything in our power to keep this market running smoothly and safely, and thank you again for your support! Can you take a look at Government Exhibit 125K. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's another screen shot from Dread Pirate Roberts' forum account of a post he made and I took it October 6, 2013. MR. TURNER: The government offers 125K into evidence. MR. DRATEL: The previous objection, your Honor. THE COURT: Government Exhibit 125K is received. I'm just hesitating because I'm trying to determine whether or not the statements -- why don't you have the witness talk about who is saying what to whom? There are shaded areas, what they're referring to, and I'll see if there's an issue. MR. TURNER: Okay. THE COURT: But 125K is received subject to the Court confirming certain pieces of it, which I believe will be confirmed through additional testimony. Page 259 MR. TURNER: I'm just going to be focused on the last quarter of the document under quote number four, except for that quote. THE COURT: I see. Government Exhibit 125K is received. *(Government's Exhibit 125K received in evidence)* Q. So the subject line here is, again, re: State of the Road, this time, re: State of the Road comment. MR. TURNER: Can you zoom into this area, Mr. Evert. Q. Again, is the context of this thread, this post, still the State of the Road Address where his commission changes were announced? A. Yes, it is. Q. And it starts off, it says -- this little blue shaded area and it says, quote from paperchasing on January 11, 2012, 7:29 p.m., problem number four, what about the BTCs I send out to exchangers? Is that taxed? First of all, this is a formatting issue. What does it mean the quote from the blue shading? A. Within a post or reply you make, you could also quote other users or quote anything really for that matter by either selecting the previous post and pressing a button that would automatically quote it. Q. Down here? A. Yes. Page 260 Q. "Quote"? A. Or enter it in by hand, you can enter in a quote like that Q. So it's the username paperchasing that's being quoted here? A. The user is paperchasing that's being quoted. Q. And it was a post paperchasing made that said what about the BTCs. I send out those exchanges. Is that taxed? Right? A. The section in blue that follows after paperchasing on January 11, 2012 is the comment that was made by paperchasing or is being quoted from paperchasing. Q. Now, before you testified that there were bitcoin exchangers that operated on Silk Road itself, right? A. Yes. Q. So it says here underneath, this text here, who posted that? A. That would be from Dread Pirate Roberts. Q. It says I'm not sure exactly what you are talking about here, but the practices of bitcoin exchangers on that site are not affected by the new policies. Again, the site was never designed to support bitcoin exchange, but since people want to use it that way, we will accommodate and are presently working on a solution. Also, you are misusing the word tax, which I think is why you were accused of acting like Silk Road is a government. What you are referring to is more appropriately called a commission or a broker's fee. It would be a tax if I tried to take money from you based on a transaction I wasn't involved in. You are free to sell whatever you want to whomever you want without my interference, but if you are going to use the Silk Road platform to meet your customers and advertise your wares, you will need to pay a commission. Page 261 Thank you everyone for your support! Going back to the seller's guide for a minute, we talked about the rule that banned Silk Road sellers from selling OOE or out of escrow. Do you remember that? A. Yes. Q. Did DPR ever post anything about that rule on the forums? A. DPR would remind users if there was a vendor that did this, that it's prohibited. Q. Could you take a look at Government Exhibit 125G. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It is a screen shot that I took of DPR's posts from the forum which I took on October 6, 2013. MR. TURNER: The government offers 125G into evidence. MR. DRATEL: Same objection, your Honor. THE COURT: Government Exhibit 125G is received. Page 262 *(Government's Exhibit 125G received in evidence)* Q. It says here vendor roundtable/the rules are like gravity. What section of the forum was this in? A. This was in a restricted -- it was a hidden forum within the forum that was only available to verified vendors from the Silk Road marketplace. Q. And the topic is "The rules are like gravity," the date is November 25, 2012. Each week I get a report from my reps. Part of that report is the vendors who were demoted that week. There is always at least one, with the most common offenses being asking customers to pay directly, going around the escrow system, and scamming customers by asking them to finalize early. One demoted vendor this week was pleading for his account back over and over and wouldn't take no for an answer. I hate seeing that kind of thing, but for a rule to have any meaning, it has to apply in all cases all the time, like the laws of physics. Gravity doesn't care if your intention was to fly or jump, or how important or insignificant you are. It will pull you down every time in the same way. Just like that, we will enforce the rules every time, in the same way, to everyone. If you are breaking the rules, it is only a matter of time before you will be demoted. Please have the integrity to play by the rules of the game you signed up for so we don't have to keep ruining people's businesses and dealing with the fallout of scams. It's not worth it. Page 263 To those honoring the contract you signed up with (99.9 percent of you), thank you for your shining example! You testified earlier that most of the drugs -- excuse me -- most of the goods on sale on Silk Road were illegal drugs? A. Yes, they were. Q. Now, based on DPR's posts, did DPR seem to be aware of that? A. Yes, he was. MR. DRATEL: Objection. THE COURT: Hold on one second. Sustained, and that answer is struck. Q. Take a look at Government Exhibit 125L. Do you recognize this document? A. I do. Q. How do you recognize it? A. It's a screen shot of a post from DPR that I took on October 6, 2013. MR. TURNER: The government offers 125L. THE COURT: 125L as in Larry. MR. DRATEL: The previously stated objection. THE COURT: All right. GX 125L is received. *(Government's Exhibit 125L received in evidence)* Page 264 Q. The subject is just "re: chat" and it says it's great enough -- excuse me -- it's great to see that my words are resonating with so many of you. It's a privilege to have a stage to speak from here. It doesn't get said enough, and it is hard to get across in this medium but...I love you. Who knew that a softy could lead an international narcotics organization? Behind my wall of anonymity, I don't have to intimidate thankfully, but, yeah, I love you guys. Thank you for being here. Thank you for my comrades. Thank you for being yourselves and bringing your unique perspectives and energy. And on a personal note, thank you for giving me the best job in the world. I've never had so much fun. I know we've been at it for over a year now, but really, we are just getting started. I'm so excited and anxious for our future, I could burst. Did Dread Pirate Roberts run the site alone or did he have a support staff? A. He had a support staff. Q. How do you know that? A. Because I took over the account that was one of the support staff's. Q. And when you say "took over," remind the jury what you mean. A. That means that either through interview or arrests, I was given consent to utilize an account that belonged to his support staff. Page 265 THE COURT: Could you explain that a little bit more. THE WITNESS: Sure. So, through the course of the investigation, identified someone that was a support staff member that through interviewing and through talking to the person, they were -- they gave us authorization, the government, to use that account by giving us the username and password to all the different marketplace and forum that account had. THE COURT: All right. Q. What was the username associated with the support staff account that you took over? A. It was cirrus. Q. How do you spell that? A. C-I-R-R-U-S. Q. And approximately, when did you take over the cirrus account? A. It was late July 2013. Q. And was this an account on the Silk Road marketplace or the Silk Road forum or both? A. It was both. Q. When you got access to these accounts, did that access include the private message in boxes associated with the accounts? A. Yes, it did. Page 266 Q. And when you took over the accounts, were there any messages in those in boxes already? A. Yes, there was. Q. Could you take a look at Government Exhibit 126A. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It was a screen shot of one of the private messages that was in the account that I took. I took the screen shot on September 30, 2013. Q. And when you say private messages, are you talking about the forum private message system or the marketplace private message system? A. This was a forum private message. Q. And this was the cirrus account on the forum? A. Yes, it was. MR. TURNER: The government offers 126A into evidence. MR. DRATEL: The previously stated objection. THE COURT: All right. Government Exhibit 126A is received. Hold on for just one moment if you would, please. *(Government's Exhibit 126A received in evidence)* THE COURT: What was the approximate date when you took over the account, sir? THE WITNESS: Approximately July 26, 27th of 2013. THE COURT: Thank you. Page 267 You may proceed, Mr. Turner. MR. TURNER: Thank you. Can you publish the exhibit, Mr. Evert. Q. Where does the chain begin? Top or bottom? A. The post in the bottom is the oldest post. Q. Okay. It was sent July 12, 2013 a.m. So was this already in the in box by the time you took it over? A. Yes, it was. Q. And it's from Dread Pirate Roberts, and who is it to? A. It was sent to the other staff support administrators and also the account that I took over. Q. It was sent to cirrus? A. Yes. Q. And the other usernames were -- MR. TURNER: Could you blow that up Mr. Evert? A. It was samesamebutdifferent, inigo and libertas. Q. Okay. And it says hey, gang, we have a new moderator going by the name cirrus. We used to know him as scout. Cirrus has always been dedicated to our common goals and the community at large and we put what happened surrounding Mr. Wonderful behind us so he can come back onto the team. The scout persona is still off limits and should not be discussed, so we'll always refer to cirrus as cirrus, even though we know the same person is behind both accounts. And then it says -- there was a reply from cirrus. Is this by you or the person who previously controlled the account? Page 268 A. No. It was by the person who previously controlled the account. Q. It says thank you for the introduction! I'm really excited to be back and working with you guys. Missed you all! So you said these other individuals -- other usernames here samesamebutdifferent, inigo and libertas, were they also support staff members? A. Each of them did different roles within the forum and the marketplace, but they were all part of the support staff. Q. And it says that we have a new moderator going by the name cirrus. Did you actually start performing the duties of a moderator after you took over the cirrus account? A. Yes, I did. Q. Could you explain what those duties were and what you spent most of your time doing. A. So, as a moderator over the forums, it would be basically trying to keep the forum clean in the way that DPR wanted it to be. Q. Clean how? A. Clean in that making sure that posts that were new threads that were in certain subforums were moved to the appropriate subforums. So if someone posted something about security in the main discussion forum, I would move it to the security forum. Page 269 Q. When you say clean, you mean organized? A. Organized; yes. Q. Okay. A. As well as if there was something that was posted, such as they call it spam where a -- either a computer or some other person might be posting messages on the forum that was advertising or trying to put a lot of things on there that was unrelated to Silk Road, we would be, as moderator, responsible for removing those posts and deleting them. Q. What other things? A. In addition, answering customer support issues and there's a customer support forum that was at the bottom of the forums. And so, Dread Pirate Roberts wanted support staff and the moderators to respond to every one of those support threads that were on there. Q. So what were some of the comment -- support questions you answered? A. A lot of the support questions I'd answer would be things about how do I get to the site or how do I get help with this or this vendor didn't help me or didn't get my product or my bitcoins didn't show up in my account, how long should I wait, those types of questions. Q. How many hours a day would you spend working undercover as a Silk Road moderator when you took over the account? Page 270 A. Anywhere from ten to 12. Q. Ten to 12 hours? A. A day. Q. Were you paid as part of your position? A. Yes, I was. Q. By the hour or the week? What? A. By the week. Q. What was your salary? A. Salary was paid in bitcoins, and it was roughly about a thousand dollars a week. Q. And who paid you? A. It was Dread Pirate Roberts. Q. How would you receive payment? A. It would be sent to my market account that I had, so it would be credited from the admin to my account from Dread Pirate Roberts. Q. When you say the market account, you mean the Silk Road marketplace? A. Yes. Q. Can you take a look at Government Exhibit 126C. A. Okay. Q. Do you recognize this document? A. I do. Q. How do you recognize it? Page 271 A. It's a screen shot that I took of the account history page from my undercover account. I took it on September 26, 2013. MR. TURNER: The government offers 126C into evidence, your Honor. MR. DRATEL: The same objection, your Honor, as previously stated. THE COURT: GX 126C is received. *(Government's Exhibit 126C received in evidence)* MR. TURNER: Publish it, Mr. Evert. Q. What are we looking at here? Which account is this? A. This is my cirrus account. Q. Where is that reflected? A. Up in the upper right-hand corner. Q. What's on the left side? A. On the left-hand side, it's just the account history summary. So this would be a roughly a two-month history of the account of what it received. Q. So where is -- can you just point us to a sample payment of your salary. A. So the most recent payment that was received in the account on this history page would have been the one at the very top where the action came from admin. And in the notes, that number there is the user number that's for Dread Pirate Roberts that I recall. And the amount shows that I got transferred from admin eight bitcoins and that the balance in my account was eight bitcoins. Page 272 Q. How much was eight bitcoins worth at that point? A. It was about, like, $120 a bitcoin or so at that point. Q. So how much in total? A thousand dollars? A. Roughly, yeah, like a thousand dollars. Q. And beyond just knowing the user number there corresponding with Dread Pirate Roberts, how else would you know that Dread Pirate Roberts was the one sending you this salary payment? A. Some of the times when I received these, I would send a reply on the forum to Dread Pirate Roberts telling him thank you for the payment and he'd reply back you're welcome or something to that effect. Q. Can you take a look at Government Exhibit 126D, please. Do you recognize this exhibit? A. Yes, I do. Q. How do you recognize it? A. This is one of the private messages that I sent from my cirrus account on the forums to Dread Pirate Roberts. MR. TURNER: The government offers 126D into evidence. MR. DRATEL: The same objection. THE COURT: All right. Government Exhibit 126D is received. *(Government's Exhibit 126D received in evidence)* Q. Going down to the first message down at the bottom it says from you to Dread Pirate Roberts, right? Page 273 A. That's correct. Q. August 9, 2013, thanks for the bitcoins. And then the reply is you're welcome! Thanks for looking after the forums. As a moderator, did you have any access to parts of the site that ordinary users couldn't see? A. I did. Q. Like what? A. There were restricted forums that were -- that I was able to see, such as a vendor roundtable forum and there was also a recycle bin that I could see. Q. Did you have any permissions and abilities that ordinary users didn't have? A. Yes, I did. I had -- on the forums, I had administrative rights, unlimited administrative rights that I could search for different users and search through the databases that we had of users, that wasn't something openly available as a general user, as well as the ability to edit, delete and move threads and posts on the forum. Q. Were there any limits on your administrative powers? A. Yes, there were. Q. How do you know? A. Because just knowing that there was other features that I couldn't access within the admin panels and there was areas that I couldn't see that from discussing it with other people such as Dread Pirate Roberts would tell me that there's other things that's available basically. Page 274 Q. So who set the restrictions on your abilities, your administrative powers? A. Dread Pirate Roberts. MR. TURNER: Going back to 126A, can you bring that back up, Mr. Evert. Q. This message is from samesamebutdifferent, inigo and libertas, do you know what the roles of these users was on the site? A. Yes, I do go. Q. Beyond what you've already told us? A. Yes. Would you like me to go into that? Q. Yes. But you know what, let me go back to one thing before we leave the bitcoin payments. What did you do with the bitcoins you received as salary as an administrator? A. Back on the history page, you'll see that after every time we received a payment from bitcoins -- MR. TURNER: 126C, Mr. Evert. A. After every payment was received, withdraw it either the next day or the same day of, as soon as we could, and withdraw it to another undercover bitcoin wallet and then also transfer that, then, to an exchange that was also registered with an undercover account where we would convert the bitcoins into dollars and then seize them. Page 275 Q. So what agency did the bitcoins or the dollars from the bitcoins ultimately end up with? A. With HSI. Q. So let's go back again to 126A. You were about to say -- what were the roles of inigo, libertas and samesamebutdifferent on the site and how do you know? A. Samesamebutdifferent was a -- primarily a forum moderator for a little bit. He did have access over the marketplaces and admin, but that didn't last long. Instead, he focused primarily on trying to answer customer support tickets or customer support issues in the forum. Q. How do you know this? A. Because from talking to samesamebutdifferent as well as sending a lot of private messages between himself and I, we would split the work that was done because he was located in Australia, I was located in Chicago, and there were times that generally I'd be asleep, he would cover the customer support and vice versa. Q. And how about inigo? A. With inigo, inigo was primarily over vendor support on the marketplace, also had administrative capabilities on the forums. Q. What do you mean by vendor support? A. Vendor support was a feature of support that was available to vendors that they could contact vendor support if they had an issue that they needed to resolve. Page 276 Q. Like what? A. Such as like an order that a buyer hadn't paid them for or an order where there was a problem with the listings or a problem with a withdrawal that the vendor needed help with, they would give more priority to the vendors. MR. DRATEL: Object just on grounds with respect to forum violation. THE COURT: Hold on one second. Let me just read the answer. What's the basis for that answer that you just gave about the vendor support? THE WITNESS: It was through my direct chats that I had had with inigo. THE COURT: All right. I will allow it. When you reach a logical breaking point, I know it's a little early, but there are a couple of things I just want to go over so it will be good to take it a few minutes early if we can. MR. TURNER: Three more minutes, your Honor. THE COURT: Sure. Q. So inigo was in charge of vendor support. How about libertas? A. But also going back to inigo, in addition to vendor support, he also had access to customer support, which is just, again, the same thing but for customers. Page 277 Q. Buyers? By customers you mean buyers? A. Yes. So he would do a little bit of both. And then libertas was also customer support primarily on the marketplace, so he would handle the tickets that would come in for customer support on the market and respond to those and would sometimes also cover some of the duties of vendor support. Q. Did you know whether the other members of the support staff were paid like you were? A. Yes, they were. Q. How do you know? A. From direct chats with them. Sometimes when I wasn't paid, either when we were expecting to get paid, my conversations with them would also reflect that they didn't get paid, too, and they were telling me they didn't get paid. Q. Samesamebutdifferent, did he have any other nicknames? A. He did. Q. What were they? A. He also went by, for short while, symmetry, which was his administrative name on the marketplace; and then also had batman73, which was his account that he used primarily on the market; and he was also commonly referred to as SSBD, which is short for samesamebutdifferent. MR. TURNER: Your Honor, I can stop there. Page 278 THE COURT: Let's take our mid-afternoon break. Ladies and gentlemen, we'll take about 15 minutes, and then we'll resume. We'll go then until just a couple minutes before 5:00. Thank you. I want to remind you not to talk to anybody about this case, including each other. Thank you. THE DEPUTY CLERK: All rise. *(Jury excused)* *(Continued on next page)* Page 279 THE COURT: Why don't you step down and take a break as well. *(Witness temporarily excused)* THE COURT: Let's all be seated. I wanted to go over on the record the basis for a number of my rulings because the record I think is developing and I want to make sure that the record is clear as to the basis for the ruling. Now, let's go back to the government exhibits. These are all government exhibits that I'm talking about so they all begin with the prefix GX. But for a number of them, there are portions of what we have just been going over that are not offered for the truth, but there are some portions which are offered for the truth. Sometimes it might just be a snippet. So we'll go over a couple of those in terms of where they would fall within the hearsay rule. I would note that for the Vayner objections, I have found specifically as the government had proffered pretrial, that there has been a sufficient foundation laid and authenticity for the various documents through this witness who has personal, firsthand knowledge and has now laid an appropriate evidentiary foundation. So the Vayner objections are overruled. Starting with 125B and let's go through a couple of these. While the government had said in the pretrial materials I think that this was -- let's make sure that I've got the right one, see response to 125A, which puts us back to 123 -- which is that Vayner is inapposite and not offered for truth. Page 280 I think that 125B, there's a portion of it which could be considered as being offered for the truth, which is the portion and only the portion "I am Silk Road, the market, the person, the enterprise, the everything," to the extent that is offered for the truth, these, and there are a series of them, would come in under 803 as a business record relating to Silk Road or 801, subject to connection ultimately, because the ultimate factual issue as to who this is is to be determined, but based upon the government's theory, it would be 803 and 801. That actually is the same for a number of these exhibits. Now, for Government Exhibit GX 133, this is another one where there had not been an objection previously noted, and part of the reason for that is because it wasn't on the original pretrial order. So I just wanted to make sure that we had noted for the record, Mr. Dratel, what your objection is. Obviously -- well, I won't say "obviously" anything. Why don't you tell me what the basis for your objection is for GX 133? MR. DRATEL: It's hearsay. And also with respect to the business record aspect of this, there hasn't been a witness in this -- and I don't think this witness has done it at all -- which is to lay the foundation of business records in the context of contemporaneous record-keeping, verifiable. This is all coming after-the-fact. These are all posts and other things that he's coming in a year, a year or two later. I don't think that it meets the criteria for a business record, and 133 would qualify in the same way as well. Page 281 THE COURT: I have a response, but why don't I give the government an opportunity to address that if they choose to do so. MR. TURNER: We can lay a foundation. He used the forum extensively and could explain every time he posted a message, it would show up on the forums with the characteristics that have been displayed in the various exhibits. But we do think these are all, most of them are not really offered for the truth. They're just things that DPR did that show his leadership role over the site. As your Honor pointed out, to the extent they do reflect statements offered for the truth, they're party admissions we would argue. THE COURT: That would be under the other portion of the rule and some of them are under 801. Let me also, in addition to the government's response which I would agree in terms of the hearsay, I would make the additional points that as custodians of records for purposes of 803 business records are often custodians who come into business records after-the-fact, and the question is whether or not the particular business appears to have been run in all ways and in a similar fashion. Page 282 Here, this individual who is testifying based upon firsthand knowledge is also testifying based upon being an undercover albeit, but a staff member of the very business here. It's as if he went into a brick and mortar business and was working as a customer service representative in a brick and mortar business answering a telephone. Instead, he's at a computer screen. In any event, it's, as I said, subject to connection ultimately in terms of the admission of Dread Pirate Roberts because we have to connect that if the government does at all through the testimony and other evidence to come. As we know, the Court's evidentiary rulings are not on the same -- they don't have the same burdens as a criminal verdict would. It's not a beyond-a-reasonable-doubt standard; it's a preponderance of the evidence and/or, for certain rulings, just whether or not it's supportive, more supportive than other inferences. So the Court does find for purposes at this point that there's a sufficient basis. But let me go through a couple of the others because there are a number of these: 125D was not offered for the truth. That's about maintenance, and it doesn't really matter what was, in fact, happening, whether these maintenance issues, in fact, occurred or did not occur, so it's not a hearsay issue at all. As to the Vayner issues there, that is, I have overruled the Vayner issue as to all of these documents. Page 283 In terms of 125H, there is a possibility and, indeed, I would suggest that the way the questions came out, the government was asserting that the forgeries were for the truth. 125H, to the extent forgeries is offered for the truth, that falls under the business record and issue that I just talked about. In terms of GX 125J relating to commissions, the government has discussed the fact of commissions as being among the points it's intending to make at this trial; therefore, to the extent that any of it is offered for truth, there's not quite a clear statement saying "I take commissions," but that's the overall inference of that entire piece. That would be a business record. 126C, that's a business record of salary of Silk Road administrators. 126D is not for the truth. 125K is not for the truth. 125G is not for the truth in the sense that it's not being necessarily offered for whether or not Dread Pirate Roberts receives reports from his reps, but to the extent it is, it would be a business record subject to connection. 125L is in part offered for the truth. That's the statement about leading an international narcotics organization, as well as the time frame of having been at it for over a year. 125L would fall under 801 or 803, those portions which are potentially in fact offered for the truth there. There is a lot of 125L that is not offered for the truth. Page 284 In terms of 126A, that is, in large part, a coconspirator statement. 126A was drafted, as I understand it, by an administrator of Silk Road prior to the time that the witness on the standard, Mr. Der-Yeghiayan, had actually taken over; therefore, it would have been between two individuals working on Silk Road and it would therefore fall under the coconspirator statement, as well as dealing with administrative matters and therefore being a business record. So to the extent that any portion of that is for the truth, it's not clear that any of it is, it's really for the fact that it was said, it would fall under those exceptions and provisions. Those are, I think, give you a sense as to the rulings. They're all of the same type. So if I have missed one, I think it's relatively straightforward to understand based upon those rulings the similar bucket that it would fall under. Is there anything that you folks wanted to raise or to further comment on? No, your Honor. MR. DRATEL: Just a couple of things, your Honor. Obviously, we preserve our objection on that regard. THE COURT: Yes. MR. DRATEL: A couple of things, one is 125A. I think I mistakenly said no objection, and we had previously objected to that and I would like to reassert that objection. Page 285 THE COURT: Let me just doublecheck. All right. You did have an objection on the pretrial order. Does the government have a view as to Mr. Dratel's assertion now and objection that he otherwise had waived? MR. TURNER: I think it's of the same character as the exhibits that your Honor just covered. It's not really offered for the truth. It's just offered to show -- to reflect, it's an exhibit that reflects DPR's control over the infrastructure on Silk Road. THE COURT: There were two objections for 125A set forth on the pretrial order. One was a Vayner objection. For the same reasons that I have already described with respect to the other Vayner objections, that objection is overruled. I agree with counsel that 125A is not offered for the truth; it's about the fact that these words were said. There are not particular factual assertions within them and therefore it would not be considered hearsay and falls outside of the hearsay rules. Was there something else, Mr. Dratel? MR. DRATEL: Yes, two things that are related: One is that, and I'm not saying this was intentional, but Mr. Turner did, in reading, missed some words and misread a couple of times. Remind the jury that it's what's written there and not what counsel said, not so much to cast aspersions, but really it's just about when you read long blocks of texts, sometimes that happens. Page 286 The other issue on the reading is there was some inflection of particular words, the word physics. So I just think that that is not necessary obviously. And that's one of the problems with the whole issue of reading versus reading aloud and there was an emoticon on one of those which wasn't referred to at all, so I hope the jury was reading it. They should be instructed they should be reading what's on the screen. THE COURT: I can refer them, if you want me to, to the emoticons and be sure that they follow them for each of the documents. Do you want me to do that? MR. DRATEL: I think they should be instructed that they should be reading along when someone is reading it out loud because there may be symbols or other nonverbals, and the way chats are written -- THE COURT: I'll draw their attention to the symbols because of the consistency over time with the symbols. Do you want me to do that? MR. DRATEL: I just would like the Court to just -- THE COURT: I'll give them an instruction -- MR. DRATEL: Instruct them that they should be reading because these were originally written. And while they're being read aloud as an aid, the fact is, the written word is the real evidence. And occasionally counsel will make mistakes or misread, not intentionally again, but they should be looking at it and there may also be nonverbal symbols and things like that that they should be looking for and recognize. Page 287 THE COURT: Mr. Turner, do you have any objection to the Court giving that kind of instruction? MR. TURNER: No, your Honor. Two things: If counsel wants to make a correction if I've slipped up after I'm done reading a paragraph, I have no problem with that. I'm certainly not infallible. And I'm happy to say "smiley face" if there's an emoticon like that on the screen if counsel would like that read into the record. I didn't do that just because I thought counsel had an objection to doing that. THE COURT: Do you want, Mr. Dratel, for counsel to pull out the emoticons specifically when they appear or just to leave it after I have given my general instruction? MR. DRATEL: I think if someone is reading something aloud, they should say there's an emoticon, and let the jury decide what it means rather than characterizing it. THE COURT: All right. I think that's what we'll do. So I'll give that instruction and make some comments consistent with our conversation just now. Is there anything else that you folks would like to go over? MR. TURNER: No. MR. DRATEL: Just a cautionary about the emphasis issue. Page 288 THE COURT: Yes. I think with physics, it was more of what I would call a pregnant pause. It was only a nanosecond, but I understand. So to the extent, Mr. Turner, you can avoid anything like that, that would be helpful so that we don't run into any other issues. MR. TURNER: Yes. THE COURT: Anything else? MR. DRATEL: I think that's it. MR. TURNER: Yes. THE COURT: Let's take our own very brief break now that we have already taken 15 minutes and come back to get the jury out here. THE DEPUTY CLERK: All rise. *(Recess)* *(Continued on next page)* Page 289 *(Jury not present)* THE COURT: On the prior -- can you pull that door closed? There we are. On the prior evidentiary rulings, I had talked about the Commission document -- which one was it, do you folks remember? I can find it. 125J. MR. DRATEL: It is 125J, yes. THE COURT: OK. No, I don't need to add anything other than what I have already said. OK. Joe, why don't you get the jury. THE CLERK: OK. *(Continued on next page)* Page 290 THE CLERK: All rise as the jury enters. *(Jury present)* THE COURT: All right. Ladies and gentlemen, as you get to your seats, let's all be seated. All right. Mr. Turner, you may proceed, sir. MR. TURNER: Thank you. MR. TURNER Q. Agent Der-Yeghiayan, the whole time while you were working as a moderator in an undercover capacity, who was your boss? A. Dread Pirate Roberts. Q. And in what way was Dread Pirate Roberts your boss? A. He would be the one that paid me. He would be the one that would grant me new authorities on the website. He would be the one that would give direction and make the final say on a lot of either issues we would bring up, or if there was a discrepancy or an error or something with the site, we would bring it up with him to fix. Q. And was he the boss over the rest of the support staff, too? A. Yes. Q. How do you know? A. Because whenever I would bring up an issue or discuss something with other support staff, it would always be deferred to Dread Pirate Roberts, or it would be decided by Dread Pirate Roberts in front of all the rest of the support staff, too. Page 291 Q. And by "in front of," what do you mean? A. In conversation, that would be sort of like the private message that you would see between all the moderators and staff. Q. And when Dread Pirate Roberts would communicate with you directly, how would he do so? Through what system? A. He would -- there was a -- it was referred to as staff chat that he set up, and it was a live chat server that he set up on Tor that would allow the staff to communicate in a live-like manner. Q. So let's back up. We've already seen private messages between you and Dread Pirate Roberts, right? A. Yes. Q. On the Silk Road forum? A. Yes. Q. Are you talking about something different now? A. There is private messaging on the marketplace. There is private messaging on the forums, and then, yes, this is something different that we referred to as staff chat. Q. Is staff chat a part of Silk Road or was it something separate? A. It was completely separate from Silk Road. Q. When you -- well, was it -- did it involve chatting over the ordinary Internet or was it chatting over Tor? A. It was still a Tor hidden service but it was still a tor.onion address. Page 292 Q. How did you know how to set up this ability to communicate with DPR through the Tor chat system? A. The instructions that were provided by DPR to the original operator of the account that I took over was in private message. So I was able to set up the same configuration on my computer to have that type of chat capabilities. Q. Could you take a look at Government Exhibit 127. Do you recognize this document? A. I do. Q. How do you recognize it? A. It was a screenshot that I took on September 30, 2013 of a private message that was in the Cirrus account that I was operating. Q. When you say it was in there, was this a private message that was already in the Cirrus in box by the time you took the account over? A. Yes. MR. TURNER: The government offers Exhibit 127 into evidence, your Honor? MR. DRATEL: Objection. Hearsay, your Honor. THE COURT: GX-127 is received. *(Government's Exhibit 127 received in evidence)* THE COURT: Now, are you going to read from that document? Page 293 MR. TURNER: I am partially, your Honor. THE COURT: All right. So let me just -- I meant to just mention to the ladies and gentlemen of the jury a couple of things about documents. When you hear the Court receive a document into evidence, it is the document that is the evidence. Counsel may read things, parts of it, but if the entire document is in evidence, it is the document in evidence. So, for instance, if a word gets skipped over, "it" or, you know, some word is skipped over, it is the document that is actually in evidence and the text on the page. Similarly, you have seen in a couple of these documents that there are emoticons, and so you should note that and that is part of the evidence of the document. So you can note whatever nonverbal statements may be made on the page in terms of punctuation and things of that nature. All right. You can go ahead and proceed, Mr. Turner. MR. TURNER: Thank you. Can you publish Exhibit 127, Mr. Evert. Could you zero in on the -- whoops -- the bottom message, please, down a third of the way. That is good. Q. So this was a message sent from Dread Pirate Roberts to Cirrus on July 20, 2013. This is about a week before you took over the account? Page 294 A. That is correct. Q. It says: "Hey, we are all on a more secure chat channel. Here are the instructions for joining in: "1. Download and install Pidgin." Do you know what "Pidgin" refers to? A. Yes. It's a program that you could use to do Internet chat. Q. Would you go down, please. And then, 13, it says: "Add buddy 'dread@'" and then there is a long string of text ".onion. If I'm online we'll connect. There are a few more steps to finalize OTR, but those can be done once we're chatting." What does "add buddy" mean in this context? A. Add buddy would be like adding a favorite or a friend to your account, someone you could easily connect to. Q. Could you just explain generally what is like Internet chat and how does it compare to like private messages that we had been looking at? A. Private message would be similar sort of to I guess email where you would send a message, wait for a reply. That person could reply whenever they are back online, they would see the message. Whereas, Internet chat would be something where both users are online at the same time and they communicate in realtime in the same like box in front of you. Q. And "box," you mean like window? Page 295 A. Yes. The window box, yes. Q. So did you -- I'm sorry, could you go back to 127, Mr. Evert. Could you go up to Cirrus' reply. This reply was sent July 20, the same day. "I'll get it set up ASAP. Using Adium on Mac, which has a few other fields, so it'll take a short bit of trial and error. Be there when I can!" What does Adium refer to? A. Adium is similar to Pidgin, which is another program you can use to do Internet chat. Q. What kind of computer were you using in your undercover capacity? A. It was a MacBook. Q. So what program did you install to chat with Dread Pirate Roberts? A. I used Adium as well. Q. So once you got the program set up, how often would you chat with DPR? A. It would be probably every few days or so. Sometimes it might be a week before I would chat again with him. Q. How did DPR initiate a chat with you? A. DPR would be able to see since -- I would be able to see if he was online because I would buddy him and it would notify me when he was online or available to chat. And the same thing; he would see if I was online and available to chat, too. So you just simply have to click on the user's name and you could then initiate a chat with them. Page 296 Q. Could you take a look at Government Exhibit 127A. A. OK. Q. Do you recognize this exhibit? A. Yes, I do. Q. How do you recognize it? A. It is a screenshot I took of my entire computer screen. Q. On what date? A. I took this on September 22, 2013. Q. And what does the computer screen reflect? A. It is everything available on the screen that I could see. It is not just the window that I normally take a screenshot of. Q. Does it include the chat window we had been discussing? A. Yes, it does. MR. TURNER: The government offers 127A into evidence, your Honor. MR. DRATEL: The previously stated objection, your Honor. THE COURT: Overruled. GX127A is received. *(Government's Exhibit 127A received in evidence)* MR. TURNER Q. So what are we looking at here? A. So this is -- in the background I have the Silk Road forum up on Dread Pirate Roberts' profile page. Page 297 Q. That we have seen before, right? A. Yes. Q. So where is the chat window? A. So on the right-hand side it's -- that's the chat that I opened up the profile in the chat box for Dread Pirate Roberts. So that shows what his profile looked like in the staff chat. And then on the left-hand side it is sort of hard to see, it was transparent but it was the buddy list that I had on my staff chat which I had the people that I had buddied, which is the other staff from Silk Road. Q. So you could speak to those other staff members that you talked about earlier? A. Yes. Q. Inigo, libertas and samesamebutdifferent? A. Yes. Q. Could you back out. OK. The different times that appear on this screen, could you focus in on this side of the screen, Mr. Evert. Up top it says 3:23 a.m. What time zone is that set to? A. My computer, I had it set for UTC time. Q. Universal Time? A. For the universal time, yes. Q. That is Greenwich Mean Time, like you mentioned before? Page 298 A. Yes. Q. Then in the chat window here, local time, 20:23:05, what does that refer to? A. That refers to whenever Dread Pirate Roberts would be online, it would show what the local time is for him, and as I understand it, that would be what time was on their computer. Q. And what time zone was that reflected in? A. That would be Pacific Standard -- Pacific Time. Q. Did you set that to Pacific Standard Time, or is that the way it automatically appeared? A. That is the way it automatically appeared every time you login. Q. When you chatted with people in other time zones, what time zones did it appear in? MR. DRATEL: Objection. THE COURT: Why don't you rephrase that. MR. TURNER Q. Would you talk to other staff members through chat? A. I would. Q. How would their time zones appear? A. So when I would talk to samesamebutdifferent, I knew he was in Australia. He would tell me he was in Australia. It would reflect a time zone in Australia. And the same thing with inigo, through the course of the investigation we believed that he might have been East Coast, and it was actually showing an East Coast time zone. Page 299 Q. Throughout the time when you chatted with DPR through the system, what time zone was shown when you chatted with him or for his local time entry? A. Every time I chatted with him it would show Pacific Time Zone. Q. Now, how could you tell from this window when DPR was online and available for chat? A. From this one, it would say the status. This one would tell you if he is available or if he was away or if he was offline. Q. OK. Here it is. When you chatted with DPR, how, if at all, did you document the chats? A. It would be saved in the Adium program. There is a transcript that it would run automatically in the background and log the entire chat. Q. Is there a common term used for those transcripts? A. The transcript log. Q. Is it a log? A. A log. Q. OK. Did DPR know that you were logging these chats? A. I think he did not. Q. Should you -- I mean, I'm sorry. Could you take a look at Government Exhibit 127B, please? A. OK. Page 300 Q. Do you recognize this exhibit? A. I do. Q. How do you recognize it? A. It's a copy of the chat log that I had between myself and Dread Pirate Roberts on July 29, 2013. MR. TURNER: The government offers Government Exhibit 127B into evidence, your Honor. MR. DRATEL: The same objection, your Honor, as previously stated. THE COURT: All right. Overruled. And 127B is received. *(Government's Exhibit 127B received in evidence)* MR. TURNER: Could you include the date up at the top, Mr. Evert. Q. So where is the date notated? A. Up above. Q. July 29, 2013. And could you explain how to read these chat logs? A. Sure. So each time that a user would post a message, it would be in a different color. Mine was in green in this instance with Cirrus, and then Dread would be in blue. And basically it would annotate the time that you would send the message as well as what was said, and it basically goes from oldest to newest. Q. OK. So it starts oldest at the top and then it goes down from there? Page 301 A. It works down, yes. Q. And, again, the time, what time zone is it reflected in? A. This would be UTC time. Q. And your communications are green in Cirrus and Dread is Dread Pirate Roberts? A. Dread is Dread Pirate Roberts. Q. OK. So I will read it. It is starting at 6:11 p.m. Cirrus says: Sorry, my Internet has been crappy today. Dread: No worries. Cirrus: What's going on? Dread: I had a little task but inigo is on it. Cirrus: I'm sorry, if you have anything else don't hesitate to ask. Dread: no worries, I will Cirrus: I don't know if you saw on the tech forum there were a few people reporting errors being received when trying to enter in their pin while moving bitcoins? Dread: didn't see Dread: recent? Cirrus: yes, let me send you the link Dread: I actually just moved btc from one SR acct to another without problem. Cirrus: okay, well here is the thread…. probably just isolated stupidity. Page 302 And then there is some link there. So, briefly, can you explain what this conversation was about? A. This was Dread had previously sent me a message asking for me to chat with him on the staff chat and so I wasn't online at the time. So I got online. As soon as I saw it, I got on the staff chat and I sent him that message asking him what he needed from me. I think he told me he had a task originally for me. Q. Could you take a look at Government Exhibit 127C. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It was another chat that happened between myself and Dread Pirate Roberts on August 19, 2013, using the staff chat. MR. TURNER: The government offers Exhibit 127C into evidence. MR. DRATEL: Objection on the previous grounds, your Honor. THE COURT: All right. 127C is received. The objection is overruled. *(Government's Exhibit 127C received in evidence)* MR. TURNER: Could you zoom in on the top third of the document, Mr. Evert, including the date. Page 303 Q. So this is from August 19, 2013, right? A. In UTC, yes. Q. What is the chat about? Give me an overview. A. This was just a normal chat that we just started talking to Dread Pirate Roberts, and it goes into him giving me more access on the marketplace. Q. Did he show you anything in this chat online? A. Yes, he did. He had just recently set up a new feature on the marketplace which was a new messaging system that was on there. And he was granting me access to -- it was like a admin panel on the marketplace. So he was -- to help moderate those new posts that would be placed on the marketplace, so he was going to walk me through setting that up, set up my access, as well as describing how he wanted me to moderate that section of the marketplace. Q. By "moderate," do you mean keep it organized like you described before? A. Yes. Q. So let's take a look, starting at 1:06: Cirrus: Hey, how are you? Dread: I'm good, you? Cirrus: Doing okay, what's up? Dread: Sorry, can you hang tight 5-10 min? Cirrus: Of course. Smiley face. Dread: Ok... Page 304 Dread: Are you logged into SR? Dread: If you are, please log otu. Dread: Out. Cirrus: Okay. I'm out Dread: Now go to -- And then there is a link, and is that the Silk Road dot-onion website address? A. That is. Q. And then after that, it says "support/landing," right? A. Correct. Q. So now go to that address and enter your user and pass. Let me know what happens. Cirrus: OK, standby. Got invalid login. Disregard. I'm good. What was going on there? A. Once I went to that URL and with my account -- Q. What is a URL? A. I'm sorry. The address of the Silk Road that he put in this post here, the support landing page, there was two boxes on there that -- and he told me to enter in my username and password. So the first box I entered my username and the second box I entered my password and then hit "go" on it. Q. Were you having trouble at first? Page 305 A. At first, yeah. It wasn't working the first time I tried it, but then I realized that I think I hit in the password wrong. Q. Then it says: Dread, are you in this support panel. Cirrus: It's loading. OK, it loaded. At that point what came on to your screen? A. At that point a new page appeared that I had never seen before. It was a page that had various boxes on there that appeared that I could do a number of things or that you could search a number of things, just different options I had never seen from Silk Road before. Q. Could you take a look at Government Exhibit 127D. MR. TURNER: Mr. Evert, could you move that to the top of the screen. A. OK. Q. Do you recognize this document? A. I do. Q. How do you recognize it? A. This is a screenshot that I took of that support panel on August 19, 2013. MR. TURNER: The government offers 127D into evidence. MR. DRATEL: The same objection, your Honor, as I had previously stated. THE COURT: All right. There isn't one on the Pretrial Order. Page 306 MR. DRATEL: I'm sorry. I am looking at the wrong one. Hearsay, your Honor. THE COURT: All right. So that objection is overruled. 127D is received. *(Government's Exhibit 127D received in evidence)* MR. TURNER Q. OK. So this is the support screen that came up when you said, "OK, it loaded." A. Yes, it was. Q. And there are some boxes here. One says "Customer support." The other says "Vendor Support." Another says "Resolutions." And then there is "Vendors," "Items" and "Posts" over here. Do you see that? A. Yes. MR. TURNER: OK. Could you go back into the chat, Mr. Evert, and go down a little bit. Q. OK. The next line, it says: Dread: OK. Click on the number next to unread under customer support. Should say no access. MR. TURNER: Could you zoom in, Mr. Evert, in here. Nope. Over here. OK. Go back into the chat. All right. Q. Should say no access. Page 307 Cirrus: Yes, it does. Could you explain what was going on in the chat during this time? A. So as he instructed me to click on that number, which is the green number, in this case the 107 next to unread, when I clicked on it, I got the result that said that I had no access to that. MR. TURNER: Could you back out, Mr. Evert. Q. Now, the next line of the chat says: Now click vendors, top right. Should say no access. MR. TURNER: Could you zoom into this entire thing over here, Mr. Evert. Q. OK. Yep, same thing. So what happened next? A. Again, I clicked on the number next to "unread," which is the 39 in this case, and it came back also as no access. Q. Then it says -- the next line is: Dread: Now click posts. Should load a page. Cirrus: OK. I see it. So did you click on "posts" over here? A. I clicked on posts. Q. And what came up? A. When I clicked on posts, then it took me to another page that I had never seen before on Silk Road that was -- it was like -- it was a result of messages that were flagged in that new messaging system. Page 308 Q. Could you take a look at Government Exhibit 127E. A. OK. Q. Do you recognize this document? A. I do. Q. How do you recognize it? A. It is a screenshot that I took on August 19, 2013 of the flagged messages. MR. TURNER: The government offers 127E into evidence, your Honor. THE COURT: There is no objection noted, Mr. Dratel. Do you have an objection? MR. DRATEL: No, your Honor. THE COURT: All right. Received. *(Government's Exhibit 127E received in evidence)* MR. TURNER: Put it down to the bottom panel, Mr. Evert. Zoom in a little bit. That is good. Q. OK. So what did you see exactly? A. This is the page that I would have seen. Q. Well, let's keep reading, actually. Cirrus: OK, I see it. Dread: These are flagged posts from the new discussion boards. You're going to be our quality control expert on this. Cirrus: OK. Is this connected at all to the other forums? Page 309 Dread: No, it's all on SR. What was meant by "SR"? A. SR was generally the way we referred to the market. It would just be SR, Silk Road. Q. Cirrus: OK. Dread: You can now click discuss on items, vendors and categories. We're going to be pretty strict about what gets through. So if it's off topic or inflammatory, basically anything that isn't calm, polite, etc., and on topic gets pulled. Cirrus: That's easy enough. So a lot more strict than we handle the other -- go to page 2 -- the other forum? Dread: Yes. Cirrus: Who's the people on this? Dread: The forum is the backyard party. Cirrus: Anyone? Dread: This is the storefront. Cirrus: Alright. Dread: Right now as long as you've spent $100 or more you can post or if you are a vendor. Cirrus: I see, so this is the moderator functions for the discussions on the main site? Dread: Yep. Flagged posts go here. They are sorted by weight. Weight is the total weight of all the users who flagged it. Count is the number of users who've flagged the post. Page 310 Cirrus: So basically the discussions have to be related to the products, etc., and is not for random discussions or bitching. I got it Dread: Yes, that's right. What is going on here? What was this is flags page used for? A. This flag page was used to alert basically staff or myself if there is a message on a new post -- a message system that was inappropriate or shouldn't belong on the marketplace. Q. Can you take a look at Government Exhibit 127F. A. OK. Q. Do you recognize this document? A. I do. Q. How do you recognize it? A. It is a screenshot that I took from my account of the Silk Road marketplace of one of the vendors, that new discussion page that would be available, and I took it on August 29, 2013. MR. TURNER: The government offers 127F into evidence. MR. DRATEL: Hearsay, your Honor. THE COURT: That objection is overruled. 127F, as in Frank, is received. *(Government's Exhibit 127F received in evidence)* MR. TURNER: Could you exit out of this? That is fine, and then put that up top. All the way over. Page 311 Q. All right. So this is this new type of message board that was on the Silk Road marketplace? A. Yes. Q. And it was -- there would be a single board for each vendor on the marketplace? A. Yes. There would be a page like this attached to every vendor. Q. So who is the vendor here? A. The vendor in this case is supertrips. Q. And then people can just post a message on this page? A. Yes. So long as they met the requirements that DPR discussed in that previous chat. Q. If they had spent more than $100? A. Right, or they are another vendor. Q. Then to the side there is a little flag button? A. That would be where you would report as a user on the site a post such as this, and that would then reflect on that page on this support panel. Q. So if I am a user and I click on "flag," what happens to this support panel that we were looking at earlier? A. Then that message would be reported on the flag message page that we saw earlier. Q. OK. All right. So how long did you continue working as a moderator for the Dread Pirate Roberts? Page 312 A. From July -- late July 2013 to the time that we shut down the site. So October 1st, basically once we arrested the defendant. Q. When you first started working for DPR in an undercover capacity in July 2013, were you investigating the defendant, Ross Ulbricht, in any way at that time? A. No, I was not. Q. Had you ever heard of the defendant at that point? A. No, I had not. Q. When did the defendant, Ross Ulbricht, first come to your attention? A. It was approximately around September 10th, September 11th, 2013. Q. And who brought the defendant to your attention? A. It was Special Agent Gary Alford with the Internal Revenue Service. Q. And does Gary Alford work for any other federal agency? A. He was assigned -- I think he is still aside to the OCDETF Strike Force in New York, Organized Crime Division, I think, Task Force. Q. It is A drug task force? A. Essentially, yes. Q. So without telling me what Agent Alford told you about the defendant, how, if at all, did his information change the focus of your investigation? Page 313 A. The defendant that they brought out looked like a pretty good match potentially. Q. Who did you begin investigating after you received information from Gary Alford? A. Ross Ulbricht. Q. And at that point in time, September 2013, were you working in partnership with any other law enforcement agency personnel? A. I was. Q. Who were you working with? A. I was working with, in addition to Special Agent Gary Alford, I was working with an FBI separate group in New York. Q. Did the FBI also begin investigating the defendant as a result of Agent Alford's information? A. Yes, they were. Q. At some point did the FBI obtain a warrant for the defendant's arrest? A. Yes, they did. Q. Approximately when was that? A. It was sometime late September 2013. Q. And did you take part in the planning for that arrest? A. Yes, I did. Q. And what was the plan that was developed? A. The plan was to try to get in a position where we could have the defendant in a public setting, in a public place, such as an Internet cafe or somewhere where they would be required to use Internet and that we would be able to initiate a chat with them. Page 314 Q. Initiate a chat with who? A. With the defendant. Q. OK. In terms of -- let's see. So the plan was to observe Mr. Ulbricht -- MR. DRATEL: Objection, your Honor. Q. I just want to be clear. When you are talking about initiating a chat, who were you in a position to initiate a chat with? A. I was going to utilize my access to the staff chat with DPR to start a chat with DPR once -- if we could get Ross Ulbricht into an area where he would be in a public setting. Q. I just want to distinguish throughout this discussion the DPR you are seeing with any surveillance, physical surveillance of the defendant. Can you agree to do that? A. Yes. Q. OK. So what was the point of the plan? What was the purpose of planning the arrest that way? A. The purpose of that was to -- if indeed Ross Ulbricht was Dread Pirate Roberts, if I was to initiate a chat with him while I was in a public setting, that we would try to get his computer in a nonencrypted -- in an open state where we could then observe the same chat on his computer that I would be having with Dread Pirate Roberts. Page 315 Q. When you say "unencrypted," get the laptop in an unencrypted state, what do you mean? A. What I mean by that is if it's protected by a password, get in a place where he has already logged in with that password so that the computer is open then. Q. When you say "open," what do you mean? A. Open and all of the files are available that are on the computer. Q. What could cause a computer to lock up? A. Just by shutting it down, just by closing -- if it is a laptop, by closing the lid, by -- you could set up other type of triggers that could cause it to then turn on the password. So there could be hot keys you could set up that could turn it on, or you could actually just click shut down on it as well. Q. So where was the defendant living at this time? A. In San Francisco, California. Q. Where did the defendant's arrest take place? A. In San Francisco, California, at the Glen Park library. Q. Glen Park is a suburb or a part of San Francisco? A. I believe so. I'm not sure, though. MR. DRATEL: Objection. MR. TURNER: Withdrawn. Q. On what date, again, did the arrest take place? A. The arrest took place on October 1, 2013. Q. And approximately what time of day did the arrest occur? Page 316 A. It occurred around like 3 p.m., 3:15-ish. Q. When did you arrive in San Francisco for the arrest? A. I arrived September 30, 2013. Q. The day before? A. The day before. Q. And in October 1st, 2013, where did you go to meet the arrest team? A. That day, around -- probably around noontime Pacific Time I met up with the rest of the arrest team a few blocks away from Mr. Ulbricht's home. Q. Why were you told to -- where did you meet specifically? A. It was the Bello -- it was right outside the Bello Cafe. It was an Internet cafe that was there. Q. Why were you told to go there? A. That's where the team was assembling. Q. Do you know why they were assembled there? A. It was far away enough from the home where we were not -- if we were going to be seen in a group together, that might be unusual or to try to -- it might gain his attention. And, also, that area was somewhere where he was observed the day beforehand in a public Internet cafe on his computer. Q. And how many members of the arrest team were there, approximately, do you know, roughly? A. There might have been five or six at the time. Q. Were the people in plainclothes or official law enforcement gear, or what? Page 317 A. They were -- everyone was in street clothes that day. Q. Did you see everybody there with you, or were they spread out in the area? A. I didn't know everyone that was there that day. They were spread out in different locations. There was people in different cafes up and down the area. Q. Was the plan definitely to arrest him that day, or was there flexibility built into the plan? A. There was flexibility. I mean, there was -- Q. What was the contingent on in terms of the decision to arrest him that day? A. Based upon the previous day and seeing him in the cafe, we decided that it would be better to try to see if -- return to that same cafe and use his computer as well so I could initiate the chat on that day. If he hadn't gone anywhere that day, then we would wait until the next day or even the day later. Q. What ability did you have to monitor whether the Dread Pirate Roberts was online at the time you were in this area setting up the arrest? A. I had my laptop computer on me the entire day. Pretty much had it on almost 24 hours at that point, and I was connected to the Internet using a mobile hot spot that was with me. So I had my laptop with me and my Internet connection that I could take with me anywhere. Page 318 Q. And so how were you monitoring him, DPR? A. Through the staff chat primarily because -- and the forum as well. The forum would show when he was online, and the staff chat would tell me, too, if he was online. Q. Can you take a look at Government Exhibit 128A? A. OK. Q. Do you recognize this document? A. I do. Q. What is it? A. It is an overview of the area where the arrest took place around the Glen Park library. Q. And based on your experience there, can you say whether the map fairly and accurately depicts the area surrounding the place of arrest? A. Yes, it does. MR. TURNER: The government offers Exhibit 128A into evidence. MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 128A received in evidence)* Q. Could you point with your laser pointer? Do you still have it up there? A. Yes. Q. Where did you go to initially set up for the arrest? A. OK. So this is the Cafe Bello, and we were standing primarily most of the time around that corner right there. Page 319 Q. Which corner? A. I'm sorry. Right on the edge, right there in front of Cafe Bello, which is right next to the Glen Park library. Q. When you say "we," who were you with? A. I was with a computer specialist from FBI Tom Kiernan as well as Special Agent Chris Tarbell of the FBI. Q. And Kiernan, K-i-e-r-n-a-n, is that how you spell that? A. I believe so. Q. So approximately when did you arrive in that area? A. Around like later in the afternoon, so like around 12:40, 1 o'clock p.m. Q. What happened next? What happened after you arrived? A. After I arrived, I was instructed to go to the cafe where I was the previous day and to wait there to see if he would show up during the day. Q. And did he? A. No, he did not. Q. And were you monitoring DPR's online activity during this time? A. Yes, I was. Q. What was the status of that? A. He was online at the time. DPR was online on the staff chat, and he remained online through the time that I was in that cafe. Page 320 Q. OK. So what happened next? A. The cafe closed around 2 p.m. and so I left there. I went back to -- or outside that Cafe Bello, in the same area. Q. Could you just make clear, you went to a different area in that cafe. Approximately where was that? A. It was down the street. It is not on the map. It is a little bit down from that -- Q. So you walked back to Cafe Bello and then what happens? A. So I was outside Cafe Bello for a little bit, and my computer was running low on power. So I went inside the Cafe Bello to charge my computer. It was around like 2/2:40 or so, like 2:45 p.m. At that time, or really close to that time, DPR also went offline on the staff chat so he signed off. Q. Did you take a screenshot of that? A. I did. Q. Could you take a look at Government Exhibit 129A. A. OK. Q. Do you recognize that? A. Yes, I do. Q. How do you recognize it? A. It is, again, a capture of my entire computer screen on my computer at that time on October 1, 2013. MR. TURNER: The government offers Exhibit 129A into evidence. MR. DRATEL: Just as I had previously stated, your Honor. Page 321 THE COURT: All right. The objection is overruled. 129A is received. *(Government's Exhibit 129A received in evidence)* MR. TURNER: Publish the exhibit, please, Mr. Evert. Could you zoom in on this area. Q. OK. Could you explain what is shown in the exhibit? A. So this is again that staff chat on Dread Pirate Roberts' profile, and I took the screenshot right after he signed off from the staff chat, which then it is reflected on there as saying signing off 16 seconds ago. Q. So it says 9:47 p.m. What time zone is that in? A. That one is UTC. Q. So I thought before you said that you saw DPR's time zone in Pacific Time? A. I did. Q. When would that happen? A. That was only when he was online and actually active online. When he would go offline, it would revert back to my time zone and into UTC. Q. So how many hours ahead was UTC compared to your local time in San Francisco? A. It was seven hours ahead. Q. So the actual local time was 2:47 p.m.? A. Yes. Page 322 MR. TURNER: OK. And back out, Mr. Evert. Q. You said your computer was low in power. Is that reflected anywhere? A. On the upper right-hand corner. I was at 18 percent. Q. OK. So you are in the Internet cafe, Cafe Bello, at this point? A. Yes. Q. What happens next? A. I then -- I'm charging my computer. It was hard to find someplace to charge. It was completely full inside the cafe. So I was off on the side and I found an outlet, and I was notified that Ulbricht had left his home and that he was headed in the direction of the cafe. And so I unplugged my computer and went out of the cafe and crossed the street to join up with computer scientist Tom Kiernan. Q. Could you take a look at 128B, please. Do you recognize this exhibit? A. 128B? Q. Yes. A. Yes, I do. Q. How do you recognize it? A. It's a photograph of San Francisco in the area we were at on the street, where the Cafe Bello is at as well as the area where I crossed the street that day. Q. Did you take this photograph? Page 323 A. No, I did not. Q. Does it fairly and accurately depict the area you were in at the time you were just describing? A. Yes, it does. MR. TURNER: The government moves Exhibit 128B into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 128B received in evidence)* Q. So what are we looking at here? A. On the left-hand side -- Q. You can use your laser pointer if it would help. A. Over here is the Cafe Bello. You see the door entrance to it. And as soon as I was notified that Mr. Ulbricht had left his home and was headed in this direction, I exited out of that door, went across the street to a bench similar to that, where Tom Kiernan was at, and I sat down beside him. Q. Do you know who Tom Kiernan is? A. The FBI computer scientist. Q. And what happened next? A. So I sat down on the bench, and I had my computer with me. It was still open. It was still on. At that time DPR was not online when I was sitting there, and I asked Tom if he knows where the person was at, where Ulbricht was at at the time. Page 324 Q. Without telling me what he said in response, keep going, what did you observe? A. Then so while I was sitting there, I looked to my right, which is at that -- this corner right here, and I then saw Mr. Ulbricht on the corner standing there and facing this direction over on this side, waiting for the light basically to turn so he could cross the street. Q. Did you -- was he alone or with others? A. He was by himself. Q. Was he carrying anything? A. Yes, he was. Q. What was he carrying? A. He had a small shoulder bag. Q. Where did you see him go? A. So the light turned so that he could cross the street. So he crossed the street, and then he proceeded to come up the street and entered the Cafe Bello. Q. What did you observe next? A. It was probably about 30 seconds later Mr. Ulbricht came back out of the Cafe Bello, looked to his right, and then proceeded down the street in that direction. Q. Had you just been in the Cafe Bello? A. I had. Q. Was it crowded? Page 325 A. It was. Q. All right. So what did you observe next? A. Mr. Ulbricht continued to -- after he turned -- after he exited out of the Cafe Bello, he turned right and then entered into the Glen Park library. Q. Could you take a look at Government Exhibit 128C. A. OK. Q. Do you recognize this photograph? A. I do. Q. How do you recognize it? A. It's a photograph of the Cafe Bello and the Glen Park library in San Francisco. MR. TURNER: Your Honor, we offer 128C into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 128C received in evidence)* Q. So what does this photo depict? A. This would be the entrance of the Cafe Bello, where I observed Mr. Ulbricht exit out and then turn to his right and then enter into this door right here, which is the Glen Park library. MR. TURNER: Your Honor, I probably have an hour of questioning left. I don't know if this might be a good point to stop. THE COURT: Let's go ahead and continue and go until a few minutes before 5, around 5 to 5. Page 326 Q. So during this time when you observed him walking on the street, go into the cafe, into the library, what was DPR's online status? A. He was still offline on the staff chat and the forum. Q. So what happened after you observed the defendant enter the library? A. And as soon as Mr. Ulbricht entered the library, the computer scientist Tom Kiernan let me in into the library as well. Special Agent Chris Tarbell, who had been walking down the street at the time, after he came and rejoined me by the bench where I was sitting. *(Continued on next page)* Page 327 MR. TURNER Q. So Tom Kiernan went in -- he followed Mr. Ulbricht into the library? A. He did. Q. What happened after that? A. After that, Special Agent Tarbell was giving out directions to the rest of the arrest team, telling them that. Q. How was he giving directions? A. Through email. Q. Were you on those email chains? A. Yes, I was. Q. Okay. A. The directions included make sure to pull the laptop first, then arrest, and he also said to make sure to give time for the UC, which is the undercover, which would be me, to chat with him once he logs on before anyone initiates arrest on him. Q. Was there -- were there any agents in the library? A. There were other people in there. I wasn't aware of all the people that were in the library. Q. Okay. So what happened after Mr. Ulbricht entered the library and those instructions were given? A. So not too long after, maybe a few minutes later or within a few minutes, Dread Pirate Roberts came online on the staff chat. And as soon as I saw him come online, I then initiated a chat with him, trying to ask him to go into a specific place on the Silk Road -- into the admin panel to log in to check something. Page 328 Q. How did you see him come online in the first place? A. It reflected on the staff chat. It showed that he was available. It showed that he was online. Q. Did you take a screen shot of that? A. I did. Q. Can you take a look at Government Exhibit 129B. Do you recognize this exhibit? A. I do. Q. How do you recognize it? A. It was, again, a screen shot of my entire screen at the time when Dread Pirate Roberts came online. MR. TURNER: The government offers 129B into evidence. MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 129B received in evidence)* MR. TURNER: Can you zoom in the same part of the screen as before, Mr. Evert. Q. The computer is up to 22 percent now? A. I got a little bit of juice. It didn't last very long. Yeah. Q. How does this reflect Dread Pirate Roberts coming online? A. On the profile it says the status turned to available and then the timezone turned back towards Pacific time. Page 329 Q. Just to make sure so we understand, it says 15:08:41. What does that mean? What sort of time is that? A. It's military time, so it would be the 15th hour of the day, so that would be 3:00 p.m. Q. So it's now 3:08 San Francisco time, correct? A. Yes. Q. So what did you do after you saw Dread Pirate Roberts online? A. I initiated a chat with him. Q. And did you take a screen shot of that chat? A. Yes, I did. Q. Or rather, did you make a log of that chat as we saw before? A. I did. Q. Can you take a look at Government Exhibit 129B. A. "B" as in boy? Q. Yes. 129C. Excuse me. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's the chat log that I had with Dread Pirate Roberts on October 1, 2013. MR. TURNER: The government offers 129C into evidence, your Honor. Page 330 THE COURT: 129C is received. Hearing nothing -- MR. DRATEL: I'm sorry. No objection. THE COURT: All right. Thank you. *(Government's Exhibit 129C received in evidence)* MR. TURNER: Can you zoom in to about here, Mr. Evert. Actually, I'm sorry, go out a little bit. Start here and go all the way down. Great. Q. There's an entry for exchanged status to offline, 9:47 p.m. Changed status to online, 10:08 p.m. Again, what does that reflect? A. As long as I'm still online and as long as my chat box that I have initiated with Dread Pirate Roberts is open, it will log every time he logs off and logs on. So this is reflecting that Dread Pirate Roberts' status had changed to offline at 9:47 p.m, which would have been 2:47 Pacific and that he changed back to online at 10:08 which would have been 3:08 p.m. Q. And then about 30 seconds later you, you write hi? A. Yes. Q. And about a minute later, you write are you there? A. I didn't get a response for about a minute, so I asked if he was there. Q. And then about 30 seconds later, there's a response: dread: hey cirrus: How are you doing? dread: im ok, you? Page 331 cirrus: Good, can you check out one of the flagged messages for me? dread: sure dread: let me log in cirrus: ok dread: you did bitcoin exchange before you started working for me, right? cirrus: yes.. but just for a little bit dread: not any more then? cirrus: no, I stopped because of the reporting requirements dread: damn regulators, eh? dread: ok, which post? cirrus: lol yep cirrus: there was the one with the Atlantis So how long had you been chatting by this point by the time you reached the last line there? A. It was about four minutes. Q. And what did you mean when you say can you check one of the flagged messages for me? A. What I was asking him to do was to log in to that support panel and that flagged message section where he gave me the access rights to administer on the marketplace. And what that would cause him to do is to force him to log in under another administrator account, which presumably would be his Dread Pirate Roberts account and would force him then to access that page; so basically trying to get him online as Dread Pirate Roberts in the marketplace as well as chatting. Page 332 Q. When you told him to go to that flagged messages screen, did you yourself have that screen full pulled up on your computer at the time? A. Yes, I did. MR. TURNER: Can you go back to 129C, please, or 129B. Q. Can you point the jury to where that flagged messages page was on your screen. A. Sorry. I have a lot of things going on at the same time. So there is in the background here, you see the outer edge of the market place and that flag message page up. Q. Did you also take a screen shot of that window in and of itself? A. I did. Q. So would you take a look at what's been marked as Government exhibit 129D. A. Okay. Q. Do you recognize that document? A. I do. Q. How do you recognize it? A. It is a screen shot that I took later on that evening of that flagged message page. MR. TURNER: The government offers Exhibit 129D into evidence. Page 333 MR. DRATEL: No objection, your Honor. THE COURT: All right 129D is received. *(Government's Exhibit 129D received in evidence)* Q. You said the end of your chat -- actually, can you pull it back up, Mr. Evert, to the top of the screen, 129C, the chat right around the bottom there. You mentioned at the end there was the one with the Atlantis. What were you referring to? A. There's another marketplace which I'm referring to as Atlantis that there was a lot of, we call it, spam advertisements that were affecting our marketplace or the Silk Road marketplace, and that was something that was constantly -- something of attention, something that we discussed. So there was a flagged message that was on there from Atlantis advertisement. Q. Okay. So what happened towards the end of this chat? A. They -- so as I'm asking to go in, he asked me about the -- about whether or not I did the bitcoin exchange before. And I was waiting for basically a sign that he was logged in at the time of the market. And as soon as he said "okay, which post," then I knew that he was -- he was on that page, that he was viewing it. So I knew that he was logged into that flag message page, which then I gave a signal to Special Agent Chris Tarbell that they should effect the arrest, and I continued typing after that. Page 334 Q. So what happened after that? A. As soon as I got done with that last message Agent Tarbell and myself got up and walked to -- walked over to the library. I didn't close my laptop or didn't shut it down, I left it online -- Q. Let me back you up. You said you gave a signal to Agent Tarbell around this point. Do you know what Agent Tarbell did in response? A. Agent Tarbell gave a signal to the team through email to go do the rest. MR. DRATEL: Objection. THE COURT: Let me think for one second. How do you know that? THE WITNESS: I was on the email chain. THE COURT: I'll allow it. Q. And at what point in the chat was that, just to be clear? A. That was right at when the last thing that Dread said, so around 10:14, which would have been around, like, the 3:14 mark. Q. So 3:14:19, Dread says "okay, which post," after that, you give the signal, after that, Agent Tarbell gives the signal to effectuate the arrest? A. Correct. Q. Was it your understanding there were agents inside the library at that point? Page 335 A. Yes. Q. So how much longer were you online available to receive chat messages from Dread Pirate Roberts? A. I kept the computer online. I walked into the library -- Q. How far was the library from where you were? A. Maybe 50 feet, and so I entered the library with Agent Tarbell and we went up the first flight of stairs, we didn't fully enter into the library, we stayed sort of -- it's an upstairs -- Q. What do you mean it's an upstairs library? A. The library is located upstairs in the building. So we went up half the flight of stairs and waited there and they brought Mr. Ulbricht -- the agents that arrested him to us at the stairs. At that point in time, I shut my computer and put it in my book bag and that was reflected on there at 10:16 p.m. so it would have been 3:16. Q. Would you like me to keep going, your Honor. THE COURT: We can end for the afternoon now. Ladies and gentlemen, we're going to end for today. We're going to pick up tomorrow morning and, again, we'll start at 9:30 and if you all can be on time, that would be really helpful. If you have any transit issues, let Joe know. You've got his numbers already so that we know where to -- know where you are and how long you're going to be. But if at all possible, please try to get here since we'll all be waiting. Page 336 I want to remind you not to talk to anybody about this case, including each other or anybody in your life to avoid any news articles either on the Internet or in print or anything that might be on the TV. If you happen to be watching the TV and something comes on, I instruct you that you may not listen to it or watch it. You must turn it off. You can turn it back on as soon as it's over. And after all of this is over, after the whole trial is over, you'll be able to go back at that point later on and look back over things, but right now, I need you not to look at anything at all, all right? We'll see you tomorrow morning. Thank you very much. *(Jury excused)* *(Continued on next page)* Page 337 *(Jury not present)* THE COURT: Let's all be seated. I wanted to state for the record some of the further rulings. There had been some conversations with inigo that were talked about relating to the type of support that had been provided. To the extent that the type of support is offered in any way for the truth in terms as opposed to the fact of providing support, which is the far more likely use those would be the conversations and communications of a coconspirator as we have previously discussed. In terms of GX 127, that is either not for the truth or it would be under the hearsay exception of coconspirator statements of the staff chat. That's really not particularly for the truth. 127A is 801, Rule 801. 127B is not for the truth. 127C is not for the truth. 127D is not for the truth. 129A, there was a Vayner objection only. That was a screen shot. It was appropriately authenticated. And 127 is not for the truth. Does anybody want to comment? Those were the bases for my rulings. So the hearsay objections, which you made two types of objections, hearsay and Vayner: Vayner I have dealt with before. Hearsay, if it's not for the truth of the statement asserted, then it's not hearsay, so that doesn't apply. MR. DRATEL: Also 117, the 117A and B this morning, and you asked if we wanted additional ones under the rubric of "not for the truth." I think they would qualify as well. Page 338 THE COURT: Let me take a look for a moment. Right. 117A is not for the truth and 117B, which is the amount, the alleged -- or the cost of a certain number of pills is not for the truth. MR. DRATEL: I think you already told the jury about 118. May I ask, let me consider this overnight whether to ask the Court to instruct the jury as to the specific exhibits that you have just listed for this afternoon as to whether we want the instruction on that or to leave that for another time. THE COURT: All right. I'll wait for your application and then depending on what it is, I'll obviously consider it. Is there anything that you folks wanted to put on the record at this point in time? And why doesn't the government give us a sense as to what is coming up. I heard you say, Mr. Turner, you have an hour left. And how long, Mr. Dratel, do you think you'll have with this witness? Is it about an hour still or less than that? MR. TURNER: An hour or less, I'd say. THE COURT: Forty-five minutes to an hour, something like that. MR. TURNER: That's probably right. THE COURT: Mr. Dratel, based upon that? Page 339 MR. DRATEL: I could take him the whole day tomorrow, the whole rest of the day. I can't say for sure because cross-examination being what it is, but it's conceivable that it could go the rest of the day. THE COURT: Fine. In terms of the next witness, what we'll do is at a break tomorrow afternoon or some point, we'll get a sense of how much more time you have left so that the government can bring over whomever is next, because I'll want to continue on with the next person right away. MR. DRATEL: I will do two things: When I come in tomorrow, after I have gone over everything again and see where I want to go, I'll give them a better sense and the Court a better sense, but also, by lunchtime I'll know. And then if you put in redirect and recross that's not extensive, we'll have a better sense. THE COURT: You folks can confer and make sure we get people lined up. Is the next person going to be the person who was second on the government's witness list? MR. TURNER: If your Honor has the most recent one, it should be Tom Kiernan, Thomas Kiernan. THE COURT: That is the next name I have, so it would be Mr. Kiernan? MR. TURNER: Correct. THE COURT: Who would be next? And he is anticipated to be slightly shorter than this witness? Page 340 MR. TURNER: Correct. THE COURT: We'll proceed as we have all discussed for tomorrow. Is there anything else we should go over right now? MR. TURNER: Not from the government. MR. DRATEL: There is one thing I wanted to clarify with respect to our objection on the business records issue, it's not only about contemporaneous knowledge or contemporaneous verification, but also the reliability of the record itself. So we would say in this context in an Internet context particularly when you have a witness who was masquerading at the time that the reliability of communications can't be validated in a way that is necessary for a business record. THE COURT: I think part of the issue is simply whether or not -- well, Mr. Turner, why don't you respond. MR. TURNER: I think you're mixing apples and oranges here. In terms of the reliability of the software, the agent testified that he spent thousands of hours on the system, knew how it worked and knew that when people would post, the time of the posts would show up, where the timestamp is and the name of the poster would show up where the username is, etc. There's no reason to believe that the system was somehow unreliable in that regard. The fact that he's an undercover, quote, masquerading as another user has nothing to do with the technical reliability of the software and what it displays. Page 341 THE COURT: Go ahead, Mr. Dratel. MR. DRATEL: One is, is that doesn't verify the substance of the communications made in those exhibits. Also, he's not a business records person for the software. THE COURT: Let's put it this way: He's an individual who participated directly in both reviewing the communications for accounts he had taken over of administrators and also creating communications himself. There's no indication in the record currently, there's no factual indication of unreliability that things were not recorded and retained in the manner in which they appear to be. If such information develops, we'll take that up at the right time there's no indication right now that the posts weren't appropriately recorded, appropriate being simply that the key strokes resulted in the letters on the page indicating what those words were in the English language. MR. TURNER: To add one more factor to the record: He was a moderator of the forum so he was responsible for keeping it organized and have the ability to do searches and that sort of thing that ordinary users couldn't do so he was in some way a caretaker of the forum and many ways like a custodian of record. THE COURT: All right. Page 342 MR. DRATEL: I was more concerned, I believe, when I was objecting about messages that occurred before he even got to that stage that he was validating that he had not been part of that he was just looking at retrospectively; but also that it's not for the truth because the business record aspect, it has to be reliable, the information in there. So the fact that it's reliable that that's what appeared on the screen doesn't mean the substance of the communications were reliable. THE COURT: I hear your point. The witness indicated that based upon his testimony, which you'll take up at cross-examination, is that when he took over an account, the account would have resident on it, if you will, whatever historical information continued to exist on it. Some of it -- there may be certain things that were gone or not gone. But I think we hear each other's positions. You've got my ruling on this. At this point in time, I don't have any basis to believe that the information that was recorded were not statements made as they appear to be indicated. They appear to be accurate reflections of words that were put on the page. MR. TURNER: Not to belabor the point, but for the record, our position is that virtually all of these communications are not offered for the truth, things like chat instructions, these were not offered for the truth value; it's just to document the role of DPR on the site as the boss of these employees. That's all. Page 343 THE COURT: I understand that. And I think I tried to indicate when certain things were not for the truth, but there are certain statements which certainly overlap with assertions that the government is attempting to prove. So whether or not you're going to turn back to some of those statements, for instance, involvement in transactions, that will be something that, if you do, I'll have made an appropriate ruling one way or the other. Let's all take our break. We'll pick up tomorrow morning at 9:00 a.m. THE DEPUTY CLERK: All rise. *(Adjourned to January 15, 2015 at 9:00 a.m.)* * * * Page 344 INDEX OF EXAMINATION Examination of: Page JARED DER-YEGHIAYAN Direct By Mr. Turner . . . . . . . . . . . . . 135 GOVERNMENT EXHIBITS Exhibit No. Received 106 . . . . . . . . . . . . . . . . . . . . 136 108 . . . . . . . . . . . . . . . . . . . . 140 109 . . . . . . . . . . . . . . . . . . . . 142 101 . . . . . . . . . . . . . . . . . . . . 144 132 . . . . . . . . . . . . . . . . . . . . 146 110 . . . . . . . . . . . . . . . . . . . . 147 111 . . . . . . . . . . . . . . . . . . . . 149 113 . . . . . . . . . . . . . . . . . . . . 154 114 . . . . . . . . . . . . . . . . . . . . 167 113A . . . . . . . . . . . . . . . . . . . 172 103A . . . . . . . . . . . . . . . . . . . 177 103B . . . . . . . . . . . . . . . . . . . 178 s 801 and 801A . . . . . . . . . . . . . . . 183 116A . . . . . . . . . . . . . . . . . . . 184 116B . . . . . . . . . . . . . . . . . . . 186 116C . . . . . . . . . . . . . . . . . . . 188 117A . . . . . . . . . . . . . . . . . . . 193 117B . . . . . . . . . . . . . . . . . . . 195 118 . . . . . . . . . . . . . . . . . . . . 198 Page 345 118A . . . . . . . . . . . . . . . . . . . 201 118B . . . . . . . . . . . . . . . . . . . 207 119 . . . . . . . . . . . . . . . . . . . . 213 120 . . . . . . . . . . . . . . . . . . . . 218 121A . . . . . . . . . . . . . . . . . . . 234 121B . . . . . . . . . . . . . . . . . . . 234 123 . . . . . . . . . . . . . . . . . . . . 238 123A . . . . . . . . . . . . . . . . . . . 242 125A . . . . . . . . . . . . . . . . . . . 243 125B . . . . . . . . . . . . . . . . . . . 246 133 . . . . . . . . . . . . . . . . . . . . 248 125C . . . . . . . . . . . . . . . . . . . 250 125D . . . . . . . . . . . . . . . . . . . 252 125H . . . . . . . . . . . . . . . . . . . 255 125J . . . . . . . . . . . . . . . . . . . 256 125K . . . . . . . . . . . . . . . . . . . 259 125G . . . . . . . . . . . . . . . . . . . 262 125L . . . . . . . . . . . . . . . . . . . 263 126A . . . . . . . . . . . . . . . . . . . 266 126C . . . . . . . . . . . . . . . . . . . 271 126D . . . . . . . . . . . . . . . . . . . 272 127 . . . . . . . . . . . . . . . . . . . . 292 127A . . . . . . . . . . . . . . . . . . . 296 127B . . . . . . . . . . . . . . . . . . . 300 127C . . . . . . . . . . . . . . . . . . . 302 Page 346 127D . . . . . . . . . . . . . . . . . . . 306 127E . . . . . . . . . . . . . . . . . . . 308 127F . . . . . . . . . . . . . . . . . . . 310 128A . . . . . . . . . . . . . . . . . . . 318 129A . . . . . . . . . . . . . . . . . . . 321 128B . . . . . . . . . . . . . . . . . . . 323 128C . . . . . . . . . . . . . . . . . . . 325 129B . . . . . . . . . . . . . . . . . . . 328 129C . . . . . . . . . . . . . . . . . . . 330 129D . . . . . . . . . . . . . . . . . . . 333 Page 347 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA, v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant. ------------------------------x New York, N.Y. January 15, 2015 9:19 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York BY: SERRIN A. TURNER TIMOTHY HOWARD Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal Sharon Kim, Government Intern Page 348 *(Trial resumed; jury not present)* THE COURT: Please be seated, everyone. THE CLERK: Continuation of the matter now on trial, the United States of America versus Ross William Ulbricht, 14 Cr. 68. Counsel, please state your names for the record. MR. TURNER: Good morning, your Honor. This is Serrin Turner and Timothy Howard for the government. With us at counsel table presently are Agent Vincent D'Agostino from the FBI, Molly Rosen, a paralegal from our office, and Sharon Kim, a legal intern from our office. Nicholas Evert will be here shortly, a paralegal from our office. THE COURT: All right. Good morning, all of you. MR. DRATEL: Good morning, your Honor. Joshua Dratel for Ross Ulbricht, who is standing beside me, Lindsay Lewis from my office, and also counsel Joshua Horowitz. THE COURT: Good morning to all of you. OK. I've got two matters to raise. One is I wanted to refer specifically to some additional support for the Court's ruling yesterday relating to the co-conspirator exception for the hearsay objections and to refer in particular to the Bourjaily case, which you are all very familiar with, I'm sure. It is a Supreme Court case. B-o-u-r-j-a-i-l-y, which requires the Court to make a finding that the various elements for the co-conspirator exception are made by a preponderance, which is what I believe I said. Page 349 I also had mentioned that there were some instances where the evidentiary rules were different. Let me just be clear that that is not the case with respect to the co-conspirator rule. It is a preponderance standard. Where it might be different, and this is a question that as yet actually unresolved, is with things, for instance, having to do with relevance and some probative evidence, and whether or not that is a lower standard than preponderance is something which is an open question but need not trouble us here. I wanted to make it clear that my findings as to the co-conspirator exception are by a preponderance of the evidence. And in terms of the screenshots in particular of the narcotics, I wanted to indicate that -- as I had said yesterday, and as the Bourjaily case makes clear, "The inquiry" -- I am reading from the Bourjaily case, "The inquiry made by a court concerned with these matters is not whether the proponent of the evidence wins or loses his case on the merits but whether the evidentiary rules have been satisfied. Thus, the evidentiary standard is unrelated to the burden of proof on the substantive issues in a criminal case," At 2278. With that said, I do find by a preponderance that as to the screenshots the vendors were in a conspiracy with Dread Pirate Roberts. It remains subject to connection to the extent that the government is asserting that Dread Pirate Roberts at that time was Mr. Ulbricht. The Court does believe at this point in time that, subject to that connection, there is sufficient proof of a conspiracy with a common criminal objective, which is the distribution of illegal narcotics. There is demonstration of that conspiracy through, for instance, the vendor contracts, which were put in yesterday. There is also evidence of personal involvement by Dread Pirate Roberts in the form of information put in yesterday of the document -- one of the two documents relating to commissions refers to commissions being taken in instances where he has and the word "involved" is used specifically and "escrow," and that creates a level of involvement as well as the finalize buttons and the arbitration process, all of which there was evidence as to yesterday from Mr. Der-Yeghiayan. Page 350 In terms of the in furtherance requirement, the Court does find that putting the screenshot of the illegal narcotics up on the Web is in furtherance of the distribution of illegal narcotics, and the reliability of the content being what it purports to be was in part supported by the testimony yesterday that there had been buys from the undercover agent, Mr. Der-Yeghiayan, that indicated that the narcotics received in response to orders from the website tested in all but one instance positive for the narcotics they purported to be. Therefore, based upon a preponderance of the evidence, I just wanted to indicate that the co-conspirator exception did apply in the manner that I suggested and with the evidentiary basis that I suggested. Page 351 The second issue is that I understand that a juror was approached yesterday on the subway platform by an individual who represented himself to be a New York Post reporter. It was an individual with a red beard. And the juror indicated that she did not speak to him and that she walked away. It is my intention -- and I should say that that was reported to my deputy. I have not had a conversation with the juror. My intention this morning is at the appropriate time to make sure that I reiterate carefully and slowly the general instructions, indicate that if anybody approaches them purporting to be a reporter or anybody else, that they should walk away and do just that. Do you folks believe that anything further need be done in this instance at this time? I mean, there are pros and cons to having people brought out here and individually questioned, but I will take applications. It was Juror No. 2, by the way. MR. TURNER: May we have a moment to confer? THE COURT: Sure. Yes. *(Pause)* MR. TURNER: Your Honor. THE COURT: Yes. MR. TURNER: The parties both agree, a limited voir dire would be I think a good idea just to get clear on what was said, if anything was said that might bias the juror in one direction or another. Page 352 MR. DRATEL: And to make sure that the juror is still obviously in the same position she was before -- in other words, mentally before the encounter. THE COURT: Yes. All right. That's fine. I think that we can do that in a low-key way. What I would propose to do is just to have her come on out and sit in her spot and ask her a couple of questions and then have her head back in. Sound all right to you folks? MR. DRATEL: That is all we had in mind. MR. TURNER: Yes, your Honor. THE COURT: Let's go ahead. We know she is here. I know you folks may have some things, but let's get her out here to do that. MR. DRATEL: May I alert the Court to a logistical issue, which is Mr. Ulbricht can't see the witness. We may move the monitor around so we can try to configure it in a way to do that. THE COURT: Oh, absolutely. MR. DRATEL: Also, if we move this back a little bit, would that be better, too, just because I am blocked off. THE COURT: It doesn't bother me. What I want to do for the podium, my main concern is that the jurors can see what is going on. You are certainly welcome to move that back a little bit so long as it doesn't create so much distance that there is another issue, but I don't think you are talking about more than a few inches. Page 353 In terms of the monitor, do whatever you need to do. I need to see Mr. Ulbricht's face as well, but I can because he is sufficiently tall that I can actually see him over the monitor. Just move it a little over. MR. DRATEL: This way is fine with me. THE COURT: Right. Also, there is no magic to that particular monitor. If you've got a smaller monitor with a similar connection, that would work. MR. DRATEL: I think this is all right. I don't think I will have a problem. I can bring it up on my own screen. THE COURT: Fine. I know we have at least one other matter from somebody who wanted to raise it. Does anybody want to raise a matter other than this? MR. TURNER: I just had two brief matters, your Honor. THE COURT: OK. MR. TURNER: One, I just want to make sure -- THE COURT: Can we just do the juror thing first? MR. TURNER: Absolutely. THE COURT: Terrific. I just want to make sure I know what the lay of the land is. We have two from the government. Anything from you, Mr. Dratel? Page 354 MR. DRATEL: No, your Honor. THE COURT: All right. So let's just get Juror No. 2 out here. *(Juror No. 2 was present)* THE CLERK: All rise. THE COURT: Let's all be seated. Juror No. 2, thank you for coming out here. I know it is a little intimidating to come out all by yourself with this whole big room full of people. I appreciate it. JUROR NO. 2: That is fine. THE COURT: I just wanted to find out from you what happened yesterday. I understand somebody may have approached you. Why don't you just tell us what happened. JUROR NO. 2: OK. I was at the Centre Street station and I was walking down the stairs to the uptown Bronx side, where the 5 and the 4 and the 6 train are. I walked down the stairs and was walking along the platform, and a reporter kind of approached me with a pad and pencil, said, "I'm from the New York Post. Can I ask you some questions?" And I just went like this with my hand (indicating) and kept walking, and that's all that happened. THE COURT: OK. All right. And what you did was perfectly appropriate and absolutely right and consistent with the Court's instructions. So I thank you for that. And let me just ask you, did the fact that you were approached in any way make you feel like you are going to be unable to be fair and impartial in this case? Page 355 JUROR NO. 2: No, not at all. MR. DRATEL: One other question, your Honor, which is -- THE COURT: I will ask it. MR. DRATEL: Yes. As to whether there has been any conversation with other jurors about that. THE COURT: I think that is very fair. One thing we want to make sure of is that a conversation even about an incident like that doesn't end up leading to conversations with other jurors, and if it has just let me know and then we'll figure out what to do. JUROR NO. 2: When I mentioned it to Joe, some of the other jurors heard me tell Joe that the encounter happened yesterday. THE COURT: OK. So did you have any other conversations with them about it? JUROR NO. 2: No. THE COURT: Did anybody say to you anything else or ask you any questions about it? JUROR NO. 2: No. I mean they heard me say it. Joe asked me, you know, what happened. And what I just told you. THE COURT: Yes. JUROR NO. 2: You know, she made a comment, "Well, that was rude," and that was it. Page 356 THE COURT: OK. All right. So I'll address that, you know, by making sure that I have communicated all the instructions properly. Will you be sure not to -- JUROR NO. 2: OK. THE COURT: -- lead to any other -- have that approach lead to any other conversation. Just tell the other jurors that you can't talk about it. JUROR NO. 2: Mm-hmm. THE COURT: I am going to mention to the jurors again that you folks shouldn't talk about anything to do with the case. It is really the broad instruction of nobody should talk about anything having to do with this case, and that covers all of the myriad ways in which the case could come up. JUROR NO. 2: OK. THE COURT: Does that make sense? JUROR NO. 2: It does. Thank you. THE COURT: All right. Terrific. So go back into the room, and even if they ask you what happened just now, just say -- JUROR NO. 2: I can't talk about it. THE COURT: Right. You can't talk about it. All right? JUROR NO. 2: Thank you. Page 357 THE COURT: Terrific. Thanks very much. THE CLERK: All rise. *(Juror not present)* THE COURT: All right. Let's all be seated. OK. Any comments on what just occurred? My view is that what I am simply going to do now is before the next break, but not right away, but before the jury goes back into the room, to give them their instructions again slowly and carefully. I can also, if people would like -- well, what would you like? Anything else other that that? MR. DRATEL: Just to confirm that it hasn't had an impact on anybody, to ask them whether or not anybody -- THE COURT: The question is do you want me to say to the entire jury panel there was a juror who was approached. The juror handled it perfectly appropriately by telling -- by just walking away and not saying anything. If anybody else is approached, please let the Court know. And was anybody else approached? Do you want me to do that? MR. DRATEL: It is a question of whether it has had an impact on anybody's ability to the judge the case impartially, that is all. THE COURT: Do you want me to ask the entire panel? MR. DRATEL: Yes, because think they all know about it by now. THE COURT: Mr. Turner. Page 358 MR. TURNER: It doesn't strike me as particularly necessary, your Honor, but I don't object to it. I think that probably the most important thing is to stress to the other jurors that if that happens, that they should do exactly what this juror did, or, you know, just make clear that they should not talk to them, perhaps, and try to avoid hearing any comments about the case that might influence their decision making. THE COURT: All right. So the press who is here in the room, you see what happens -- if this did occur, what happens when this kind of thing occurs because of the possibility of juror influence. So here's what I am going to do. When the group comes out here, I am going to then state, in order to put all of these pieces together that you folks suggested: A juror was approached. She did exactly the right thing, which is she walked away. And I want to make sure that you all understand that if the press, or anybody else even purporting to be the from the press or anybody approaches you about this case, that you do the same thing. Just walk away. Do not have a conversation. Don't talk to each other about any approaches that may be made to you about this case. Do let us know. And has anybody been approached or know about that approach other than what I said and believe that at this point they cannot be fair and impartial based on that? Page 359 Is that all right, Mr. Dratel? MR. DRATEL: Yes. Thank you, your Honor. MR. TURNER: Yes, your Honor. THE COURT: Both parties are in agreement that that would be an appropriate way to proceed. OK. Now, Mr. Turner, you had other things. MR. TURNER: Just briefly. I wanted to make sure that our position on the hearsay issue has been adequately articulated. I'm not sure it was yesterday. In terms of the forum posts and the communications of DPR, our position would be that to the extent he says anything like, you know, you've got to follow my rules or else, those statements don't have truth value; it is simply indicative of his role. To the extent that he says things like I am leading an international narcotics enterprise, that would be a party admission. That would not qualify as hearsay under 801. That would be our position. And on the offers of drugs on the website, you know, I'm not sure those are being offered for the truth. If you have simply pictures posted like that on a website with a price tag, there is no statement there. It is just making it clear that somebody is making an offer of drugs. This is a marketplace where people are offering to sell things and buying things. THE COURT: The issue comes in -- just to be very clear on the first point, I think that is exactly what I was differentiating between yesterday, the portions which are not hearsay versus the portions which could be hearsay, and we, I think, now dealt with them thoroughly. Page 360 In terms of the posts, the website vendor -- I don't mean the chat posts, I mean the screenshots. MR. TURNER: The listings. THE COURT: When you put up one that says tell us some of the things that were available on that website and the witness says "heroin," all right, not "this is a photograph which has the words on it indicating heroin," then it is being offered for the truth, I think. I think that is a fair argument. That is one that the defendant raised pretrial as part of the hearsay objections. Nevertheless, my ruling on the co-conspirator exception, sort of the reason why I am belaboring it is for that very reason, to ensure that the record is clear as to the basis for my ruling. But I do think that there is some amount of truth which is being sought after and potentially sought to come in for based upon the content. It is not just a picture of a brown block but the word "heroin" around "heroin" that appears underneath it. MR. TURNER: Understood. I just wanted to articulate our position and make sure it is on the record, your Honor. THE COURT: Do you disagree with me? Page 361 MR. TURNER: I think there are arguments in the alternative. I think your Honor is certainly correct that if it is being offered for the truth, it would certainly be statements of a co-conspirator. Under the government's theory, we made clear that we think that all the vendors are conspiring with the defendant. THE COURT: Now, I just want to pause for one second. If you don't intend something to be offered for the truth, you will need to approach the questions in a manner that makes that clear. In other words, I see that this indicates, you know, whatever, but, you know, some set of questions other than tell me the type of goods that were sold. MR. TURNER: Understood. There was one other matter that we would request to address at the sidebar, your Honor. THE COURT: All right. *(Continued on next page)* Page 362 *(At the sidebar)* MR. TURNER: I really don't think this will be a problem but I just wanted to give the Court a heads up. The witness actually is recovering from a serious respiratory illness and is on heavy antibiotics, and he reportedly was feeling very ill after yesterday's testimony. He is a tough guy and I think he will be fine today, but there may be a point when we will just request an additional break, or something like that, if he has indicated that he is not feeling well. Again, I don't think that will happen, but I didn't want it to be a total surprise if it did. THE COURT: Is there any way in which the taking of the antibiotics makes his mind unclear? MR. TURNER: No. I think it is queasiness, nausea. So I don't think it is lack of memory or lack of reasoning ability. MR. DRATEL: I appreciate that because, obviously, I would like him to be fully cognizant on cross as well. I don't want him to say he doesn't remember or things like that because he is not feeling well. I guess the purpose of my cross is to make him queazy. But you understand what I am saying. THE COURT: I do. MR. DRATEL: So if he does need time, I am OK with that because I do want him to be fully attentive. THE COURT: Let's take this, as I like to say, one step at a time. If there is a point when he is feeling unwell, then we can take a break and take another witness in between. It is very important that he be able to proceed with his faculties about him, as he has proceeded up to this point. In other words, we're not asking him to perform differently than he has performed up to this point, but we don't want Mr. Dratel to end up with a guy who suddenly can't testify because he is sick only for cross. Page 363 MR. TURNER: No. And that is why I am saying he has been fine so far and I don't think it will be a problem. I think all I want is to let him know that we let the Court know so that if he does feel like he is sick, he can let the Court know and that won't be a problem. Honestly, I don't think there is going to be a problem. THE COURT: OK. One step at a time. MR. DRATEL: OK. Great. THE COURT: Thank you. *(Continued on next page)* Page 364 *(In open court)* THE COURT: Is there any reason we can't just go ahead and bring the jury out and start right now? Anybody need a break before we start? MR. TURNER: No, your Honor. MR. DRATEL: No, your Honor. THE COURT: OK. Let's go ahead and bring the witness in and we'll get the jury out. *(Pause)* *(Continued on next page)* Page 365 THE CLERK: All rise as the jury enters. *(Jury present)* THE COURT: All right. Ladies and gentlemen, let's all be seated. Thank you. I see that you folks -- it looks like the coffee service has arrived this morning. Are there tops for the coffee service? Terrific. OK. Now, remember, confess if you spill, and I will, too, if I spill up here. Ladies and gentlemen, one thing I want to mention before we start this morning is that one of the jurors was approached yesterday on the subway platform by somebody who identified himself as a member of the press, and she did exactly the right thing, which is just walked away, didn't engage at all, and that's exactly the right thing. So if that happens to you, I instruct you to do the same thing. Not to talk to anybody about this case no matter who they are. As I've said, even each other. And so it's very, very important. Now, if it does happen to you and somebody approaches you -- somebody approaches you about this case, be it from the press or somebody else, don't talk to each other about it. Mention it to Joe, and then we'll take it from there. All right? So in light of the fact that it has happened once and I have just mentioned this to you folks, is there anybody who believes that the fact that somebody has been approached and that a member of the press, or somebody identifying themselves as from the press, has approached somebody, does that make anybody feel that they can't be fair and impartial in this case? Page 366 *(The jury indicated negatively)* THE COURT: All right. Thank you. We'll go ahead and we'll continue. I want to remind the witness, sir, Mr. Der-Yeghiayan, you are still under oath from your first day and from yesterday. All right, sir? THE WITNESS: Yes. Thank you. JARED DER-YEGHIAYAN, Resumed, and testified further as follows: THE COURT: You may proceed, Mr. Turner. MR. TURNER: Thank you, your Honor. DIRECT EXAMINATION MR. TURNER Q. Agent Der-Yeghiayan, yesterday we left off talking about the defendant's arrest, and I want to get back to that in a minute, but first I want to go back to a topic that we didn't quite finish earlier yesterday. MR. TURNER: Mr. Evert, could you pull up Government Exhibit 125B and go to page 2. Page 367 Q. So this was a forum post we looked at yesterday, Dread Pirate Roberts, and it says, "Drumroll, please. My new name is Dread Pirate Roberts." First of all, I wanted to ask you, are you familiar with the name Dread Pirate Roberts in the context of pop culture? A. Yes, I am. Q. How are you familiar with it? Where does it come from? A. It came from a movie from I think it is like the '80s. Q. What is the movie called? A. The Princess Bride. Q. And what is the basic legend of the Dread Pirate Roberts in the movie? A. So in the movie there is -- the main character was the Dread Pirate Roberts, and he met up with one of his loves in his life and he confessed to them that he was not the original Dread Pirate Roberts, that he took over the identity of Dread Pirate Roberts from another guy I think by the name of Ryan and that guy got it from another guy whose name was like Cumberbundt, or something like that, and then he got it from the original Dread Pirate Roberts that was retired like 15 years earlier. And the whole point of it was that the identity was what was important, the name was important, that the name lived on. So multiple people could basically assume that name, and it is just the -- or the story of Dread Pirate Roberts would be the intimidating factor. Page 368 Q. OK. And we also looked yesterday at this "Begin PGP sign message" and "PGP signature" underneath. Let's try it again. So what is the benefit of having a PGP sign message and what does that mean? A. So a PGP sign message, again, is just a way to authenticate or validate who you are online. So when you first -- when you are talking to someone on the Internet, it is hard to always validate you are always talking to the same person every time you see them day after day. So one of the ways that we are able to identify ourselves is using this program, this PGP, because it allows you to create a key that is unique to you that you share with other people, and that key, it is a public key, you could use to verify messages from them at a later date, messages they could sign, that they will authenticate so that you will know time and time again that that person has the same key that you are talking to. It is an unique key as well. Q. All right. So did Dread Pirate Roberts post his public key anywhere on the site? A. Yes, he did. Q. We looked at this exhibit before, Government Exhibit 133. Could you put that up on the screen. Please zoom in. And when was this screenshot taken by you again? A. What exhibit was that again? Q. That was 133. Page 369 A. That was August 19, 2013. Q. And so you could take this public key and do what with it? A. This would be something that I could then use to authenticate messages that would be later on signed by Dread Pirate Roberts. Q. Like the one we just saw on the forum? A. Yes. Q. Did this public key change over time of Dread Pirate Roberts, or did it stay the same as long as you investigated the site? A. From the beginning of my investigation until the time of the arrest, it stayed the same. Q. Could we take a look at Government Exhibit 133A, please, which did not come in yesterday yet so please don't publish it. A. OK. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It was a screenshot that I took of Dread Pirate Roberts' profile on the Silk Road market page on September 19, 2012. Q. So how does that date -- well, your Honor, we would offer this exhibit into evidence. MR. DRATEL: Just a hearsay objection, your Honor. THE COURT: All right. For the same reasons that we've previously discussed, that objection is overruled. Page 370 GX-133A is received. *(Government's Exhibit 133A received in evidence)* MR. TURNER: Put that up, Mr. Evert, and zoom in down here. Q. So this is from approximately what, a year earlier than the last one? A. About, yes. Q. And it is the exact same public key? A. Yes. Q. Did you prepare any sort of demonstration for the jury today to help you explain these concepts and help explain how PGP keys work? A. Yes, I have. Q. Would it aid your testimony to give that demonstration to the jury? A. Yes, it would. MR. TURNER: May I approach, your Honor? THE COURT: You may. Q. Do you recognize the CD I am handing you right now? A. Yes, I do. Q. How do you recognize it? A. It is a disc that I initialed that contains the video that I prepared. Q. May I take it back? MR. TURNER: I am showing the witness what has been marked as Government Exhibit 133B. With your Honor's permission, may we play it for the jury? Page 371 THE COURT: Yes. I take it you have shown that to the defendant? MR. TURNER: Yes. THE COURT: All right. *(Pause)* Q. OK. So if you could do the same thing with this video that you did with yesterday's video, if you could tell Mr. Evert when to start and stop and walk the jury through what it shows, please. A. OK. So what I'm going to demonstrate here in this video is me creating a message and then digitally signing it using the key that I own. So I will show you how that process is done, how I would sign the message, and then how I could verify that that message is authentic from my key. So the first thing I am going to show you once -- if you would begin, please -- is a program that you would use to store your key. And in this instance I have already my key in there. This is one of the keys I used in my Cirrus account. Q. Agent Jared, could I just interrupt you? Is this a public key that you are talking about right now? A. This is both a public key and a private key. Q. And could you explain the difference between private key and public key? Page 372 A. Absolutely. So I not only have my public key, which I could share with other people that could verify me, and then I also have the private key, which is what is unique to me. I'm the only one that has that, and that's what allows me to create messages from my key. It basically allows me to sign messages. Q. And if you don't use your private key to sign your message, can the public key be used to authenticate it came from you? A. Without the private key, you cannot create a message. You can't sign it without the private key. Q. OK. Go ahead. A. And so right now it's paused, and, actually, you could stop it. I'm sorry. What this is is it is the profile of the key, and there is there are a few things to point out. That there is a name that you enter in when you create the key as well as an email address. This can be anything you want. It doesn't have to be anything real. In this instance the name that I used was "me" with a lot of e's. And then that is a fake email account, which is just 101010@101010.org. You don't have to enter anything that is real. It is just whatever you want to enter in, you can; it is not required to enter in anything that is real. The other thing that I wanted to point out is the create date. That is automatically added to the key when you create it. It is on there. You can't modify that or adjust it. It is part of the key. So it will document that. In this case this key was created on October 2, 2013. Page 373 So when I am going to share my key, everyone can see this information. So my public key and they have it. This is what they will see. They will see the name of me. They will see the email address that I created, and they will see when I created that account as well. And so if you could go ahead and play, I am going to show you how I would then create a message using my key and how I would sign that message, then, using it. So I'm closing out the program, and I would use simply a text file, in this instance, to then type my message. So I'm writing -- this is an example of me signing the message using my PGP key -- the message I wrote using my PGP key. So in order to do this, all I have to do is highlight the message and in this instance right click, and I need to just click things as signed. And as I click sign -- can you pause it, please -- this is then what the result will be. And it will essentially take my message, which is in the body above here. This is an example of me signing a message saying I wrote using my PGP key, and it adds this signature at the bottom. And so now I'm going to go through and I am going to find -- if I share this with someone else, they can now verify this came from me and I'll show you how I would do that. Page 374 Q. They verify it using what? A. Using, again, a program such as this, a PGP program using my public key that I would have shared with them. In this instance I have my public key so I can verify my own key. If you could play it. First, I just wanted to show you again I have highlighted that that was the original message that I typed and I signed. Then in order to verify it, I just simply have to right click and verify. And it is going to tell me -- if you could pause it, please -- that this is a good signature, and it says -- it is a good signature from the person "me" with my email address. So I was able to automatically recognize the key that I had stored in my program and verify it to that message and tell me it is a good signature. Click play, please. And I'm going to show you what would happen if I was to now alter this message after I signed it. So this is me typing extra information in there after signing the document. So it is no longer the same document that I signed. Now, I go to verify it again after I altered it -- can you pause it, please -- it is going to tell me that I have a bad signature by that user. So there is no way after you sign a document to alter it, to then manipulate it in any way. Once you sign that message, it has to stay exactly that message intact. Page 375 Q. Does that include the signature down at the bottom, if any part of that signature changes. A. That is correct. Anything on that from basically the top line that begins "PGP sign message" all the way through the very bottom has to remain exactly the same, the same amount of spaces, the same amount of characters. Everything has to be exact in order for it to authenticate. Can you click play, please. I am just going to demonstrate that again by removing the information that I added originally to it and verifying it again in the original state that it was. And it's going to come back with a good signature again, that that was the original message. So now I'm going to take -- these are on the right-hand side -- a text file of -- I will let him scroll first. Can you pause it, please. On the right-hand side there is a text file of all of DPR's posts from the forum from the beginning of his account in around June 2011 'til about May 2013. That was all of the posts that I copied out of the forum and into a text file such as this. And on the left-hand side I also have a screenshot that I took from my Cirrus account of posts that were made by Dread Pirate Roberts, and what I am going to do first is show you now if I was a user how I would acquire Dread Pirate Roberts' public key and then how would I verify basically things that he wrote. So I am going through the steps of essentially taking in his public key that he shares with everybody and then verifying things that he wrote using his signature. Page 376 So first this is -- if you want to play it, please. This is one post that I copied, again, from Dread Pirate Roberts' profile. And it came from November 2012 -- November 12, 2012, which is up on the top. And he signed a message that said "The sig checks out for me," but I will do another one just in case. And then he says -- if you could pause it right now, please. He says, and right here -- "And here is the public key that I've been using since the site began, normally located on my user page on my main site. Q. Just to be clear, the user page on my main site, is that the page we saw before with the -- A. It is referring to the Silk Road market page. Q. That is the page we saw before with the public key? A. Yes. Q. OK. A. And so you could tell that this is his public key down below because it says "begin PGP public key." So this information from here to here is his public key, again. That was a screenshot. I can't copy that text exactly and import it so I have to use that text document to do it. So what I am going to show you is that the text document on the right is the same information that is from the screenshot from the left. Page 377 If you could play it, please. So again this is the text document. I just wanted to point out that it is the same date. Now, this was copied from a user that actually has time set differently on his computer when I originally copied this stuff. So it is slightly different, but it is hours different because of the UTC variation. But, again, it is the same message and the same PGP key. So can you pause it, please. Pause, please. So right now in order to import this key -- that is actually fine. That is a good place to stop. I would highlight his public key, and what I am going to do is import it. There is a second option up here above this. And that's all I have to simply do in order to bring in his public key into my program and for me to verify his signatures at a later date. So right now I am going to import his key. So click play, please. There is nothing so important about importing it or taking it as more than that this is how I would capture it. And if you could pause it, please. It tells me right now that the import was successful and that I imported a key that was titled Silk Road with the email address staff@silkroadmarket.org and the import was OK. So it let me know that the import was successful, that I was able to capture that public key. Page 378 Q. So now it is on your computer permanently? A. Yes. Not permanently. I can delete it, too. Q. Sure. A. So if you click play, please. I'm going to show you off that same program where I keep my key. If you could pause it, please. This is now that imported key that's from Silk Road. So his public key is now available, and it lets me know that all I have is his public key with that "pub." And the one up above says "sec/pub," and that means that I have the private key and the public key for the key up above, which is mine, but. I only have the public key for Silk Road. I do not have the private key. Q. Just to be clear, the public key you are talking about, that is used to verify a signature. The private key is used to sign the signature, right? A. Yes. The private key is used to sign it and the public key is used to verify. Q. The Silk Road name, did that come from you or was that automatically generated when you downloaded it? A. That was what was created in the key when it was created by the user who created it. Page 379 Q. So you didn't create that? A. I did not. Q. And the Silk Road -- the staff@silkroadmarket.org, same thing? A. The same thing. I am going to open his profile. If you click play. Q. I just want to make clear. You mentioned earlier that you used a fictitious email address in creating your key? A. Yes, I did. Q. Do you know whether staff@silkroadmarket.org is a real email address? A. That domain, which is silkroadmarket.org, that website does exist or did exist at the time. It was a website that was on the open Internet that was used to advertise the Silk Road market on Tor. It was a redirect for people that would be maybe doing a Google search on the regular Internet. And Google searching "Silk Road," they would find that website, and that website would give you directions on how to get to the Tor Silk Road website. Q. OK. But the email address, staff@silkroadmarket.org, do you know if that was real or not? A. I'm not sure if it was -- Q. So it could have been fictitious, it could have been real, it doesn't really matter for the program? Page 380 A. Right. MR. DRATEL: Objection. Leading. THE COURT: Why don't you rephrase. MR. TURNER: I will withdraw, your Honor. A. OK. So if you click play, please. I just want to show you when I opened that -- again, if you pause it for a second -- the name that is on the account is Silk Road. The email account that was entered in by the user that created it was staff@silkroadmarket.org, and it was created on April 1, 2011 at 4:47 a.m. And that is information, again, that I can't modify that comes with the key that comes when you share it. Can you click play. So now that we have his public key stored, we can now verify messages that were signed by him. And so I am going to go through this list on my right. I am going to scroll down. Now, the bottom is the oldest messages and it starts around June 2011, and it goes chronologically to the top which, would be the newest messages, which would be May 2013. And what I'm going to do from the bottom is basically try to find one of his first signed messages that I could see, and this is the first signed one. If you could pause it, please. And this is from June 19, 2011. And it is, again, a signed message, and so I am going to try to verify this now signed message with this key that I just imported. Page 381 Can you click play, please. So, again, I copied the entire message. I simply right clicked and then clicked verify. If you could pause it, please. This then shows that I have a good signature from Silk Road at staff@silkroadmarket.org. So it is verifying that that message that was signed -- and this is what a user would do if they would see this message and maybe they didn't know if they could trust who is posting this on the forum or posting it elsewhere or posting it anywhere on the Internet, how do I know that I can trust this message that came from Dread Pirate Roberts? Because anyone could just start up an account maybe and try to fake it's him, well, this would be one way to do it because this key is somewhere that somebody would have already, something that they know they could trust him with, something that would be something that is from the past. And so click play, please. I am going to also show that this key stayed the same over time. And so I'm going to actually scroll up somewhat randomly here and go up to a post that I found from -- this is from January 16, 2012. And, again, I'm going to try to verify this. That's all I'm doing, just verifying that the message is a good signature. So when I could verify, again it comes back as a good signature from Silk Road at staff@silkroadmarket.org. I'm going to scroll up again. This time I am going to try to find something later in 2012, early 2013, to see if, again, that signature is the same signature from that same key and if it still verifies that it came from Dread Pirate Roberts' public key. Page 382 *(Pause)* Some of these I'm skipping over because they are a little bit longer and I just wanted to get a message that was shorter so you could see the entire message. So this one was from November 23, 2012. Again, this is another signed message with a signature. And just by highlighting the entire message and clicking "verify," it will tell me it is a good signature. And, lastly, I'm going to go up to my most recent copy that I had of a post that was made by Dread Pirate Roberts, and I was going to see if that one, too, will verify. That was from -- it is going to be from May of 2013. So this is the most recent post I had, and this is from May 7, 2013. When I say "most recent post I have," it is just on this particular text file. And when I click "verify," again it comes back as a good signature, that it stayed the same signature and the same key from 2011, 2012 -- late 2012 and May of 2013. I'm going to show you again -- now, if I was to alter this message that was signed by DPR -- so I typed in "altered." Do you want to pause it, please. So down at the bottom here I actually typed in "altered" on this text page. I am going to try to verify it now again that I have changed that message. Page 383 Click play, please. And if you pause it. It comes back as a bad signature now. There is no way that I could alter that message and still have it come up as a good signature. It has to stay in its original state that was created by the person that owns that key. And if you click play. Again, I am going to remove that -- actually, I could do a different version but that is the end of the video. Q. All right. So what does the fact that you were able to verify those different messages from DPR at different times imply about the user who posted those messages? MR. DRATEL: Objection. THE COURT: Why don't you rephrase it. MR. TURNER: OK. Q. So what did the person who posted those different messages from DPR at different times have to have in order for you to be able to successfully validate each of those messages? A. Since all those messages were verified with the same public key, they had to have the same private key for that entire duration. So it is one person with one -- MR. DRATEL: Objection. Objection. THE COURT: I'll sustain the objection. *(Continued on next page)* Page 384 MR. TURNER Q. Let me see if I -- without talking about the number of people involved, let me just ask you again, what would the person or persons who posted these various messages have to have in order for you to successfully validate those messages using DPR's public key? A. It would have to be the same private key for the entire duration. Q. If at any time those messages, one of those messages was posted, the person posting them lacked DPR's private key, would you have been able to validate that message with DPR's public key? A. No. It would come back as a bad signature. MR. TURNER: Let's go back to where we left off yesterday afternoon and, Mr. Evert, can you pull up 128C, please. Q. Just to recap. Yesterday you testified that you saw the defendant enter the library when you were in this area depicted in the photo, right? A. Correct. Q. And when you saw the defendant enter the library where, again, were you situated? A. I was seated across the street. Q. Would you use the laser pointer. A. I can't -- right here. Page 385 Q. Okay. And who was with you when you saw him in the library? A. It was computer scientist Tom Kiernan. Q. You testified yesterday that a few minutes after the defendant entered the library, what happened to DPR's online status? A. He went online. Q. And did you begin chatting with him after that? A. Yes, I did. Q. And where were you while you were chatting with him? A. I was seated outside, again, on the bench across the street from the library. Q. Same place? A. Same place. Q. And who, if anyone, was with you by that point, at the point when you were chatting with DPR? A. FBI Special Agent Chris Tarbell. Q. And where had Tom Kiernan gone? A. Tom Kiernan had entered into the library once he saw Mr. Ulbricht enter. MR. TURNER: Could you put up 129C on the top half of the page, Mr. Evert. That's too much. Just the bottom few lines, please. There we go. Thank you. Can you put 128C below. Q. So you said at some point during your chat, you gave a signal to FBI Agent Chris Tarbell to do what? Page 386 A. To effect arrest. Q. And at what point in the chat was that again? A. That was after the last message that I received from Dread Pirate Roberts which said "okay, which post." Q. And then you typed in the last two lines of this chat? A. Yes, I did. Q. And where were you by that point? A. I was still seated across the street. Q. After typing in the last two lines of the chat, what did you do next? A. After I got done with the last line that I typed in there, "there was the one with atlantis," I got up and moved over to the library, so I entered the library. Q. So can you take a look at Government Exhibit 128D, please. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's the outside of the Glen Park library. MR. TURNER: The government offers 128D into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 128D received in evidence)* Q. So you say you went inside the library? A. Yes. Page 387 Q. And the patron area is located where? A. As you enter into the library, the stairs go immediately to the right and go up into the library. Q. So could you look at 128F, please. Do you recognize this document? A. I do. Q. How do you recognize it? A. It's the stairway going up inside the Glen Park Library. MR. TURNER: The government offers Exhibit 128F into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 128F received in evidence)* Q. Is this where you go after you enter the library? A. Yes. Q. And who is with you at this point? A. Special Agent Chris Tarbell. Q. Do you still have your computer open at this point? A. I do. Q. Are you still logged onto staff chat? A. I'm still connected to the Internet and still logged into the staff chat. Q. Had you heard anything from Dread Pirate Roberts since you sent those last two messages? A. There were no replies, no. Page 388 Q. And at any time at this point if DPR had tried to respond to your last chat message, would you have received it on your screen? A. Yes, I would have. Q. What happened next? A. As I was standing on the stairs with Agent Tarbell, the other agents inside that effected the arrest brought Mr. Ulbricht to us in handcuffs and turned him over to Agent Tarbell. And I then shut my laptop and put it in my book bag and then escorted Mr. Ulbricht and with Agent Tarbell down the stairs of the library. MR. TURNER: Could you pull up, Mr. Evert, 129C, please, and could you zoom in at the end of the chat there. Q. Is the time when you shut your laptop that you just described reflected anywhere in the chat? A. Yes, it is. Q. Where is it reflected? A. It says you have disconnected at 10:16:36. Q. Okay. So what did you see -- excuse me. What did you do next? A. After I disconnected and we escorted Mr. Ulbricht downstairs, Agent Tarbell performed a pat-down search of Mr. Ulbricht. And then I waited there for about a minute or two before another agent came from downstairs and I asked him to stay with Mr. Ulbricht and Agent Tarbell so I could go upstairs into the library. And I wanted to go up there so I could see if there was a computer and if there was anything on that computer. Page 389 Q. So then what happened next? A. So I entered the library. And I proceeded into the library and I saw from a distance a computer scientist Tom Kiernan sitting at a seat in the library. So -- and he had a laptop in his lap. And so I proceeded to him and sat down next to him and observed the computer. And I saw on the computer screen the same chat that I had with Dread Pirate Roberts minutes earlier. Q. What was Tom Kiernan doing exactly? A. Tom Kiernan had his Blackberry phone out at the time. He was taking photographs of the computer screen. Q. Could you take a look at what's been marked as Government Exhibit 201H, please. Do you recognize what's on this photograph, this document? A. Yes, I do. Q. How do you recognize it? A. It's the computer screen that I saw in the library the day after I had met up with the computer scientist Tom Kiernan. Q. Did you take this photograph? A. No, I did not. Q. Does it fairly and accurately depict what you remember seeing on the screen? Page 390 A. Yes, it does. MR. TURNER: The government offers 201H into evidence. THE COURT: No objection? MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201H received in evidence)* MR. TURNER: Could you zoom into the box here. Mr. Evert, could you compare that side by side with Exhibit 129C and zoom in here, please. Q. So what are we looking at on the left side? A. On the left side was what I saw on the computer in the library and on the right side is my chat. Q. And how do they compare? A. They're identical. Q. Identical except for what? A. Except for -- instead of "dread" it says "me," but then my username cirrus is the same on the other screen and the colors are different. Q. Just to be clear for the record, it says "me" on which copy of the conversation? A. On the left-hand side. Q. The image of the computer that Mr. Kiernan was taking photographs of? A. Yes. Q. Could you take a look at Exhibit 201I, please. Page 391 A. Okay. Q. Do you recognize this document? A. I do. Q. How do you recognize it? A. Again, it's the computer that I saw in the library. Q. And again, did you take this photograph? A. No, I did not. Q. Does it fairly and accurately reflect what you remember seeing on the screen? A. Yes, it does. MR. TURNER: The government offers 201I into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201I received in evidence)* MR. TURNER: Could you zoom into here, Mr. Evert. Can you put it on the bottom half of the screen. The top half. It doesn't matter. Mr. Evert, before you do anything else, can you zoom in here, the last line of the chat. Q. The last line that you sent to Dread Pirate Roberts was "there was the one with the atlantis," right? A. Yes. Q. What did that refer to again? A. It referred to a flagged message that I was asking Dread Pirate Roberts to look at. MR. TURNER: Mr. Evert, can you put 129D down at the bottom of the screen and zoom in here. Page 392 Q. Do you remember this exhibit from yesterday? A. Yes, I do. Q. Where did this exhibit come from down at the bottom of the screen? A. This is the flagged message page from the admin panel that I took. Q. That you took from your computer? A. Yes. MR. TURNER: Can you back out of the top, Mr. Evert, and zoom in here. Q. Did you see that same post on Mr. Ulbricht's computer that you had directed DPR to look at? A. Yes, I did. Q. Could you take a look at what's been marked as Government Exhibit 201J? A. Okay. Q. Do you recognize this exhibit? A. Yes, I do. Q. Is this a photograph that you took? A. No, it's not. Q. Does it fairly and accurately depict something that you saw on Mr. Ulbricht's screen that day? A. Yes, it does. MR. TURNER: The government offers 201J into evidence. Page 393 MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201J received in evidence)* MR. TURNER: Can you zoom into here, Mr. Evert. Q. What are we looking at here? A. This is what I observed on the computer that showed the account was logged in as dread at the dot-onion address for the staff chat. MR. TURNER: Can you compare that with 129B, Mr. Evert. Q. And where is this image from? A. This is from my computer. Q. And this was the status window you used to check on DPR's online activity? A. Yes, it was. Q. How does the dread username compare to the dread username you saw on the screen here? A. It's the same. Q. And the avatar? A. It's the same. Q. And what program was this that was open on Mr. Ulbricht's laptop? A. That would have been Pidgin. Q. How do you spell that? A. P-I-D-G-I-N. Page 394 Q. Do you remember yesterday we looked at the chat instructions that DPR had given you on how to set up staff chat? A. Yes. MR. TURNER: Mr. Evert, can you pull those up. It's Government Exhibit 127 right here. Q. "Hey, we're all on a more secure chat channel. Here are the instructions for joining in: Download and install Pidgin." Can you go down to the bottom of this message. "add buddy dread@." Is this the same dread username you saw again from Mr. Ulbricht's computer? A. That is. Q. So about how long were you -- did you spend looking at the computer while you were at the upstairs of the library? A. Only a few minutes I was up there. Q. And what did you do after you were done? A. After that, I went back downstairs out of the library and met back up with Special Agent Tarbell who at that point, with several other agents, they had Mr. Ulbricht inside a car sitting in there, and then I observed him read Mr. Ulbricht his Miranda rights. Q. What happened next? A. And then near that area, too, the rest of the team that was there that was going to effect a search warrant then on Mr. Ulbricht's residence was meeting up, and we basically talked about how we're going to go over to the house and approach it. Page 395 Q. What house? A. Mr. Ulbricht's residence. Q. And why were you going there? A. To effect a search warrant. Q. So what happened next? A. I then -- I left that area and drove over to Mr. Ulbricht's residence. I parked outside down the street from the residence and I waited for the rest of the team to arrive. Shortly thereafter, the computer scientist Tom Kiernan and another agent arrived in a separate car, and I joined them in their car. And agent -- or computer scientist Tom Kiernan still had the computer with him at the time. Q. And what was he doing with it at the time? A. He was still taking photographs of it. Q. And what happened next after you joined him in the car? A. I asked him whether or not he could click back on the browser that was on the flagged message page to see if there was anything before that, and I was asking that because I know -- Q. Let me interrupt you. Click back on the browser, what do you mean by browser? A. It was the Tor browser that was up, the web browser. I wanted to see if they'd hit the "back" button to see the previous pages that might have been visited on that browser. Page 396 Q. What was on the browser when you saw it in the library again? A. It was on the flagged message page. Q. The one with the Atlantis reference in it? A. Yes. Q. And why did you want to hit the "back" button on the browser? What were you trying to learn? A. I know from my account from when I access that page I had to be logged in under my administrator account. So I wanted to see what account he used to enter into that flagged message page. Q. So what happened next? A. So when he clicked "back" on the browser, it then took to the support page, which you would use to click to get to that flagged message page, so the support admin panel came up on the screen. Q. Would you take a look at Government Exhibit 201K, please. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. What is it? A. This is what appeared on the computer when the computer scientist Tom Kiernan hit "back" on the browser. This is the support page. Page 397 Q. Did you take the photo? A. No, I did not. Q. Does it accurately and fairly reflect what you remember seeing on the screen? A. Yes, it does. MR. TURNER: Government offers 201K into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201K received in evidence)* MR. TURNER: If we could zoom into this part here. Q. What are we looking at again? A. This is, again, the support panel that you use to access the flagged message page that I was responsible for moderating. MR. TURNER: Could you put 127D below that, Mr. Evert. Q. What is 127D again? A. That was the screen shot that I took when I originally got access to that support panel. MR. TURNER: Could you go back to 201K, Mr. Evert, and can you zoom in up here. Q. What's the little icon here next to "support"? A. That would be the "back" button. Q. The little icon above the "back" button? A. Oh. I'm sorry. It's that's the man on the camel, the green logo. Page 398 Q. From what? A. From Silk Road. Q. And the web address, do you recognize that? A. Yes, I do. Q. What is it? A. It's the Silk Road's market URL. Q. And it has the slash support? A. Yeah, the forward slash support is what you would type in or what I'd type in to access that page. Q. And what is this over here? It says SR? A. It's a folder that says SR. Q. So, did you go back any further in the browser? A. Yes, we did. Q. Could you take a look at Government Exhibit 201L. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's a what appeared on the screen on the computer after we hit "back" again. Q. This is the second time you hit "back"? A. Yes. Q. Did you take this photograph? A. No, I did not. Q. Does it fairly and accurately reflect what you remember seeing on the screen at this point? Page 399 A. Yes, it does. MR. TURNER: The government offers 201L into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201L received in evidence)* MR. TURNER: Mr. Evert, could you try zooming in here, including the address bar. Q. Had you ever seen this page before? A. No, I have not. Q. Just to be clear, you hadn't at the time, right? A. Well, previous to that, no, I had never seen it -- never saw that screen before. Q. And the address at the top, what did it say this time instead of "support"? A. It says the silkroadmarket.onion/mastermind. Q. And there's some names under here: Inigo, libertas, cirrus. Tell us who those are. A. Those are the other support staff members minus samesamebutdifferent. Q. Do you know whether DPR ever kept track of your time on the site? A. After that I knew. MR. TURNER: Can you back out, please. Can you zoom in here. Page 400 Q. Could you read off what it says here? A. It says escrow db in parenthesis USD. And then a number $4,146,736.57. And then in parenthesis, it's bitcoins 30,951.60. And then there's escrow db, which is 22,234.91 bitcoins, and accounts db, which is 180,448.96 bitcoin. Q. And from your experience working on the support staff at Silk Road, do you know whether at any given time on Silk Road there were various pending transactions into the escrow system of Silk Road? A. There were. MR. TURNER: Could you back out and zoom in down here. Q. The bottom: Unshipped, in transit, resolution. Can you remind the jury what those categories relate to with respect to Silk Road? A. The listing, when you place the order, it would say "processing." And then once a vendor will mark it as being shipped, it will say "in transit." So -- and then if -- there is resolutions as well. There would be -- there's a resolution mode for any order that you placed you can put into resolution. Q. To put into resolution means what again? A. It means to try to resolve basically a package that didn't arrive or a claim that it wasn't shipped. Q. Could you take a look at -- well, let me ask you, did you go back any further or was this it in the browser? A. No. I hit "back" again on it. Page 401 Q. Could you take a look at Government Exhibit 201M. A. Okay. Q. Do you recognize this page? A. Yes, I do. Q. How do you recognize it? A. It's what appeared on the screen after I hit "back" again. Q. Did you take this photo? A. No, I did not. Q. Does it fairly and accurately reflect what you remember seeing? A. Yes, it does. MR. TURNER: The government offers 201M into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201M received in evidence)* MR. TURNER: Could you zoom into this corner, Mr. Evert. Q. So what are we looking at here? Do you know? A. This is that same URL, the silkroadmarket URL, forward slash support, forward slash landing. This is the same page that appeared on my screen when I was given directions by Dread Pirate Roberts to access the support panel. He gave me that URL and this was the screen that appeared that I put in my username on the left and my password on the right before I could go. Page 402 MR. TURNER: Mr. Evert, could you put that on top and on the bottom, could you bring up 127C, please. Could you zoom into the area of that hyperlink. Q. Do you remember 127C, an exhibit that we looked at yesterday? A. Yes, I do. Q. Can you remind the jury what it is. A. It was a chat that occurred between myself and Dread Pirate Roberts on the staff chat where he gave me instructions and gave me more authority to access the support admin panel on the marketplace. Q. And at one minute, 14 seconds -- excuse me -- at 01:14:24 it says "dread: Now go to," and then it provides the silkroad.onion address/support/landing, is that the page that we see here up top? A. Yes, it is. Q. And then it says "and enter your user and pass and let me know what happens." So if you were on the page, what username would you enter there? A. On the left-hand side, I would have entered in "cirrus." Q. And what username did you see when you hit the "back" button on Mr. Ulbricht's computer? A. Dread Pirate Roberts. Q. And what did that indicate to you? Page 403 A. That the person had signed into that computer using Dread Pirate Roberts. Q. So what happened next after you were in the car looking at the computer? A. The rest of the team for the search warrant arrived and we effected the search warrant on the home. Q. What type of residence was it? A. It was a multifamily home, like a multiflat. Q. Would you take a look at what is marked as 130A as in apple. A. Okay. Q. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It's the outside of Mr. Ulbricht's home. Q. Did you take the photo yourself? A. No, I did not. Q. Does it fairly and accurately reflect the residence as you remember it? A. Yes, it does. MR. TURNER: The government moves 130A into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 130A received in evidence)* Q. Which one is it on here? Page 404 A. It's this one right here. That's the front entrance. Q. The brown one? A. Yes. Q. So did you personally participate in the search? A. Yes, I did. Q. Were you able to locate the defendant's bedroom in the residence? A. Yes, I was. Q. How were you able to identify his bedroom? A. There were personal effects in the room that belonged to Mr. Ulbricht. Q. Such as what? A. There was a driver's license, a passport, as well as credit cards and other bank statements. MR. TURNER: May I approach. THE COURT: Yes. Q. I'm showing you what's been marked as Government Exhibit 134A. Do you recognize the document? A. Yes, I do. Q. And what is it? A. It's Mr. Ulbricht's U.S. passport. Q. Could you take a look at what's been marked as Government Exhibit 135 -- I'm sorry -- Government Exhibit 134. A. Okay. Q. Do you recognize those documents? Page 405 A. Yes, I do. Q. How do you recognize those? A. It's photographs of Mr. Ulbricht's U.S. passport and the pages contained therein. Q. Did you yourself take those photographs? A. No, I did not. Q. Do the photographs accurately reflect the pages of the passport? A. Yes, they do. MR. TURNER: The government offers Exhibits 134 and 134A into evidence. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 134, 134A received in evidence)* MR. TURNER: Could you publish Exhibit 134, Mr. Evert, and can you go to the second page. Q. In looking at the passport, can you tell where the travel markings are from here from the top half? A. Yes, I could. It's from Dominica. It's entry and exit stamps. Q. What is Dominica? A. Caribbean country. Q. And what are the dates of the travel indicated, the enter and exit? A. There's -- the blue stamp on the left -- on the right, sorry -- is an enter stamp and it's from November 15, 2012, and the stamp on the left is an exit stamp from Dominica from December 4, 2012. Page 406 Q. Did you find anything related to Silk Road in the bedroom? A. Yes, I did. Q. What did you find? A. In the trash, there was, in the bedroom, I located the rest of Mr. Ulbricht's belongings. We found -- there was a paper that was crumpled up in the trash, two yellow sheets of paper that contained writing on it that I recognized as things that were similar to Silk Road. Q. Did it say the Silk Road -- did the paper have the words "Silk Road" written on it? A. No, they did not. Q. So what enabled you to make the link that it came from Silk Road? A. There was language on it such as, like, talking about transactions and buyer weights and ratings; and there was also, like, a way to, like, rate the users on Silk Road that I recognized as well, language that was similar to that. Q. How did you recognize it? Was there something going on on Silk Road with respect to the rating system? MR. DRATEL: Objection; leading. THE COURT: Sustained. MR. TURNER: I'll rephrase. Page 407 Q. How did you recognize it as being related to anything going on at Silk Road at the time? A. There was a -- they were fairly recent, within early September, talks from Dread Pirate Roberts about revamping and redoing the buyer rating system on Silk Road. So there were discussions that were openly talked about by Dread Pirate Roberts about redoing that system. Q. Can you take a look at Government Exhibit 130, please. A. Okay. Q. Do you recognize these pages? A. Yes, I do. Q. How do you recognize them? A. These were the sheets of paper that we found in the trash. Q. Did you personally participate in that seizure? A. I was. I witnessed it happening; yes. Q. So there are two pages at issue? A. Yes. MR. TURNER: The government offers Exhibit 130 into evidence. MR. DRATEL: The previous objection, your Honor. THE COURT: All right. Government Exhibit 130 is received. The objection is overruled. *(Government's Exhibit 130 received in evidence)* MR. TURNER: Mr. Evert, can you publish Exhibit 130. First of all, can you zoom in on the very top. Page 408 Q. There's, sort of, an algebraic formulas up top. Do you see that? A. That would be accurate. MR. TURNER: Zoom out and zoom into this area. Q. Okay. Can you make out what it says there starting with "ratings"? A. Yeah. It says ratings, then buyer weight at time of purchase X TX size X and age factor, followed by calculate on page load and generate bars. MR. TURNER: Can you highlight "generate bars and ratings," Mr. Evert, and then put that on top. Q. Now what I'd like you to do is take a look at Government Exhibit 131. Do you recognize what these pages are? Where they're from? A. Yes, I do. They're screen shots that I took of posts made by Dread Pirate Roberts on October 6, 2013. Q. And what do the posts concern? A. These had to do with the overhaul that Dread Pirate Roberts was discussing in the feedback and the buyer ratings. MR. TURNER: Mr. Evert, could you put up page three of Government Exhibit -- I'm sorry. The government would move Exhibit 131 into evidence. MR. DRATEL: Objection on hearsay grounds and Vayner. THE COURT: The objections are overruled. Government Exhibit 131 is received. Page 409 *(Government's Exhibit 131 received in evidence)* MR. TURNER: Mr. Evert, can you zoom into just the first paragraph in the heading. Q. So the date of this post is August 11, 2013, correct? A. Correct. Q. And the title is "feedback system overhaul," right? A. Yes. Q. And it says, Update 08/18/2013 2213 UTC. Wow! So much feedback and ideas for ratings. I think this will be a major focus for a while until we can really flesh everything out so both vendors and buyers can have all of the information and tools they need to decide who they want to work with. At this point, there are so many things to do, we have to start thinking about what order to do things and how to transition. Everyone responds to change either positively or negatively, and I'll keep doing my best to keep the negative to a minimum. Can you scroll down a little bit, Mr. Evert. Can you zoom back in again. Great. Can you zoom in right here. All right. You see at the top it talks about ratings and it says calculate on page load and generate bars. Update 2028 UTC: Okay, I've rolled out the first set of major changes. We've done away with a percent based rating score entirely and are now displaying the ratings as a bar chart that shows the relative weight of each rating category (one through five) and a total average. Page 410 Could you go back up to the document here in the top and scroll down. Maybe could you pull out a little bit and expand. Can you highlight buyer weight, vendor weight, sales volume, age factor. And now can you scroll down here and open that up more, please. And go down here starting with the long line of text: So here's what we have so far. I want to rework how both buyers and vendors are related. We've identified six critical dimensions that I think effect how SR users should be judged, they are... Mr. Evert, I want to point out buyer weight, account age, vendor weight, total sales volume. Now, was this the only post that DPR made on August 2013 about revising, overhauling the rating system? A. No, it was not. THE COURT: Is this a good time that we can make our mid-morning break, Mr. Turner? MR. TURNER: Five more minutes along these lines -- THE COURT: Why don't we take a break right now if it's going to be five minutes. Ladies and gentlemen, we'll take our mid-morning break. I want to remind you not to talk to each other or anybody else about this case. Thank you. *(Jury excused)(Continued on next page)* Page 411 *(In open court; jury not present)* THE COURT: You can take a break yourself. THE WITNESS: Thank you. *(Witness temporarily excused)* THE COURT: The reason for the break right then was one of the jurors made eye contact and indicated that he wanted a break. MR. TURNER: Sorry for not picking that up. THE COURT: That's okay. Because sometimes when I've been just trying to find the right time, having you continue to a logical end is neither here nor there for me. I'll use this opportunity to address two of the objections that I overruled, both as to GX 130 and GX 131. In the Court's view, neither of those were being offered for the truth and therefore the hearsay objection would not be a relevant objection. In terms of I think the venue which you mentioned as to 131, Mr. Dratel, that was addressed in my in limine motion. Did you mean Vayner? MR. DRATEL: I said Vayner. I'm sorry. THE COURT: You said "venue." All right, Vayner. For the Vayner, then my ruling would be similar to that from yesterday, which is, these documents that we have gone through all have been appropriately authenticated as the require; so therefore, the Vayner objection would not be appropriate or would not be sustained. Page 412 MR. DRATEL: When they come back out, would the Court instruct the jury about 130, 131 about not for the truth, your traditional instruction in that regard? THE COURT: Sure. I'm happy to go through and to do that. MR. DRATEL: Thank you. THE COURT: I think it's obvious because it's not about whether or not -- it's just for the fact that the words "buyer weight, vendor weight" was on the page, not whether or not they were, in fact, ultimately taken into consideration. MR. TURNER: I don't think there's any unique statement on the document that can carry any truth value. THE COURT: That's sort of my point; yes. But nevertheless, I'll just indicate that those are not for the truth. If Mr. Dratel would like that, I'm happy to do that. MR. DRATEL: Thank you. THE COURT: Is there anything else that folks would like to raise before we take own break. MR. DRATEL: There's one issue. THE COURT: At the side bar, sure, come on up. *(Continued on next page)* Page 413 *(At the side bar)* MS. LEWIS: I wanted to bring it to the Court's attention that I may have inadvertently addressed -- I walked into a crowded subway car at Union Square and I saw there was woman behind me. And seeing a juror in the courtroom makes me think it may have been her. THE COURT: All right. MS. LEWIS: Such is life. THE COURT: Thank you. Thank you for disclosing that. MS. LEWIS: That was all. THE COURT: It's life in the New York City subways at rush hour. Is there anything anybody thinks needs to be done? MR. DRATEL: As long as it wasn't a New York Post reporter behind her. THE COURT: I think we're all set. Does anybody want the Court to do anything with that? MR. TURNER: No. THE COURT: Thank you. Let's take our own break for a few minutes before we resume. *(Recess)* *(Continued on next page)* Page 414 *(In open court; jury present)* THE COURT: Now, one thing I wanted to mention before we continue is there were two documents that we were just hearing testimony with respect to. One was the photograph of the crumpled notes, that's GX 130, and the other was the buyer ratings. What would you call it? Posts? MR. TURNER: Yes. THE COURT: The posts at Government Exhibit 131 that the government and the witness were going back and forth on, these are not offered for the truth as to whether or not, for instance, the calculation that was put forward, in fact, is the right calculation or the truth of any of the information. It's just for the fact that these words appeared on the page. Mr. Turner, you can go ahead and continue. MR. TURNER: Could we put Government Exhibit 131, the page back on the screen, please. You can publish the whole page. Zoom in there. We were just looking at these references to buyer weight, account age, vendor weight, sales volume, etc. Mr. Evert, can you scroll all the way down to the bottom of the message. Q. "There are a couple of other changes I have in mind, but this post is already getting long and complex, so let's leave it at that. I look forward to hearing your feedback." MR. TURNER: Could you now put up page two of the exhibit, please. Page 415 Q. So this is a forum post approximately 20 days later. Is that right? A. Yes. Q. It says more updates and ratings and reviews overhaul. And I'll read a few lines of it: The latest, the buyers may remove a weighting and/or review from the recent orders link on their account pages. The price of the transaction has been obscured in the same way that buyer stats are when the review is displayed. The style has been slimmed down further. Buyer weight now has the same freshness factor included in the rating and vendor weights (old transactions don't count as much toward a buyer's weight.) Was this a continuing topic of discussion in the forum posts around this time? A. Yes, it was. Q. So now let me go, please, to page one of the exhibit. So this the approximately 12 days later? A. Yes. Q. And it says: Buyer ratings September 12, 2013. Let's see more -- excuse me. Let's see, where were we? Oh, yeah, ratings and review overhaul. There's an emoticon there. Can you focus in on what's been marked with that has the paragraph two number on it. Page 416 It says labeling four of five as "solid, would recommend" is bringing down my average. And that's in quotes. Then it says don't worry, it's a level playing field and all vendors are experiencing this. The net effect is to give more info to buyers, distinguishing "solid" vendors from "outstanding" ones. Can you just explain what this photograph is about? A. This is in reference to the marketplace when a buyer would leave a rating for a vendor, they could label them one through five basically as far as five being the highest. And he's talking about marketing or trying to make sure you could differentiate between them being outstanding or just so-so, I guess. *(Continued on next page)* Page 417 Q. OK. And the quote here, was this like a comment that somebody had made previous to the post, the "labeling 4 of 5 as 'solid, would recommend' is bringing down my average"? A. I don't recall the previous messages on the post. Q. OK. Did you find -- well, you said before there were two pieces of paper you found in the trash? A. Yes, there were two sheets. MR. TURNER: Could you put up Government Exhibit 130, page 2, on the bottom, Mr. Evert, and keep that same thing up on the screen. Could you zoom in here. Q. OK. This is the second piece of scrap paper that you found in Mr. Ulbricht's bedroom, in the trash? A. Yes, it was. Q. And the top line says: "5- Wow! Outstanding. "5 - Wow! Best of the best." MR. TURNER: Can you highlight "outstanding" there, Mr. Evert and "outstanding" up here. Q. "4 - solid, would recommend." Can you highlight that? "3 - Meh, they're OK, I guess. "2 - definitely needs improvement. "1 - Never again!" Do you recognize some of this specific terminology from Silk Road? A. Yes, I do. Page 418 Q. How do you recognize it? A. It was similar exactly to what Dread Pirate Roberts said in his posts. MR. TURNER: Could you cut out to the first page of Government Exhibit 130, full screen, please, and zoom in here. Q. So what was down in the middle of this page? A. It was a name and a telephone number below it. Q. And the name is? A. Danielle. Q. And there is a phone number here. MR. TURNER: And, your Honor, just to make the record clear, we've redacted it from the screen but not from the paper copy that will be available to the jurors? THE COURT: All right. Q. So after you were done with the search, did you ever log back into the chat channel you had been communicating with Dread Pirate Roberts on prior to the defendant's arrest? A. Yes, I did. Q. First talk a look, actually, at Government Exhibit 129E, as in Edward. Do you recognize this document? A. Yes, I do. Q. How do you recognize it? A. It is a screenshot of my entire computer screen I took on October 2, 2013. Page 419 Q. That is the day after the arrest? A. Yes. MR. TURNER: The government offers Exhibit 129E into evidence. MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 129E received in evidence)* MR. TURNER: Could you zoom in here, Mr. Evert. Q. So up 'til now we've seen a copy of that chat log in the log forum. Is this how it looked on your computer? A. This is how it looked on my computer. MR. TURNER: Now could we go back to the log screen at 129C, please. And go down just to the bottom part here. Starting a little bit farther up, starting with "Dread." Q. OK. So the conversation, again, left off at 10:14 with you saying, "There was the one with the Atlantis." You disconnected at 10:16. Now, if the Dread Pirate Roberts had ever tried to respond to your last message after you disconnected, would you have had any way of receiving that message? A. The message would have came the next time I logged into the server. Q. And when was the next time you logged into the chat server? A. At 3:32 a.m. Q. UTC? Page 420 A. UTC -- 3:33, sorry, a.m. Q. That would have been at 8 p.m. the night after the arrest? A. Yes. Q. Had you received any reply from the Dread Pirate Roberts by that point? A. No, I had not. Q. All right. Did you login subsequently after that? A. I did login after that. Q. When was the next time you logged in? A. Again, I believe hours later, so 7:19 a.m. Q. About midnight that night? A. Yes. Q. Still no reply? A. No reply. Q. Was the Silk Road website still operational by this point? A. Yes, it was. Q. When was it shut down? A. October 2nd, around -- I think like around 10 a.m., I want to say, 11. Q. So the following day? A. I believe so. Q. And when was the defendant's arrest made public? A. At that time. Q. At what time? A. Around 10/11 a.m. Pacific. Page 421 Q. October 2nd? A. Yes. Q. All right. So up until that time, did the defendant -- excuse me, up until that time, from between the time when the defendant was arrested to the time when the site was shut down and the arrest was made public, did Dread Pirate Roberts ever respond to your last chat message? A. No, he did not. MR. TURNER: That is all I have, your Honor. THE COURT: All right. Thank you. Mr. Dratel. MR. DRATEL: Thank you, your Honor. CROSS-EXAMINATION MR. DRATEL Q. Good morning, Agent Der-Yeghiayan, is that right? A. It is right, yes, sir. Q. Why don't we talk about the PGP demonstration, the key that you did this morning. A. OK. Q. And just initially, there were forum posts, weren't, there's, that people couldn't validate with the public key, correct? A. That's correct. Q. And a private key, which you talked about, is just a block of text like the public key that you showed, correct? Page 422 A. Correct. Q. And when you use the term own a private key, you just mean have possession of that block of text, correct? A. That is correct. Q. So it could be cut and paste and sent to someone else, correct? A. Yes, it can. Q. It could be shared by the person who generated the key, correct? A. That is correct. Q. It could be stolen -- A. Yes. Q. -- correct? It doesn't have to be the same person who uses that private key from message to message much less year to year, right? A. It doesn't have to be, no. Q. And it doesn't have to be the same device that uses that key from message to message, from month to month, year to year, correct? A. That is correct. Q. It is really the block of text. It is not whether it is a laptop or a desk-top or a phone or anything like that, right, it is the block of text that counts, right? A. It is universal, yes. Page 423 Q. So the only thing that you know when you verify is that you're communicating with someone who is using that block of text, correct? A. That is correct. Q. It doesn't have to be the same person from message to message, just a person who is using that block of text? A. And let me clarify. It is the same text and there is also a password that is associated with utilizing that private key as well, too. Q. Right. But the same thing. The password is just like any other password? It could be typed in? It could be shared? It could be sent? It could be cut and paste? Right? A. That is correct. Q. It could be hacked, right? A. Yes. Q. So I just want to go back to that question. So the only thing that you can verify is that you're communicating with someone who has that block of text and can enter the password? A. That is correct. Q. And these keys can be passed on, correct, from person to person? A. It can be shared, yes. Q. In that way it is not really any different on a certain level than a car key, right? It can go from driver to driver and you operate the car, correct? Page 424 A. Well, it can but it needs a password, too. Q. Right. So if you had to, let's say, enter something into a car like on a punch key or something like that, it would be the same difference, right? All you had to do is a password? A. It would be key plus the password, yes. Q. Yes. The same thing if the office manager retires and has the key to the file cabinet and there is maybe also not only the key but also a little keypad on it and the next office manager comes along and says here's the file key and here's the code for the key punch, right? A. That is correct. Q. Now, what you showed us on the exhibit was that the key was created April 1, 2011, correct? A. That is correct. Q. And it wasn't created as Dread Pirate Roberts, right? There is nothing about that key that says Dread Pirate Roberts, right? A. That is correct. Q. It says Silk Road, right? A. Yes. Q. By the way, the person who creates that key would still have the information -- even if it was passed on, they still have that block of text, right? A. I'm sorry. I am confused. Page 425 Q. Let me go through it again. The person who created the key, generates the key, created the key, they would retain that block of text forever, essentially, right? A. They could save it, yes. Q. Right. Even if someone else was using the key, even if they passed on -- the office manager could have made a copy of the file key, right -- of the file cabinet key, right? A. Right. There could be multiple copies of a private key that multiple people can have. Q. And multiple people could use it at the same time? A. They could, yes. Q. Message to messaging? A. They could. Q. You talked about Dread Pirate Roberts and the movie "The Princess Bride," right? A. Yes. Q. In fairness to the author, you know it was also a book originally? A. It was a book, yes. I didn't read it, though. Q. Part of that legend is continuity, right? A. Yes. Q. And the continuity being that the essence of the personality stays the same, correct? A. Yes. Page 426 Q. And if the key changed -- withdrawn. If DPR had changed over time and the private key changed over time, that would ruin that continuity, wouldn't it? A. That would create some doubt. Q. In fact, you yourself thought that DPR changed over time, didn't you? A. There are times that there was writings that would make me think that, yeah, it potentially was a different person. Q. And even as late as August of 2013, you thought that DPR had changed in April of 2013, didn't you? A. There was discussions that I had had with another moderator who was convinced that it was a new DPR. Q. But you told people inside your organization, Homeland Security Investigations, that DPR -- you believed that DPR had changed in April of 2013? A. There -- if there is anything that you could refresh my memory? MR. DRATEL: Sure. Just for the witness, 3505-787. *(Pause)* Your Honor, I understand it can't be done electronically from our position. I guess only from the main -- I will just show him. THE COURT: I think it is fine if you just show it in hardcopy to the witness, and let the government know what you are turning his attention to. Page 427 MR. DRATEL: Yes. It is 3505-787. *(Handing)* THE WITNESS: Thank you. MR. DRATEL: Obviously, just read it to yourself, the top part. Q. And so in August of 2013, you expressed your opinion that DPR had changed in April of 2013? A. I'm not sure if the April I was referring to was 2012 or 2013. The April might have been from 2012. Q. But it is April? A. April. Q. I'm sorry. The email is August of 2013, correct? A. Correct. Q. And you talk about someone with a screen name who you thought might have been the previous DPR, right? A. There is another profile that was administrator on Silk Road as well. Q. And you thought that even though you knew that the private key was the same as it always had been, right? A. That's correct. Q. You thought there was a different DPR notwithstanding the continuity of the private key? A. There was conversation that would change, and it would be similar in a lot of ways but there would be other things that would make us think that potentially there might have been a different person behind it at different times. Page 428 Q. What I'm saying is even notwithstanding this same private key throughout, you expressed an opinion in August of 2013, basically two months before Mr. Ulbricht's arrest, correct, that DPR had changed in April, and now you don't know whether it is 2012 or 2013 in April, right? A. Correct. I think it was April of 2012, though. Q. But it doesn't say 2012, does it? A. No. Q. That is not what you put in your email, right? A. It says just April. Q. Right. In August of 2013, right? A. I don't think it is April 2013. Q. No. No. what I am saying is the email is August of 2013? A. August, yes. Q. And when you say it changed in April, you didn't say April a year ago, you said April, right? A. Yes. Q. Have you taken any acting courses? A. No, I have not. Q. What kind of computer training have you had? A. Just the basic stuff that we had from the academy. Q. What did that include? A. There are various courses on -- just basic computer classes for maintaining evidence and also documenting things as well as we also have for submitting subpoenas and things that are related to computers and investigating computer crimes, just a basic overview course. Page 429 Q. OK. So nothing about computer deception, right? A. No. Q. Nothing about how to assume an online identity different from your actual identity, right? A. No. Q. But you were able to do that flawlessly, right? A. Yes, I was. Q. You operated a number of accounts, maybe two dozen over time, maybe more, right, on Silk Road at some point or another? A. I'm not sure of the exact number but there was over a dozen. Q. And you were an administrator communicating directly with Dread Pirate Roberts every couple of days, right? A. That is correct. Q. Communicating with the other administrators -- inigo, libertas -- right? A. Yes. Q. Anybody else, administrators who you communicated with? A. The same thing but different. Q. And they never -- withdrawn. Yes. They didn't know that you were a law enforcement agent? Page 430 A. No, they did not. Q. Dread Pirate Roberts didn't know you were a law enforcement agent? A. No, he did not. Q. None of the people you interacted with on the vendor support or any kind of other -- with Silk Road users, none of them knew, right, that Cirrus was a law enforcement agent, right? A. That is correct. Q. Without any training, you were able to do that? A. Yes. Q. You had multiple persona at the same time, right? A. There were multiple identities that I would operate. Q. At the same time online, right? A. Yeah, during different periods. Q. And, again, without any glitch in terms of you never gave it away; no one ever said, oh, I know you're a cop, get off the site, right? A. No. Q. In fact, you weren't sure yourself often who you were communicating with on the site despite their screen name, correct? A. There was always a level of distrust as to potentially who you might be talking to. So there would be ways that we would try to always authenticate one another through just different language and common things that we would say to one another. Page 431 Q. And, in fact, there were times when you taught that DPR might be operating some of the other administrator accounts, right? A. There was, yeah, there was times that we didn't know who was operating what accounts. Q. And at one point it was pretty frustrating, right, for your investigation purposes, correct? A. It was very difficult, yeah. Q. In fact, at one point you said "Who's on first," right? A. That would probably be something that I would say. Q. I mean, literally, right? A. If there was an email, yeah, I'm pretty sure, yeah. Q. OK. MR. DRATEL: May I approach, your Honor? THE COURT: You may. MR. DRATEL: It was a little more complicated than I had hoped it would be. *(Pause)* THE WITNESS: Thank you. MR. DRATEL: It is the bottom of the first page, and then it is double-sided so just flip over to the top of the next page. *(Pause)* Page 432 A. I recall this, yes. Q. So you said, "Sheesh, who's on first," right? A. "Sheesh, who's on first again." Q. Because it was a complicated situation as to whether or not someone was commandeering someone else's account and who you are actually communicating with, right? A. Yeah. Specifically in this period of time there was multiple things going on with multiple accounts. Q. And that's June of 2013? A. That was June 2013, yes. Q. And Cirrus was an account that you took over, correct? A. Yes, it was. Q. And Cirrus was originally an account that was called Scout, correct? A. Yes, it was Scout before. Q. And you ultimately cultivated Scout to give up the account, correct? A. The person that originally had, yeah, the Scout account became Cirrus originally and then gave it over to me, yes. Q. At some point because you revealed to them that you were law enforcement, correct? A. The original operator didn't know that I was law enforcement, yes. Q. No, but I'm saying at some point you did reveal it and then they let you assume their account? Page 433 A. They knew that I was law enforcement when they let me assume the account, yes. Q. In fact, you were surprised when you found out Scout was female, right? A. Yes. Q. One of your challenges in getting Scout to relinquish her account and give you access to Scout, and then ultimately to Cirrus, was how to convince Scout that you were law enforcement and that DPR was tricking her -- him you thought at the time but her and that her better option, or Scout's better option was to go with the law enforcement, you had to do that online in a way that didn't impair the investigation, correct? MR. TURNER: Objection to form. THE COURT: If you understand the question, you can answer it. A. I -- Q. I will break it down. A. I guess the response is that I wasn't -- I didn't portray myself as law enforcement to Scout. That was another agent that did that. I had another account at that time that I was utilizing to talk to Scout that they did not know -- I wasn't portrayed as law enforcement. Q. But that was a challenge for the investigation, correct, as a whole? A. A challenge, I'm sorry, to? Page 434 Q. To convince Scout, whether it was you or a colleague of yours, to convince Scout that DPR was tricking Scout and that Scout's better option was to essentially align with law enforcement? A. That was another agent's goal with another account that they were utilizing. My particular goal with the account that I was utilizing was to try to get Scout to buy something from me which would then result in exchanging their name and address. Q. Right. That is ultimately what happened, right? A. That is what happened. Q. I'm saying, the other agent's challenge was this other aspect of trying to do something online that would convince Scout to essentially relinquish her account to law enforcement? A. Correct. Q. I want to go back to the beginning of your testimony. And the first time that any of this came on the radar at Chicago O'Hare International mail was June of 2011? A. It was roughly the first time that I saw a few of the packages that contained ecstasy. Q. Then you started the investigation in October of 2011? A. Yes. Q. And you told us that the seizures began to increase after June 2011, right? A. Correct. Page 435 Q. Prior to that there were hardly any -- nothing to note, if there was anything noteworthy? A. That is correct. Q. In fact, by October -- in October of 2011, there were only four seizures that year. A. That month I believe that we maintained, that we held for our investigation, there were four seizures. Q. And then that multiplied by 2012 and throughout the months of 2012, right? A. Yes. They steadily increased over that period. Q. And you said you had never seen that ecstasy before, right? You testified -- A. I hadn't seen it in the mail in the letter class like that before. Q. That is right. OK. Also, these Netherlands' shippers, right? A. I had never seen packaging like that before. Q. So anything that would have happened on Silk Road before June of 2011 really would not have come to your attention at all, right? A. It potentially could have. If there was a seizure that was made, we would have been called. Q. But you don't know is what I am saying? A. I don't know, no. Q. You have no idea really where the packages -- you don't know anything about any of the transactions before June 2011? Page 436 A. I don't. Q. And you had been there for years, in some form or another, at O'Hare as either border patrol or HSI? A. Customs and Border Protection and HSI. Q. CBP? A. Yes. Q. Customs and Border Patrol. And one of the things that -- well, withdrawn. In June 2011, there was an article on gawker.com about Silk Road, right? A. Yes, there was. Q. And the traffic on Silk Road increased significantly after that, correct? A. That was about the time, yes. Q. And also there was an NPR report in October 2011, right? A. As I have been told, yes. Q. That also publicized it, and, again, you started seeing an increase in traffic? A. That was what came out of an interview, I believe. Q. Now, you talked about border authority initially. Basically, without a warrant, you have the authority to pretty much search anything that is coming in, right, to the United States? A. Yes. Page 437 Q. You say you do a lot of x-ray and other -- and canines, right? A. X-ray, canine, and then searching by hand as well. Q. Now, all of the screenshots that you put in evidence of the silkroad.onion, they are all from 2012 or later, right? A. The majority of them, yes. Actually, all of them, yes, pretty much. Q. And were you on the site at all before 2012? A. I was. Q. Late 2011? A. Late 2011. Q. After you started your investigation? A. Yes. Q. So do you know when Silk Road first began charging commissions? A. It was apparent from the beginning they started, from what I read, they were on commissions. Q. You think it is from the very start? A. I believe it was, yes. Q. Did you ever look at the initial transaction history? A. No, I didn't have that. Q. But you have it now, right? A. I have the transaction history -- Q. Yes. You have access to it, right? A. I haven't reviewed it but I have access to it. Page 438 Q. You haven't reviewed it, right. So it is your assumption that the commissions go back to the beginning? A. That is correct. Q. But you don't know for sure? A. I don't know for sure. Q. How about the escrow system, do you know when that was instituted on Silk Road? A. I believe that is from the beginning, from when we released our first buys. Q. Your first buys were when? A. I believe it was January 2012. Q. So it has already been in existence for eight/nine months already, right? A. That is correct. Q. So you don't know anything about the transactions before then with respect to an escrow system other than when you started making purchases, right? A. That is correct. Q. Do you know when Silk Road first launched its Wiki page? A. I don't recall offhand. Q. Do you know whether it was when it launched the forum, before or after? A. The forum was around June 2011. Q. Right. So do you know whether it was launched before or after the forum? Page 439 A. I don't know if it was before or after it. Q. Do you know what the seller's guide looked like in June or July or August or September of 2011, before you first got on that site? A. No, I do not. Q. Do you know what the buyer's guide looked like during that same time period before you got on the site? A. No. Q. Do you know if there was a seller's contract of the type where it says "I agree" before you got on the site? A. No, I do not. Q. Do you know when the first heroin sale on Silk Road was made? A. No, I do not. Q. Cocaine? A. I do not. Q. Do you know when Silk Road first offered forgeries? A. No, I do not -- well, actually, from the posting that was made from Dread Pirate Roberts, I can assume that that might have been when it was announced. Q. When was that? A. I would have to look back at the screenshot. Q. With respect to 116B, which is not forgeries but the hacking tools, right, there was something called an RAT? Is that a remote access trojan, do you know what that is? Page 440 A. I am assuming a trojan that you can access remotely. Q. Trojan means something you implant into somebody's computer, right? A. It is something that would conceal itself as something else as someone's computer that might be downloaded inadvertently, a program perhaps. Q. And then allow others to operate it, right? A. It could do things like that, yes. Q. This is already in evidence, Government 106, Tor. I want to talk about Tor a little bit. OK? MR. DRATEL: Would you show government's 106, please. *(Pause)* That is it. Thank you. Q. So that is the diagram where you explained somewhat how Tor operates, right? A. That is correct. Q. And if the user, let's say, on the left initiates a communication, right, that first computer is the entry node, right? A. That is correct. Q. And the one on the right, where it says "Web server (hidden service)," where it goes from that last computer to the hidden service, is an exit node, right? A. No, that wouldn't be an exit node. Q. Where were the exit nodes? Page 441 A. This isn't completely accurate. I think it is for simple use. But, generally, exit nodes are on the outside but a hidden service is generally within, and there is what is called intrapoints that protect the hidden service, which they are all relays, essentially, within Tor. Q. Right. Obviously, there is a lot more computers than this, correct? A. Yeah. There is a lot more relays and nodes. Q. That's why it works is because there are enough computers worldwide on the Tor network to permit the relays not to be traced? A. Yes. There is -- they are all documented as well. Q. And when you say "documented" -- A. There is lists of IPs for the relays and for the nodes. Q. Right. But, nevertheless, because of the way it is done, it's very difficult, if not impossible, to trace, correct? A. It is very difficult to trace, yes. Q. And some people think that by monitoring exit nodes and looking at traffic, you can find hidden services, correct? A. We thought that we could earlier on but we realized fairly quickly that we couldn't. Q. And let's try to put it in a different analogy. If you're the user on the left and you get into a car on the street and then someone sees you get into the car on the street and then you go on the highway and you stop and you change cars and you stop and you change cars and you stop and you change cars and you stop and you change cars, when you get to the destination, no one may be able to find you, right, because assuming that that -- that you are not being surveilled the whole way through, right? Page 442 A. That is a fair analogy, yes. Q. By the way, 125H, Government's 125H, just if you want to look at it, for the forgeries. *(Pause)* August of 2011. A. Correct. Q. Thank you. Now, Tor is not, as you said, not illegal. In fact, it is widely used by millions of users to access typical Internet activity, right? A. That is correct. Q. And, for example, people, let's say, Chinese nationals in China use Tor to get around governmental restrictions on their Internet activity, right? A. That is correct. Q. And you talked about torproject.org, right, which is a website on the open Web, right? A. Yes, it is on the regular Internet. Q. Ordinary Web, we'll call it, on the ordinary Internet. And that will allow you to download Tor, correct? A. Yes. Page 443 Q. And you have been on that page, right? A. Yes. Q. And so you know that Tor was originally developed by the U.S. government -- U.S. Naval research, right? A. It originally was, yes. Q. And designed for sensitive military and government communications; that's what it was designed to facilitate? A. I believe it was between Navy ships trying to create a new network to communicate between them. Q. But now it's used by not only the military, journalists, law enforcement, as I say, people in countries where Internet is restricted, right? A. That is correct. Q. It also has real-world advantages for ordinary people, right -- well, withdrawn. Ordinary people can use it so that they aren't monitored by commercial establishments, websites, and others so that they will know their buying habits and can target them for merchandising and things like that, right? A. You can use it to protect essentially your identity, yeah, and who you are. Q. So, for example, if a website uses your search history and your buying history to decide whether you should get a discount or not, depending on your buying habits and how often you buy retail and how often you use a discount, Tor could prevent them from discriminating one way or the other -- the website against a customer who uses Tor to gain access to those sites, right? Page 444 A. Yeah. They could be tracking by your IP address, and if you constantly visit certain sites it will remember you and it could learn your buying habits and things, too. So, yes. Q. So what Tor really does is prevent whoever can, or would, from monitoring a person's Internet tracking? A. It can, yes. Q. In fact, you can use Tor as a law enforcement officer to either visit a website or some other part of the Internet without the other side knowing that it is law enforcement that's viewing a page, right? A. It could be used for law enforcement, yes. Q. It is like having a No Caller ID, right? A. Right. It won't come back to an IP address that is a government IP. Q. And a lot of people got No Caller ID for that kind of reason, right? A. That is correct. Q. Now, "hidden service" just really means that it is on Tor alone, correct? A. That it is built within Tor and that is the website that it is accessible. Q. It is only accessible -- A. Only accessible on Tor, yes. Page 445 Q. It could be anything. It could be something that someone in Iran doesn't want censored, right? A. Just by being a hidden service doesn't make it illegal. Q. There is nothing sinister about that connotation, that description, right? A. That is correct. Q. Now, let's talk about seizures. And you had an exhibit with all of the boxes, right -- A. All the seizures. Q. -- that you made at Chicago O'Hare International mail of illegal -- of contraband coming into the United States, right? All of that was drugs, right? A. Yes, it was all primarily drugs. Q. And it was primarily -- withdrawn. There was nothing on the packaging that said "As advertised on Silk Road," or something like that, right? There was nothing that said it was ordered off of Silk Road, correct? A. No. I never recall seeing any envelope that said Silk Road on it. Q. So you connected them to Silk Road because you would match the product with something that was advertised for sale on Silk Road, correct? A. Yes. Q. But you don't have any proof that that was actually ordered off of Silk Road, what you seized? Page 446 A. Only what we were able to make by comparing it to our controlled purchases. Q. Right. Only the purchases that you made, right? You were able to go on the Internet, put in the information, the fake address that you used, and then it would come to that address and then you would confirm that it was off of Silk Road. But that room full of drugs, none of that is confirmed that it came off of Silk Road, right? A. There is at least one vendor that we did arrest that told us -- MR. DRATEL: Objection. THE COURT: Overruled. He can finish. MR. DRATEL: OK. A. That during a proffer later that stated -- that confirmed that several of the packages that I showed him that were part of that collection that were mailed directly from him through Silk Road. Q. And he told you that, right? A. Yes, he did. Q. OK. There were also other websites on Tor that sell drugs, right, through the mail and through -- right? Through the mail? A. There is other hidden services that would sell drugs, too, yes. Q. And some of them -- withdrawn. Page 447 So the only thing that connects all but those few that you just talked about of seizures, all that connects them to Silk Road is that those items were advertised on Silk Road, right? A. For the ones that we did, for our buys. The other ones, yeah, were comparative analysis. Q. So if I saw a book on Amazon and then I ordered it from Barnes & Noble and it came in a package that didn't say where it was -- that didn't have either -- anything on it, can you assume where it came from -- can you confirm, rather, can you conclude that it came from Barnes & Noble's or Amazon if they both sell it just because it advertises on Amazon? A. I couldn't necessarily confirm it just from looking at it. Q. It wouldn't even have to be off of sites; people could be on Tor chat or some other private messaging, PGP, Pidgin, be in direct contact with drug dealers overseas or in the United States, order drugs through the mail? A. It could have been, yeah, independent from a market. Q. What could also happen is that someone could have been on a site, any of the Tor sites, any of the hidden services that might sell drugs, purchase ones off the site and then initiate a private conversation with the person who actually sold the drugs and do all the rest of the sales privately, right? A. That is a possibility, yes. Q. And they could tell all their friends how to do it, too, right? Page 448 A. Yeah. I suppose that is possible, yes. Q. Now, at some point you stopped making seizures, right? A. Yes. Q. You had plenty, right? A. Yes. Q. We saw the room full of seizures. The highest volume was ecstasy, right? A. The highest volume for the drugs that we maintained were ecstasy. Q. By a large margin? A. By a large margin. Q. And heroin was only 261 grams, right, of heroin? A. I believe that is about right, yes. Q. And about 457 grams of cocaine, right? A. That sounds about right. Q. That is May of 2013? A. Correct. THE COURT: Let me just make sure I understand. So counsel was questioning you about the room full of boxes, is that right? THE WITNESS: That is correct. THE COURT: And your statements were in connection with the room full of boxes? THE WITNESS: Yes. Page 449 THE COURT: So is it the case that you examined the contents of each of the boxes and that based upon your examination of those contents the quantities were as you testified? THE WITNESS: Yes. THE COURT: All right. Thank you. You may proceed. MR. DRATEL: Thank you, your Honor. MR. DRATEL Q. You talked a fair amount of bitcoin in your direct testimony, right? A. Yes, I did. Q. Bitcoin was an essential element of Silk Road, right? A. That is correct. Q. And the exchanges that you talked about that were used to cash out, the ones you talked about, like Mt. Gox and others, were all on the ordinary Internet, right? A. Correct. Q. They are not hidden services, they are not on Tor? A. They are regular websites, yes. Q. And even any exchanges that were made on the page or as a result of the people who were advertising on the page that you showed in Silk Road to exchange bitcoins, all of those things, all of those transactions still wind up on the block chain, correct? Page 450 A. Not internally within Silk Road it wouldn't. If it was a transfer between one account to another, that wouldn't be reflected in the block chain. Q. No, but if you were cashing out. A. If you were cashing it out and taking it off of Silk Road, yes, that would be reflected on the block chain. Q. The block chain, again, is this public ledger, right? A. Correct. Q. That records every bitcoin transaction where -- in terms of everything that goes from bitcoin to cash, cash to bitcoin? A. Every transaction, basically just a transfer of bitcoins between one address and another is documented. Q. So even bitcoin to bitcoin? A. Everything essentially is bitcoin to bitcoin. There might be a cash transaction that occurs outside of that, but the block chain just reflects that you just moved a bitcoin from one address to another. Q. I can't take -- there is no physical bitcoin, right? A. There is things that have been made into physical form that they sell as bitcoins that have the private key on it, but it is all done electronically, essentially. Q. Right. So it -- and as of, let's say, prior to October of 2013, and even now, you can't -- I couldn't go and take a horde of bitcoins to someone and then cash it for them without it showing up on the block chain, right? Page 451 A. Right. Q. Because they are not physical, they are a digital instrument, right? A. It is a digital instrument, yes. Q. It doesn't exist outside of a digital character? A. Just those coins but they are not widely used. Q. And it was started in 2008 or so, right, it was invented, essentially? A. Yeah. I think the white paper that originally, the concept of it was around 2008. Q. And the person who essentially invented them hasn't yet revealed themselves, correct? A. Not publicly, no. Q. And it is a bit of a cottage industry to try and identify that person, correct? A. It is. Q. Now, each bitcoin has a unique digital identity, correct? A. Each one, yeah, as I understand it, has it's unique signature to it, in a sense, or unique string to it. Q. And some of the elements of bitcoin are designed to prevent fraud, correct? A. I mean, the whole network itself, I mean, it's very well documented, I mean, throughout the whole network. Q. Well, you can't duplicate a bitcoin, right? A. I believe so, yes. Page 452 Q. You can't, or you can? A. I don't know. There has been speculation. I am not sure. I am not technical enough to say that it can't be. Q. But it can't be counterfeited? A. Not that I am aware of, no. Q. And it can't be -- well, withdrawn. Now, when you talked about -- on your direct you talked about acquiring bitcoins and you were talking about you how you did it by putting cash into an account, getting bitcoins back, right? A. Correct. Q. But there are other ways to acquire bitcoins, correct? A. There are other ways, yes. Q. Can you describe what you understand to be bitcoin mining, m-i-n-i-n-g? A. So bitcoin mining is the process of creating a bitcoin, and that is -- someone that mines would generally use a computer to specifically run a series of it is called algorithms that will try to mathematically create this like perfect string which was of all the different transactions. It confirms them. Once it is confirmed it becomes a part of a block. Once you solve a block, you get a bitcoin. And right now there is rewards that are given. And it has been -- I think it is 25 bitcoins right now you get for each block you solve as a miner, but it takes a lot of computing power. So the thing to take away from it is it takes a lot of computing power to solve this block and to be awarded these bitcoins. But people do it and try to run computers all the time to try and mine and get these rewards. Page 453 Q. So it is essentially not necessarily free but you don't have to pay for them, you have to -- you earn them essentially by -- A. Electricity is what people weigh it against generally, the cost to run their computers, but, yeah. Q. And those aren't -- I mean, those are still authorized bitcoins, right? A. Yes, they are. Q. Because the bitcoin universe is limited, right? A. It is at 21 million. Q. One of the theories of the person who invented bitcoin was that it have a cap, and bitcoins are created periodically until that cap will be reached at some point, correct? A. Correct. Q. And that's supposed to protect the valuation of bitcoin as opposed to -- I don't want to get too technical about it but monetary policy; that is why it is nongovernmental? A. To set a limit, I think. Q. By the way, you talked about computing power just a second ago. You defined a server as a computer that would run a website. Silk Road had servers, right? Page 454 A. Correct. Q. Not just an ordinary computer running it, it had -- it is a complex operation to run, right? A. Right. Basically, I just described it as a computer but, yeah, it is a server. Q. Silk Road, you have servers with significant computing power, right? A. As I understood, yeah, they were ones that could operate a website that's more heavy in traffic. Q. Now, you also mentioned on direct that the value of a bitcoin fluctuates constantly? A. It does. Q. And in April of 2013 the market eclipsed $1 billion for the first time, right? A. I believe so, yes. Q. And when you first got involved in the investigation, it was worth a couple of dollars, right, per bitcoin? A. That is correct. Q. And then you said that there was a point in 2013 where it went up to about 250, $250 per bitcoin? A. That is correct. Q. And then by the time of Mr. Ulbricht's arrest it was down to $100 per bitcoin? A. Around 100, 117, somewhere in there. Q. Then after his arrest it went up again, right? Page 455 A. It spiked dramatically. Q. Dramatically? A. Yeah, after his arrest. Q. Up to a thousand dollars for a bitcoin? A. Over a thousand dollars. Q. So people who were holding bitcoins at the time of Mr. Ulbricht's arrest and thereafter could really make a killing, right? A. I believe there is a lot of people who made money, yeah, off of that. Q. And the more bitcoins you have, obviously, the more money you are going to make on that transaction, right? A. Correct. Q. Have you ever seen a graph of bitcoin valuation over time? A. I have. Q. I show you what is marked as Defendant's B, for boy, and ask you if that is a representation of the fluctuation of the bitcoin marketplace from its inception through today -- not today, through this week? A. It looks accurate, yes. MR. DRATEL: I move Defendant's B in evidence, your Honor. MR. TURNER: No objection. THE COURT: Received. *(Defendant's Exhibit B received in evidence)* Page 456 MR. DRATEL: Could we publish it, please. It actually looks like that mountain. *(Pause)* Q. OK. So going back to 2011, if we look at the start in 2011, we see it is very close to zero, right? A. It was, yeah, approximately 2 to $4 or so at that point. Q. Then in 2013 is when it really starts to move, right? A. That is correct. Q. And then it goes down -- there is a spike in the early part of 2013, and then it goes back down to somewhere in the hundreds, right? A. That spike was at $250. Q. I'm sorry. Do you have the -- A. Laser pointer? Yes. MR. DRATEL: Can I borrow yours? THE WITNESS: Do you want it? MR. DRATEL: I will just point it out. Q. So there is a little spike in the middle of 2011, right? A. That is about a $20 spike I believe it went up to. Q. By the way, just -- and that is zero, right, that line there? A. The line is zero, yes. Q. So there we have in the early part of 2013, it goes up to about 250, as you stated, right? Then it goes back down until the latter part of 2013, and this spike right here is after Mr. Ulbricht's arrest, right? Page 457 A. It was, I believe, like starting around mid/late October, yes. *(Continued on next page)* Page 458 Q. And that goes up to over a thousand dollars per bitcoin? A. I think the highest is around a thousand or 1200. Q. Do you know what it is now? A. I believe it's around $300 bitcoin. Q. So even though a lot of bitcoin use may have been attributable to Silk Road, it survives Silk Road? A. It survives Silk Road; yes. Q. In fact, it's now used or accepted by certain large vendors, right, ordinary vendors? I'm not talking about Tor or illegal. Overstock.com accepts bitcoin? A. Yes. It's starting to hit other websites and other -- the mainstream. Q. Certain casinos accept it? A. I think there's a university that you can pay tuition with it. Q. Now, you talked about the tumbler, right, on Silk Road? A. Yes, I did. Q. Just to refresh the jury, tumbler -- I'll just try to explain it shorthand -- which is something that's designed to create confusion about which specific bitcoins are involved in a specific transaction. Is that a fair statement? A. That's a fair statement. Q. And do you know whether Silk -- do you know when Silk Road instituted tumbler? A. I don't know when they instituted it, no. Page 459 Q. Do you know if Silk Road actually used a tumbler? A. They advertised it in and I also did my own research through the block chain of transactions that I would move into Silk Road and out of Silk Road, and I observed from patterns that would resemble that of a tumbler. Q. And those started in 2012? A. Yeah, the bitcoin -- Q. In other words, your transactions -- A. Yes. Q. -- that would you monitor? A. 2012, yes. Q. So you were able, because you -- and you could see both sides of a bitcoin transaction, right -- A. Correct. Q. -- you were able to do some tracing, right? A. I was; yes. Q. Even with a tumbler, you were able to do some tracing? Or even if they were tumbled, you were able to do some tracing? A. Yes. There were accounts that we believed belonged to Silk Road that were so high in volume at the time that -- and they would stop after we would deposit money and that would lead us to believe that that belongs to Silk Road, and we'd be able to trace other transactions to that account. Q. And that started in 2012? A. Yes. Page 460 Q. And you never heard of Mr. Ulbricht until September of 2013, right? A. That's correct. Q. Now, based on your training and experience, you concluded that the system was likely designed by someone with a high level of technical expertise concerning the operation of bitcoins, right? A. It appears so, yes. Q. In fact, Silk Road had a lot of sophistication, right? A. It was sophisticated; yes. Q. And I mean that in a computer way as well as marketing and business oriented, right? A. Yes. Q. In fact, it used leading-edge encryption-based technologies, right? A. It did, yes. Q. And encryption-based technologies is really about security, right? A. Yes. Q. And you reported, right, that the operators of the website are believed to be highly experienced web administrators that take precautionary steps to protect themselves and their users, right? A. Yes. Q. Would they be the type of people who would leave handwritten notes in a wastebasket? Page 461 A. At this point, I don't know. I couldn't say whether they would or wouldn't. Q. You called it a complex criminal enterprise, right? A. Yes, I did. Q. And you used multiple confidential informants throughout the course of your investigation, right? A. Yes, I did. Q. Now, you have Mr. Ulbricht's passport still up there? A. Yes, I do. Q. And his birthdate is March 27, 1984? A. Yes, it is. Q. So in late 2010, he would be -- he would have been 26? A. Yes. Q. Now, you said on direct Silk Road operated like a lot of other websites, correct, that operate on the ordinary Internet? A. It was similar, yes. Q. And we saw on the left-hand side all the categories of merchandise, right? A. Correct. Q. And by the time you were on the site in December of 2011, it had about 2,000 or so products for sale, right? A. I think that first screen shot was about April for the 2,000 products. For the drugs, the earlier ones I think were less. Page 462 Q. Yeah, but I'm saying 2,000 products for sale total -- A. Total or so -- Q. -- like in December of 2011? A. That would be about correct, yeah. Q. And there were certain items -- by the time you got on the site, there were certain items that were forbidden, correct? A. That's correct. Q. Child pornography, counterfeit currency, weapons of mass destruction, right? A. That's correct. Q. And in fact, on the site it said -- and this is November of 2011 -- on the site it said please do not list anything whose purpose is to harm or defraud, such as stolen credit cards, counterfeit currency, personal info, assassinations, weapons of mass destruction, chemical/bio weaponry, nukes and anything used to make them. Please do not post anything related to pedophilia. To allow listings of items designed to defraud or harm innocent people would be to stoop to the level of the very people we are standing up to. Right, that's what it said on the site? A. That remained, yeah, throughout the site. Q. Now, you interviewed -- as you said before, you interviewed some people who had ordered drugs and you'd go and then confront them sometimes, right? A. Yes, I would. Page 463 Q. And they weren't of any help really in identifying Dread Pirate Roberts? A. No. They only helped with the vendors. Q. And those vendors didn't give you access in terms of to who Dread Pirate Roberts was, right? A. No. Q. Now, you mentioned that it was -- one of the seizures that was tested -- sorry. Withdrawn. One of the undercover buys that you made of the 50 or so undercover buys that you made from Silk Road, that one tested negative for drugs, right? A. That's correct. Q. But do you know how many other sales or scams or frauds that didn't provide real drugs in exchange for bitcoin? A. I don't know how many, no. Q. And it's kind of difficult for the consumer to go to the police or the fraud bureau for that, right? A. It would be, yeah. Q. In one way that it differed from ordinary websites in some respects is that the vendors would come and go, right? A. Yes, they would. Q. They would vanish for a little bit, come back, vanish. It was not that kind of organization or continuity that you would find for, let's say, Amazon where sellers were there? A. No. Some would stay for longer periods. Others would disappear periodically and then just reappear. And sometimes, they'd leave for a larger period and come back. Page 464 Q. Now, with respect to the commissions that Silk Road charged on transactions, January 2012 was when the commission structure changed, correct, and you put in those exhibits. And you verified that in September of 2012 when you opened up your first vendor account? A. That was an account we took over. Q. Sorry. When you assumed control of the vendor account. Now, do you know the volume of transactions before you had access to the site? I don't mean access in terms of with a vendor account or something when you first went on the site. You don't know the volume of transactions just from going on the site at that point, right? A. I do not know that, no. Q. And have you studied that since in terms of the volume over time? A. I've looked at -- there was other reports that are done by universities. Carnegie Mellon did a report where they did an analysis and I reviewed that which was based upon the feedback that was in the marketplace. So I reviewed their work they did, as well as I've seen results that came later on off of servers. Q. So 2013 was a huge year, right? A. I'm sorry? Q. 2013 was a huge year for Silk Road, right? Page 465 A. It was a larger year, yeah. Q. There was a big spike in volume? A. The listings went up; yes. Q. Now, the silkroadmarket.org, that is something on the ordinary Internet, right, was? A. Correct. Q. And the only way we have it is because of something called archive.org, right? A. Right. Q. And archive.org is an organization that is dedicated to capturing everything on the Internet, right? A. They capture everything on the regular Internet. Q. Not Tor? A. Correct. Q. Not anything that's on Tor, but on the ordinary Internet, archive.org's purpose is to try to capture everything? A. It takes screen shots regularly over time and it documents that on its website, that you can view a website and the screen shots that it took. Q. Right. So if I put in Silk Road, that's all you come up with, is that Silk Road market.org, right, if you did that research? A. It would lead you specifically to that URL, yes, it would pull up silkroadmarket.org. Q. And that's the way for people to see historic pages on the Internet that don't exist anymore, that you just can't get. You type in a URL and the page no longer exists, right, when you get that kind of message, you can try archive.org to see whether something is there? Page 466 A. Yes. And it will show if there's changes done also. You can change a web page over to reflect different things. Q. So that silkmarket.org was just one page, right? A. It was just one page. Q. Silkroadmarket.org? A. Yes. Q. And that was a page essentially both -- if people put in Silk Road into their ordinary Internet computer, that they might get that and then be directed to Silk Road on Tor because it kind of told you how to get there, right? A. That's correct. Q. And that page stopped operating in April of 2012, right? A. I believe that's correct; yes. Q. And there were changes throughout to the site over time, right? A. The silkroadmarket.org? Q. No, I'm sorry. Let's go back to dot-onion. A. Okay. Q. So, right, the site is changed in some ways over time, right? A. There was a whole new format in appearance to the site after I think it was in late 2012. Page 467 Q. Also, even before that, did you know from reviewing forum messages and things like that, right, that in June of 2011, June 11 of 2011 in particular that there was a message that the site was closed for a while and that it would reopen in July, right? A. From what I read on previous articles, yes. Q. And that it was going to split into two sites and you've seen that post, right, the one where it's going to split into two sites? A. I don't recall offhand. Q. Well, one -- but you testified -- A. Oh, the forum you're talking about? Yes. Q. It split into two sites, the marketplace and the forum? A. Yes. Q. And you've seen that post that announced that, right? A. Yes. Q. And that's June 2011? A. Correct. THE COURT: Mr. Dratel, just for a couple of more minutes. MR. DRATEL: This is a good time. THE COURT: Oh, this is a good time? MR. DRATEL: Yes. THE COURT: Ladies and gentlemen, we'll take our lunch break now and pick up again at 2:00. So, again, just to remind you folks, most of you, if are able, to get yourself ready to come out here a couple minutes before 2:00 so we can come on out. Page 468 I want to remind you not to talk to anybody about this case, including each other. And if anybody tries to talk to you about this case, to avoid them and just walk away and then to let Joe know, all right. We'll see you after lunch. Thank you. *(Jury excused)* *(Continued on next page)* Page 469 *(In open court; jury not present)* THE COURT: All right, ladies and gentlemen, be seated. Let's see if there are things that we need to take up. One thing that I wanted to mention is that I had not appreciated for some reason before just a little while ago that the conspiracy charge is not only an 841(a)(1) charge, but also an 841(h) charge; that is, given my comments about scope a significant difference, and I wanted to state that on the record. I have to think through what the implications of that are, but that is different from what I had been thinking. It certainly doesn't alter my ruling in terms of the bottom-line orders on the rulings which I had issued, though the scope, it is potentially the case that the scope would cause me less concern for an 841(h) than otherwise. I have to think that through. The other point that I wanted to raise was that Mr. Dratel had objected to a portion of the witness' answer where an individual who was being arrested, I believe, an alleged seller -- MR. DRATEL: Purchaser, your Honor. Never mind. I thought he was -- THE COURT: Was he a purchaser? MR. DRATEL: I think he was a purchaser because I think the testimony was essentially that when they confronted him with the package, he said, yeah, he ordered it off of Silk Road. Page 470 MR. TURNER: My recollection was it was a vendor. THE COURT: I thought it was a vendor, too. In any event, the reason I allowed that in was because, number one, it was responsive to the question in terms of presenting his knowledge; but also to the extent that there was a statement against interest under 804, it would have come in and there would have been the requisite unavailability given the timing and the reasonableness of getting someone here that quickly. So that's the basis of what I was stating because it was to support the facts that the witness had been asked to testify about. Are there any things which you folks would like to state now or issues that we should go through before we take our own lunch break? I do not have a matter in here during the lunch break. I have a meeting someplace else. You are welcome to all stay here as you see fit. MR. DRATEL: I just wanted to project that this went faster than I anticipated in large part because of the witness' cooperative manner, so obviously that's very helpful and efficient. I'm coming to a more dense part, so it's hard to say. I think at least another two hours is my guess. THE COURT: So the government can plan around that in terms of getting your next witness, Mr. Turner, on deck. That I think you had previously stated was Kiernan. Page 471 MR. TURNER: Thomas Kiernan. THE COURT: So it will be Kiernan either way, so if we start, it's possible Mr. Kiernan may get on the stand sometime between 3:00 and 5:00. MR. DRATEL: I don't think he would be on before 4:00. THE COURT: So 4:00, so between 4:00 and 5:00 maybe. MR. DRATEL: We'll see how it goes. THE COURT: If you think you're going to beat 4:00, let us know; otherwise, the government will have Mr. Kiernan here at 4:00. MR. DRATEL: I will reevaluate at lunch what I think based on how it went this morning. THE COURT: Right. Understood. Anything further that we should go over right now? MR. TURNER: No, your Honor. MR. DRATEL: No, your Honor. THE COURT: Let me say one thing to the press also. I would ask you folks not to approach any of the jurors or to the extent that you're communicating with anybody else from your office to have them approach the jurors. Obviously, it creates issues with juror misconduct or potential bias. They're not having any misconduct on their part. It's misconduct with the jury. I had the occasion to speak to other judges in the courthouse regarding what they have done in the past. They have actually excluded the newspapers or the press itself from the courtroom, not all, the offender member of the press and/or his or her paper or if it's not a newspaper, it's an Internet source. Page 472 I'm not doing that right now. I just wanted to let you folks know what would be one of the potential courses of action that would be recommended to be taken at that time if we had another repeat. Thank you. We're adjourned for lunch. *(Luncheon recess)* *(Continued on next page)* Page 473 AFTERNOON SESSION 2:05 p.m. THE DEPUTY CLERK: All rise for the jury. *(In open court; jury present)* THE COURT: Mr. Dratel, you may proceed now. MR. DRATEL: Thank you. JARED DER-YEGHIAYAN, CROSS-EXAMINATION CONTINUED MR. DRATEL Q. Good afternoon, Agent Der-Yeghiayan. A. Good afternoon. Q. Ross Ulbricht, you learned during the course of your investigation he was an Eagle Scout? A. I did. Q. And that he was living in that house in San Francisco, right? A. There's I think there were two residents I knew of. Q. I'm saying he was in there. There were other, as well, right? A. Correct. Q. He shared that with other people? A. Yes. Q. He was not the owner of the house, right? A. I don't believe so, no. Q. You said that in his bedroom, you found credit cards, bank statements, things like that, the passport, right? Page 474 A. Correct. Q. And you investigated all of that, correct? A. Yes. Q. Because it was important to try to find out about money, right, bitcoin and location? A. Yes. Q. And there was discussion -- withdrawn. And there was a concern about, not concern, but there was an interest in how and when and in what quantity Mr. Ulbricht may have cashed out bitcoins, right? A. Yes. Q. Now, you, as a law enforcement officer in an undercover capacity, occupied and controlled the account for cirrus on Silk Road, right? A. From July from July on; yes. Q. From July -- late July, you said about the 26th, 27th of 2013? A. Around -- correct, around that date. Q. And cirrus is C-I-R-R-U-S, right? A. Correct. Q. And that previously had been the account for scout? A. Correct. The original operator that started the cirrus account was scout before that. Q. And scout changed it to cirrus before you took it over, right? Page 475 A. Scout -- the person that operated scout account created the cirrus account. Q. About two or three weeks after you got control of the cirrus account, DPR, Dread Pirate Roberts, granted you administrative rights over the Wiki page? A. I had the chat from one of the dates, but yes, it was granted to me when I was controlling it. Q. Did August 16 sound about right? A. Sounds about right; yes. Q. You were given only limited privileges, correct? A. I was given a level -- second level underneath admin privileges. Q. You never spoke to DPR on the telephone, right? A. No. Q. You never communicated in a ordinary Internet electronic communication? A. Nothing outside of Tor. Q. Right. And the same was true of the other -- to your knowledge from your investigation and your interaction with the other administrators, the same was true with them as well, correct? A. I didn't engage with them outside of Tor either. Q. Right. But I'm saying they didn't engage with DPR outside of Tor? Page 476 A. Not from what they told me. Q. And you saw no evidence of that in the course of your investigation? A. No. There were a few that were closer connected to him than me, but not -- they didn't ever say that. Q. DPR would you say was careful to conceal his identity? A. I think he was. Q. And he set up a series of security measures on the site such as this tiered level of access even for administrators and employees? A. He did. Q. Now, for Government Exhibit 127, it's already in evidence. A. 127. Okay. Q. It's up there. These are the instructions that you were given by DPR on how to get administrative access, correct? A. To clarify, this was given to the person -- Q. I'm sorry? A. I'm sorry. Q. This was given to cirrus before you were cirrus? A. Yes. Q. In essence -- now, did you learn how to get on the site from the person who was operating the cirrus account or did you go to this page to get the information? A. The person that operated the cirrus account walked me through the steps. Page 477 Q. So, in essence, it was not a difficult process for someone to walk someone through the process of getting access, as long as you had the right password or access code? A. It was a little more complicated to set up than I was -- my previous knowledge before that with dealing with, like, an IRC type of setting like this, but it was -- with the directions it was simple. Q. And you follow the directions, and you had, instead of that username and that password, if that was for DPR, that would get you DPR's access, right? In other words, you know where it says 8b username? So if that were in DPR's username and if 8c and 8d were DPR, it wouldn't be any different to get into the DPR-level of access, right? MR. TURNER: Objection; form. THE COURT: Hold on one second. Let me read it. Why don't you rephrase. Q. This is information that cirrus was given to log on, right? A. Correct. Q. So it's a username, a domain, is that a, b, c and d. There's a username, domain and password that allow a certain amount of access, right? A. I guess so, yes. Q. If you had the information for DPR's username, domain and password, that's how you would get to -- there's no other way to get in the site to your knowledge other than through this, just with a different password and a different domain and different username? Page 478 A. I don't -- I wouldn't know how he got in. I know that there's -- there are different ways to access servers or there are different ways to access programs. I don't know if he would do this from, like, almost a front-face way that you do this. I'm not sure. Hypothetically, yes, I'm guessing it is possible to do it that way, too. Q. And in terms of logging into the Pidgin chat, and just to refresh the jury's recollection, the Pidgin chat is the little box in the upper right that you were chatting with with DPR on October 1, and you had a couple of other instances of that as well, right? A. Correct. Q. And that's not on the Silk Road site, correct? A. No. That server was separate. Q. That's a separate encrypted chat system, right? A. Yeah. It's separate dot-onion address. Q. But for that one, in terms of logging on, the steps that you went through with us are the only steps for logging on, right? Nothing more complicated than that? A. That's the only ones I know of; yes. Q. But that got you on the Pidgin chat, correct? A. It was a little bit different from the Adium program that cirrus was originally using, so that's why that user or the person, the original owner walked me through it because it was different than Pidgin. Page 479 Q. And Adium is used more on Macs, right? A. I guess so. It was just the program that user decided to use, so I wanted to stay consistent. Q. You talked about timezones on that, right? And you're aware that Adium has a plugin, meaning an additional option that you can use to adjust the timezone? A. I'm not sure about a plugin for it, but I never did it. Q. And the timezone that's reflected on that, that's really just a timezone of the person's computer who is logging on, right? A. I'm assuming that that's the computer, yes, the computer's time. Q. So if you set your computer in a different timezone -- withdrawn. You can set your computer to a different time than the time, right? A. You can set your computer to any timezone you want. Q. So all that does is tell you where the computer timezone is, not where the computer is, but what timezone is provided to that --is programmed to that computer; is that accurate? A. Yes. Q. Programmed to that computer? Page 480 A. That's accurate. You can modify your timezone on the computer and that doesn't reflect where you're at at the timezone. You can put anywhere in the world. Q. Also, those chats, don't they also contain a line, and we can look at it if you need to, but it says encrypted OTR chat initiated identity not verified the other side, right? Don't they say that? A. There's OTR different plugins, I guess, that allow you to do it. It stands for off-the-record chats. Q. What I'm saying is, the ones that you've testified about, don't they say that? There's sort of a line that says it's encrypted, but the other side is not verified? A. I believe so, yeah. When you first start it up, all the chats I had with the staff would always initiate the OTR setting, so it would turn on every time I start a chat. Q. And you said before you spent thousands of hours on the Silk Road site, right, in a variety of different roles essentially: Buyer, seller, administrator. Right? A. Yeah, and just browsing, too. Q. Right. Some of that, like you said, every couple of days in direct contact with DPR, right? A. Just about, yes. Q. Is it fair to say that during that entire period, DPR never let -- and I would say he, but it could be a she, right? We wouldn't know just from the screen, right? I mean, in essence, you don't know who you're talking to, right? Page 481 A. From a user account, yeah, it could be a he or she. Q. DPR never let his or her guard down to give you a piece of personal information that enabled you to establish identity; is that fair to say? A. I don't know. For gender-wise, I didn't never really see anything that would indicate that it was a he, but some of the writing just appeared to be more masculine to me from reviewing it. Q. I'm not talking about gender. I'm just talking about in general. A. Okay. No, there wouldn't be a defined, exact way to say that it was a he or she. Q. Never let his guard down. By the way, you were surprised that scout was a woman, right? A. I was. Q. I want to take you to the day of Mr. Ulbricht's arrest, all right. And just so it's clear, you had never seen Mr. Ulbricht in person prior to you going to California the day before? A. That's correct. Q. Did you identify him from photographs or from people pointing him out, you know, in other words, the other agents saying "that's him," or did you identify him -- in other words, did they say this is him and then when you saw the photo, you saw him? Page 482 A. When I started investigating him around September tenth, 11th, it was brought to my attention. I did pull up documents such as his passport application, the photograph. I saw other photographs as well that I found online of him. Q. So that's how you were able to recognize him? A. Yes. Q. He didn't have any kind of markedly -- or different appearance that would prevent you from recognizing him? A. No. Q. You had never spoken to Mr. Ulbricht before that time, in other words, voice contact or anything else to your knowledge in terms of Ross Ulbricht? A. I had not. Q. Now, I think you testified on direct that you wanted -- that the plan was to try to have Mr. Ulbricht out in public for purposes of effecting the arrest, correct? A. Correct. Q. And that would be so he would be more vulnerable that way in terms of -- obviously in terms of just the immediacy of the arrest and your ability to track and all that, right? A. Yes. We had an arrest warrant, so we were -- wanted to initiate that in those settings. Q. And you didn't, as cirrus, or anyone else to your knowledge didn't coax him out of his house, right? A. No, I did not. Page 483 Q. So he left his residence voluntarily, right, to go to, the day before you noted, to a public Wi-Fi spot, right? A. Correct. Q. And then the next day, went to the cafe and then did not stay at the cafe but instead went to the public library? A. Was never coaxed out that I know of. Q. Right, right. But it was the plan to get him online during that period, right? A. Mr. Ulbricht himself, we would be observing him if he went to an area that would provide public Wi-Fi and then, yes, try to initiate a chat with Dread Pirate Roberts online. Q. By the way, you mentioned the passport and you seized the passport from his residence, right? That's an authentic U.S. passport, correct? A. It's an authentic U.S. passport. Q. And so, if we could pull up 129C, please. A. Okay. Q. And that's the chat that you were having at the time of Mr. Ulbricht's arrest, correct? A. Correct. Q. And so, you initiated, correct? A. I initiated the chat; yes. Q. And then you asked him can you check out one of the flagged messages for me, right? A. That's correct. Page 484 Q. And dread says sure. And then the next thing he says is let me log in, right? A. Correct. Q. So he needs to log into silkroad, correct? A. To log into the market, yes. Q. So he's already on the Internet. He's already active, so you're chatting with him, but until you ask him, he's not logged into silkroad, correct? A. I -- it doesn't appear he's logged on to silkroad. Q. And then -- by the way, you know what happens when you log in as -- withdrawn. Do you know whether or not if one logs in as DPR, as Dread Pirate Roberts onto the silkroad site, whether or not the mastermind page comes up automatically? Do you know? A. I do not know. Q. Did you ever test it? A. No. Q. During that period in the library, you're aware that there are law enforcement officers in the library, you're not sure who but you know there are people watching him, right? A. That's correct. Q. And to your knowledge no one -- withdrawn. Mr. Ulbricht still had his laptop out on a library desk, right? A. As I was told by other agents there. Page 485 Q. By the way, with respect to the mastermind, going back to the mastermind screen, you said that Mr. Kiernan is a computer scientist? A. He is. Q. That's how you described him. So you had to tell him to hit the "back" tab to find the previous screen? A. I asked him if he could go back. I think he was trying to keep it in a place or trying to keep the computer just active and alive so it wouldn't -- the encryption wouldn't turn back on or wouldn't lock. So he wasn't actively, as far as I could tell, doing anything on the screen besides keeping it alive at that point. Q. So before that chat, 129C on October 1, 2013, what was the time before that that you communicated with DPR? A. I believe I had a chat. I have to look back at my logs. Q. In fact, it was a couple of days, right? A. It might have been a few days before. Actually, earlier I think in the day, I think I had a short chat with him or it might have been -- I got to doublecheck. Q. That day? A. Not -- I'm saying earlier the day before I left maybe. Q. Weren't you concerned that -- withdrawn. Wasn't it unusual for him not to be on what you call the IRC for two days? A. On the staff chat? Page 486 Q. Yes. A. It would be a little bit unusual but there were periods that he would take some time off. Q. But did that concern you at some point? I mean, did you talk to the other agents and ask them whether they got physical surveillance because Dread Pirate Roberts had not been on the staff chat for over two days and that was unusual? A. I think he was online. I hadn't been engaging him in chat, though. Q. Do you recall? A. I'm sorry? Q. Do you recall specifically? A. I'd have to look back at my records to -- Q. I'm going to show you what's marked as 3505, 36 and 37. Just ask you to -- if you don't mind, I'll just point out to you where I prefer that you read rather than take time. So that and then through there. It goes up obviously from the oldest quote. Start on page 37 I think is how it works. A. Okay. *(Continued on next page)* Page 487 Q. So you wanted to know from Agent Tarbell whether they had physical surveillance because you said that not logging into IRC for over two days is unusual for DPR, right? A. Yes. Q. There is also something else. Do you recall that on the 29th, which is two days before, that you noticed someone with a username peaceloveharmony was what you called sitting on DPR's profile for a couple of hours; do you recall that? A. If I could see something that would help me recollect? *(Pause)* Q. I show you what's marked 3505-00775, and just ask you, again, read from the bottom to the top, essentially. A. Sure. *(Pause)* I recall this. Q. Thank you. So there was a period on the 29th of September, 2013, where someone with a username or a screen name peaceloveharmony was what you called sitting on DPR's account? A. Yeah. There was from the forums, on the Silk Road forums, there is a way to see what users were viewing actively in the forums, and what I mean by "sitting" on an account, they were viewing the profile of Dread Pirate Roberts for an extended period of time. Q. And so you asked the people on the arrest team as to whether it was any of them, essentially, right? Page 488 A. If there was anyone else that was monitoring him. Q. Right. And they said no, that it was not them? A. Right. The responses I got from the other agents that I was working with said no. Q. Right. Your conclusion was that it might be law enforcement, some other law enforcement that you were unaware of? A. I suspected, yes. Q. But it didn't have to be law enforcement, it could have been anyone? A. It could have been anyone, yea. Q. But it was unusual, right; it wasn't typical activity that someone would be monitoring that profile for that extended period of time? A. I didn't actually watch them for a long time. I was watching his account and watching the forums more vigilantly, actively for the last few days. So that's why I took notice of that. Q. And you had spent a fair amount of time yourself as law enforcement doing that very thing, right, sort of trolling through that account for periods, right? A. And watching it, yes. Q. While you were doing that, were other people doing it at the same time? Do you recall anyone else doing it? A. Generally me. I believe Special Agent Gary Alford also was watching the account on the forums as well. Page 489 Q. But he wasn't peaceloveharmony; we don't know who that is? A. I said it to him and he said no. Q. I just said, we don't know who peaceloveharmony is? A. I don't know who peaceloveharmony is. Q. Now, is it fair to say that the Silk Road site, that users, both vendors and purchasers, were extremely security conscious? A. A lot of them were, yes. Q. And there was a lot of talk on the forum about keeping track of law enforcement infiltration or attempts to infiltrate the site? A. There was discussions about that, yes. Q. And they actively discussed prior arrests and what happened to people and rumors and all of that kind of stuff? A. There would be discussions about that regularly on the forums. Q. Would you say they were very motivated in finding out more about what law enforcement is doing with the Silk Road? A. There was a lot of discussion. If there was anyone that would ever bring up something that would occur with law enforcement, then they would like to discuss that a lot. Q. Now, in April of 2012, you believe you had identified some Silk Road bitcoin accounts, correct? A. That would be correct. Q. And you were working to further identify the people behind them, right? Page 490 A. That is correct. Q. And sometime in the summer, maybe July of 2012, you believed that you had identified the person, right? A. I believe that I had a good target for it, potentially. Q. A good target, Mark Karpeles, right? A. Karpeles and an associate of his. Q. Right. Ashley Barr, correct? A. Correct. Q. Karpeles is K-a-r-p-e-l-e-s. Mark Karpeles is a French citizen, right? A. That is correct. Q. He lives in Japan, right? A. He does. Q. He is also the owner of Mt. Gox, correct, the bitcoin exchange? A. That is correct. Q. And he bought Mt. Gox I think in 2009? A. I think it was 2010. Q. OK. But you thought that -- what you had concluded there was that Karpeles was essentially behind Silk Road but that his associate Ashley Barr was DPR? A. There was -- Karpeles' English that I could see from his -- the things he would write online did not match the level of English skills that Dread Pirate Roberts possessed. So I thought it was someone else close to him, and there was a person that shared some of the same viewpoints that was working for him by the name of Ashley Barr that I suspected. Page 491 Q. He was a Canadian, right? A. He was a Canadian citizen. Q. And has a degree in computer science, right? A. He has computer science degrees, yes. Q. And he is also Karpeles' right-hand man, or was at the time, right? A. He was. Q. And so as a result you built up quite a large list of information to lead you to that, right? A. There is little bits and pieces of evidence that was pointing the investigation towards them, yes. Q. And -- well, did you say we had built up quite a large list of information to lead us to this? A. It was, yeah, a lot of little pieces, a list of exhibits. It was a lot of little things that added up to it. Q. The question is did you not say inside Homeland Security Investigations, HSI, we had built up quite a large list of information to lead us to this? A. That sounds right. Q. And you also didn't want anybody reaching out to Karpeles, right? A. There was other -- Page 492 Q. Just let me ask because I will get to that. A. OK. Q. I want to get to -- A. Other law enforcement I didn't want reaching out. Q. Right. You were worried that if someone reached out or did something that Karpeles might find out, it could impair the investigation? A. Correct. Q. Right. So -- and in fact, you let people know within law enforcement that Karpeles, he closely monitors everything, all of his websites? A. That is correct. Q. And that you thought that a lot of the websites he ran -- and he ran a lot of websites, right? He had a lot of domain names and things like that within his control? A. He hosted a lot of websites, yes. Q. So you advised avoiding visiting them since many of them appeared to be fronts and that Karpeles is actively tracking them? A. That is correct. Q. So that if someone went on and wasn't sufficiently disguised, then he might recognize it as law enforcement and then again impair the investigation? A. That is correct. Q. In fact, in August of 2012 you sent out an email and then you realized, as we all do at some point in our lives, that you left out the word "not," right? Page 493 A. There might have been an occasion like that. Q. You had to send a quick email to say not to -- A. Not to, I think, maybe contact -- Q. Right. That was an important facet of the investigation, obviously, is to keep it as confidential and as close as possible as you gathered more information? A. That is correct. Q. And at some point because -- withdrawn. It came to your knowledge that there were other investigations of Silk Road going on around the country, right? Other agencies, other offices, I mean, were investigating Silk Road, right? A. That is correct. Q. And you -- when I say "you," HSI, and yourself as a part of HSI, were operating with or working in tandem with the U.S. Attorney's Office in the Northern District of Illinois, right? A. We were docketed there originally, yes. Q. You did that in Chicago, right? A. Right. Q. So that is where you were running your investigation out of. Those were the assistant U.S. attorneys that you were talking to and keeping them advised of your progress? A. That is correct. Page 494 Q. And there are obviously other U.S. attorneys offices around the country and other agencies that were not necessarily either aware or in contact with Chicago about what they were doing? A. There was, yeah, we were doing our best to try to deconflict with other districts. Q. At some point you learned that Baltimore had an investigation, right? A. That is correct. Q. And, actually, you learned that from Agent Alford? A. No. Baltimore, the HSI agent that originally opened the case and their supervisor came to Chicago originally to talk to us about their investigation and about working together. Q. It wasn't in August of 2012 that someone from the Organized Crime Task Force told you that Chicago had input the same information about Karpeles as a target as you had? A. I was notified of that, about Karpeles, later on, but I knew of their investigation long before that, though. Q. And in January of 2013 you got permission to open up an undercover bank account to try to move money through Mt. Gox, the bitcoin exchanger, just to remind everybody, right? It is the largest bitcoin exchanger, right? A. It was at the time. Q. It was at the time. And other companies owned by Karpeles, right? A. That is correct. Page 495 Q. And so you got permission to do that? A. I got permission to open up under our investigation an undercover bank account, yes. Q. Right. Now, Karpeles is also a computer developer systems administrator, right? A. That is correct. Q. Self-proclaimed hacker? A. That is correct. Q. Who brags about his hacking in Twitter and other social media. A. He does. Q. And he has control over hundreds of websites and companies, or had at the time in 2012/2013? A. He did have hosting services, yes. Q. And you believed him to be the mastermind behind keeping Silk Road secure and operating? A. He had ties to the original silkroadmarket.org website. Q. But my question is did you not say that you believed him to be the mastermind behind keeping the website secure and operating? A. He had the credentials to do so, yes. Q. But did you say that? A. I would have said that, yes. Q. And that Ashley Barr was acting as the voice of the website under the name Dread Pirate Roberts? Page 496 A. That's what I suspected, yes. Q. Now, in April of 2013, Chicago initiated -- when I say "Chicago," HSI Chicago, your office, right -- initiated an undercover purchase from Silk Road using Mt. Gox and another Karpeles company as the bitcoin exchange? A. Yeah. We did an exchange through two different ways. Q. Part of the purpose of that was to -- withdrawn. You also suspected that Karpeles was running an unlicensed money exchange operation, right? A. I did. Q. And so this could be a way of establishing jurisdiction to charge him with that in Chicago? A. Yes, it was. Q. And in May of 2013, HSI Chicago issued a grand jury subpoena to a company called Dwolla, right, D-w-o-l-l-a? A. That is correct. Q. And that is an online payment processing system? A. Yeah. It's like an online wire transfer company. Q. It is based in the United States, right? A. I believe so, yes. It has service in the United States. Q. It was a way that Mt. Gox used to transfer money essentially in and out of the U.S.? A. It was one of the ways that they offered to either withdraw or deposit funds. Q. And bitcoin, right? It was part of the bitcoin exchange process that Mt. Gox used? Page 497 A. It was used for just the money part of it to withdraw. Q. And that was -- and the subpoena was with regard to a Karpeles company called -- and I will spell it -- M-u-t-u-m, new word, S-i-g-i-l-l-u-m? A. Mutum Sigillum. Q. Right. That was what the subpoena was for, the records for that company, right? A. Correct. Q. And the grand jury subpoena keeps the investigation secret and confidential, right? A. Correct. Q. Within law enforcement only? A. Right. Q. Then you find out the next day, May 10, 2013, that Baltimore had seized the -- how do you pronounce it, the Mutum Sigillum? A. Mutum Sigillum. Q. -- Mutum Sigillum that HSI Baltimore had seized $2 million in that company's account, right? A. They notified me by phone, yeah. Q. Then it was apparent to Karpeles that the U.S. government had him on its radar, right? A. That is correct. Q. This is May of 2013, right? Page 498 A. I believe so, yes. Q. May 10th. In fact, there were newspaper articles about it, right? A. It was a large seizure at the time, yes. Q. Sorry. More than $3 million was seized. And it was from Mutum Sigillum's Wells Fargo account, right? A. Correct. Q. And you were notified in advance that Baltimore was going to do that? A. I was told that it had already happened. Q. Right. And no one even in your office had been notified in advance? When I say "your office," I mean Chicago HSI. A. No. Q. And was that money ultimately returned to Mr. Karpeles? A. I don't know its current state right now. Q. And you thought that HSI Baltimore should have deferred that seizure because of your criminal investigation of Mr. Karpeles? A. At the time, yes. Q. Now, despite that and the fact that Mr. Karpeles was already on notice, to a certain extent, that he was on your -- not your radar but the U.S. radar -- and I am not being critical, I'm just talking about despite that, in terms of the chronology, you prepared a draft affidavit of May 29, 2013 for a search warrant for email of Mr. Karpeles, correct? Page 499 A. That is correct. Q. And these search warrants would not be on notice to him, correct? They would just be to the provider, and they would provide the information so that he wouldn't necessarily know, right? A. No. The provider -- well, he wouldn't know, yes, that the provider -- Q. So you were doing it in a way that would keep it confidential. Baltimore did it in a way where it would be public. You did it in a way that it was confidential, right? A. Correct. Q. So in your draft, which was prepared for swearing under oath, right? A. That is correct. Q. And you said that Silk Road had been launched in March of 2011, right? A. Correct. Q. And that both the marketplace and the online forum were operated by the same administrator? This was your conclusion? A. Yeah, that's what I assumed, yes. Q. And that you had done some -- you talked yesterday about whois.com, w-h-o-i-s.com? Page 500 A. Who.is, yes. Q. You talked about it yesterday for the purpose of identifying IP addresses or the people behind IP addresses? A. Correct. Q. And in your draft affidavit you talked about the whois.com for the Silk Road -- the searches that you had done for the silkroadmarket.org, right? A. Correct. Q. And when you said before -- oh, withdrawn. That the registration was March 1, 2011, and then that only went through April 13, 2011. And then there was a separate registration through March 30th, right, through 2012, I guess, right? A. There were changes in the hosting administration. Q. There were changes in the postings, right? And that there was something called sta.net, a company, right, that was involved in -- well, withdrawn -- that you concluded from your investigation was involved or connected to the silkroadmarket.org? A. That is correct. Q. And that was registered to Mutum Sigillum? A. I believe so, yes, yeah. Q. Which was Karpeles' company? A. It was. Q. And in fact, he was the contact for Mutum Sigillum; it was listed to his email address, right? Page 501 A. That is correct. Q. Ands that he was the administrative -- and that he was in administrative control of Mutum Sigillum since he had acquired it in 2010? A. That is correct. Q. And in February 11, Karpeles bought Mt. Gox, right? I think -- I apologize before for having the wrong date, but February 11th he bought Mt. Gox? A. Around February 2011. Q. If you want to see the draft, I would be happy to have you -- to have it in front of you. A. If I could, yeah. That would helpful. Thank you. *(Pause)* MR. DRATEL: I apologize but when it printed out, the numbers cut off halfway so sometimes it is hard to tell 8's from 9's. This is 3505-3085 through 3092. Yes. *(Handing)* THE WITNESS: Thank you. Q. OK. So let's go back to paragraph 18, if you could look at that. A. OK. Q. And you trace more of Mr. Karpeles' sort of electronic footprint as either corporate or personal, right? A. Correct. Page 502 Q. In terms of how you link him through whois.com, other companies, to sta and other companies that are affiliated -- that are connected, through your research and investigation, connected to the silkroadmarket.org? A. That is correct. Q. So, in fact, if you look at 19, in February 2011, Mr. Karpeles buys Mt. Gox, right? A. Sorry, you said 19th? Q. Yes. A. It stopped at 18. Q. What is the last page of that? A. Page 5. Q. On the bottom, 35 -- A. Oh, it is cut off. 03 -- Q. It is double-sided. A. It is still cut off. 03091, 92. *(Pause)* Q. I'm sorry, paragraph 17. I apologize. A. OK. Q. Do you have 17 there? A. I have 17, yes. Q. So in February 2011 -- so paragraph 17, he buys Mt. Gox in February 2011? A. That is when it is shown, yes. Q. That is a month before Silk Road launches, right? Page 503 A. That is correct. Q. And you note there that Mt. Gox handled perhaps as much as more than 80 percent of all of the bitcoin exchange in the world, right? A. That is what they advertised, yes. Q. And that was as of April 2013, right? A. Yes. Q. And, excuse me, part of your theory in terms of your investigation was that Silk Road was a device for leveraging the value of bitcoin, right? A. It appeared so. Q. Yes. In other words, that if you had cornered the market on bitcoin and could create a site that only used bitcoin and everybody used bitcoin, you would drive the price up? A. Yes. Q. And also get business as an exchange? A. Right. Q. Now, so based on that, in terms of an affidavit, you were prepared to swear that there was probable cause that Mark Karpeles was intimately involved as the head of Silk Road? A. From the connections that I listed in the affidavit draft, yes. Q. But he had already been -- he had already had that seizure of Mutum Sigillum by the time you had drafted this affidavit, right? Page 504 A. Correct. Q. And he was in Japan? A. He was in Japan. Q. Also, around the same time, in May of 2013, you submitted to Dwolla, or subpoenaed from Dwolla, the online payment processing company here in the U.S., information about -- subscriber information for certain accounts that you thought were suspicious and related to Silk Road based on the movement of bitcoin or money in and out of there, right? A. There was a subpoena issued for that, yes. Q. And that was because -- well, you thought that there could be vendors or operators that you could find with that information? A. Yes. Q. And by "operators," you mean administrators, people who were running the site? A. Potentially, yes. Q. And there was large movement of money -- withdrawn. There were large movements of money from Mt. Gox to Dwolla accounts? A. It showed, yeah, movement of money moving out of Mt. Gox through Dwolla. Q. And, by the way, on that list I think there were 16 names on that list or 16 accounts, do you recall? A. I don't. If I could see the -- Page 505 Q. Sure. *(Pause)* But do you recall whether or not Mr. Ulbricht's name was on that list of accounts? A. I don't believe that it was. Q. And ultimately you created a spreadsheet -- or received a spreadsheet from Dwolla with all of the transactions relating to Mr. Karpeles, is that right? A. It was all the Mutum Sigillum -- I'm sorry, in the Mutum Sigillum account for Dwolla for all the transactions that they had received and debited, credited and debited. Q. That is about a thousand pages long, that -- A. It was, yeah, a pretty large return. Q. And do you recall whether Mr. Ulbricht's name comes up there? A. It did. Q. Right. And there are about 20 transactions, right? A. Roughly or so, yes. Q. And they are all in the amount of probably like a thousand dollars or around there, some less? A. Around a thousand dollars. I think one was for like a few hundred dollars. Q. So nothing large, assuming you mean by "large" more than a thousand dollars, when you are talking about large movements of money, right? Page 506 A. No. There wasn't anything that compared to the other accounts, no. Q. And those were spread out over a couple of years, right? A. I believe so, if memory serves me right. Q. In fact, even after Mr. Ulbricht's arrest you went back and looked at that, right? A. I did. Q. Now, you also learned as part of your investigation at some point in the summer of 2013 that Baltimore was trying to work on an interview with Karpeles through his attorneys, right? A. That is correct. Q. And they wanted to ask him directly about Silk Road as well as his money business, right? A. Yes, they wanted to talk to him. Q. And you advised against that? A. We requested that they did not. Q. Right. But they went ahead and met with his lawyers July 11, 2013, right? A. That sounds about right, yes. Q. Not with him but with his lawyers? A. With the lawyers. Q. And then you say Karpeles' -- withdrawn. Karpeles' attorneys brought up Silk Road, right? A. That is what I was told. Q. And they say that he was willing to tell the government who he thought was running Silk Road, right? Page 507 A. That is correct. Q. And for that he would get a walk on his charges, right? A. I don't know what their deal was. Q. That's what he wanted? A. I don't know. I don't know what was discussed then. *(Pause)* Q. OK. And during this period after this all occurred -- withdrawn. So I am going to show you what is marked as 3505-300. *(Pause)* I am just going to bracket a point here. Just read that to yourself and then when you are done let me know. *(Pause)* During this period -- I'm sorry. Let me know when you are finished. *(Pause)* A. OK. Q. During this period you were upset about the work -- about the investigation that Baltimore was pursuing and how they were pursuing it, correct? A. I was upset about it, yes. Q. And you wrote a long memo with a chronology to lay out what had occurred and what the problems you saw were? A. That is correct. Page 508 Q. And as part of your investigation, as part of your preparation and all of that, you learned that Karpeles' lawyers had made this offer that they would tell the government who was behind Silk Road if he would not be prosecuted for the money exchange charges, which, by the way, had not been instituted, right? A. I'm sorry. Q. He hadn't been charged yet with any money exchange -- A. It was just the civil forfeiture, the civil seizure of the money. Q. Right. But in return for not pursuing any potential charges against him, he was willing to give that name up? That was the offer that his lawyers made, that you learned during your investigation? MR. TURNER: Objection. Foundation. THE COURT: Certainly you will answer as to what you know. If you had knowledge of that fact or if your memory is refreshed by something and now recollect something, then you may testify to it. MR. TURNER: Objection. Foundation. Hearsay as well. THE COURT: Why don't you try and rephrase it, Mr. Dratel, and come at it in a different angle. MR. DRATEL: Sure. MR. DRATEL Q. It was crucially important to you at the time to know what was going on with respect to other pursuits of Karpeles and what was going on with other agencies investigating or other U.S. Attorney's offices investigating him, right? Page 509 A. Yes. Q. And as part of that you had conversations and read memoranda and were in touch with people who provided to you information about it so that you could pursue your own investigation correctly, right? A. Be more specific. I am sorry. Q. Sure. That you wanted to know what was going on with Baltimore, you wanted to know what was going on with the meeting with Karpeles' attorneys, you wanted to know what was out there because you had your own parallel independent investigation of him going on that could be completely wiped out by what Baltimore was doing? A. Yes. And we had verbal agreements with the attorneys in that district also about that. Q. And so in the course of this and in pursuing your investigation, you learned that Karpeles' lawyers had made that offer to the government? MR. TURNER: Objection. Q. You learned through people either in Baltimore or at HSI in Chicago? MR. TURNER: Objection. Hearsay. THE COURT: Sustained. Page 510 MR. DRATEL: I will just say Rule 807. THE COURT: You know, I think now is a good time to take our mid-afternoon break so that we can take up this evidentiary matter while you folks stretch your legs. So let's take our mid-afternoon break. We'll come back in about -- probably about 12 minutes. I want to remind you not to talk to each other or anybody else about this case. Thank you. And you could take a break, too. THE WITNESS: Thank you, your Honor. *(Continued on next page)* Page 511 *(Jury and witness not present)* THE COURT: All right. Let's all be seated. So, of course, you folks know a lot more about the facts than I do, and so I'm learning about this as I hear it and don't have the background that you folks have. The residual exception of the hearsay rule is Rule 807. That is the rule that Mr. Dratel has cited. And since I know he knows the rules well, I assume that that is the one he intended to cite. MR. DRATEL: Correct, your Honor. THE COURT: All right. And why don't you folks -- I mean, as I understand the issue and as I have been hearing the issue, the issue is that the witness allegedly learned something only by virtue of being told it, that it is being offered for the truth; namely, that this particular offer was in fact made and that the offer had the terms that Mr. Dratel has in his questioning suggested. Am I right about what the problem is from the government's perspective? MR. TURNER: Exactly right, your Honor. THE COURT: All right. So so far so good. And, Mr. Dratel, tell me where you are going with this. I mean, I understand generally the issue with Mr. Karpeles. I had followed that, I think. I think it is pretty clear where you are going with that. But tell me why you need this point through this witness in this way, as opposed to after learning whatever he learned about the Baltimore investigation with Karpeles, what did you do next. That would be the typical way to avoid the hearsay issue. Page 512 MR. DRATEL: The reason is because it's the offer by Karpeles' attorneys that is the material fact. In other words, that is what it is. Their client is saying we're going to give you the name of Silk Road and don't charge us now. Karpeles was never charged. But the point is that he was offering that in return for that. They had this guy in their sites and he had never been charged. The point is that he at some point claimed to know, and our position is that he set up Mr. Ulbricht -- THE COURT: I understand. MR. DRATEL: -- maybe not in this conversation. THE COURT: I followed your reasoning. MR. DRATEL: And I think it comes under the rule, you knows, it has circumstantial guarantees of trustworthiness, I think. Otherwise, I will just -- you know, do I get to call the assistants who were at the meeting, who heard this? THE COURT: You could call the lawyer. I mean -- MR. DRATEL: I don't know who the lawyer is. I don't know his name. This is 3500 material. I don't know. This is something we learned in December 31st, in a 5,000-page 3500 material dumped on this witness. Page 513 THE COURT: That is not unusual for this or any other trial, as you know. MR. DRATEL: 5,000 pages for a single witness, I think -- THE COURT: It is not really, not when you've got an investigation that's been going on for years. I'm sure you have been involved in situations. Let's not deal with the volume because I don't want there to be some takeaway point that is not relevant to our discussion about the procedures that we used. I think we followed the appropriate procedures for the 3500. MR. DRATEL: I agree with that. I think it is Brady. THE COURT: That is a different issue, in any event. It was disclosed pretrial. Let's hear -- so your point is that under the residual exception the offer by the attorney should come in as an offer that was in fact made? MR. DRATEL: Yes. THE COURT: And then what are you planning on doing next, just so that we've got the various issues on the table? MR. DRATEL: It is more about Karpeles and Baltimore but not about that. THE COURT: All right. So that would be the extent of the conversation you want the witness to testify about? MR. DRATEL: There is one other part that I would -- that probably is part of the same piece, which is just that they were going to meet with Karpeles and this meeting was supposed to be in Guam, and I don't know whether this meeting ever occurred. Page 514 THE COURT: All right. MR. DRATEL: This is the important part. I don't care about the Guam meeting or anything like that more than this. THE COURT: I just want to get the issues on the table to deal with them as a group. Mr. Turner, why don't you address your position on this. MR. TURNER: I think we are dealing in hearsay and double hearsay and potentially triple hearsay. I think it is basically -- THE COURT: Why don't you walk through it slowly and bit by bit so that we have got a clear record. MR. TURNER: Sure. Basically, what is being asked is for this witness to testify that he heard from an attorney in Baltimore that an attorney for Mr. Karpeles had been told by Mr. Karpeles that Mr. Karpeles had information about who DPR was. I cannot possibly see how that would be a reliable statement and it would have indicia of trustworthiness. In any event, Rule 807 requires prior notice to the opposite party if this is going to be introduced, and, obviously, we had none. I would also add, your Honor, that this is all about an investigation of someone that did not pan out and, obviously, we haven't objected up to this point -- Page 515 THE COURT: Well, I assume you will go into that on redirect. MR. TURNER: Yes. THE COURT: That will be for you to take up. MR. TURNER: Obviously, it is not unusual for any number of leads to be -- THE COURT: Well, you will take that up on redirect. MR. TURNER: I understand. THE COURT: Explain to me the different levels of hearsay because I am not familiar with how this conversation occurred. Is it, Mr. Dratel, your view that this occurred from the attorney himself who was making the offer to this witness, or was it through one attorney to another attorney -- well, originating with the client to the attorney to another attorney to the witness? MR. DRATEL: The only part -- your Honor, the only part to me that is hearsay is the relation by either Baltimore or Chicago to Special Agent Der-Yeghiayan of what was said by the lawyer. The fact that the lawyer said it is not hearsay. The fact that it was said, it would not come in for the truth of it, that he could provide the name of the Silk Road operator in return, but that he offered it; that is the important thing. That is not hearsay. That is just offered for the fact that it was said. It is essentially a verbal act. It is not hearsay. It is not offered for the truth. It's offered for the fact that somebody made that offer to the government, someone whom the government was investigating. Page 516 So the only part that is hearsay is what a U.S. attorney, or an agent of the United States government, told another agent of the United States government that the government is now saying is unreliable. THE COURT: All right. Let's take this piece by piece. Let's take it from -- because the way the hearsay rule, as you all understand, is you evaluate it at each step. Would you agree, Mr. Turner, that the initial statement from the attorney for Mr. Karpeles, that his client was offering to divulge information in exchange for some form of leniency, that that is not in and of itself hearsay; that would be offered for the fact that that statement was made? MR. TURNER: I think it could be offered that way. I think there is the danger of the jury understanding it as -- THE COURT: I could give a limiting instruction, as I have. MR. TURNER: Understood. But, yes, an offer of basically a proffer, an interview, would not have intrinsic value in itself. THE COURT: Right. And that that statement, would you agree with Mr. Dratel's characterization, was made in terms of the way he's been positing it, Mr. Dratel, that is, to a U.S. attorney in Baltimore, an A.U.S.A. in Baltimore? Page 517 MR. TURNER: An assistant U.S. attorney in Baltimore is a human being, like everybody else, and the whole hearsay rule obviously exists in order to make sure that there is no misinterpretation, there is no miscommunication. THE COURT: I understand. But do you have any reason to believe that the offer was not made, that this was not a real offer? MR. TURNER: I do not know the details. I certainly wasn't present or involved in those conversations. THE COURT: But you have -- MR. TURNER: Neither was this agent. THE COURT: I understand. He can't, and you can go back on cross how he has no idea if this was true, false. All he knows is that he was told this, and he has no idea if it was in fact made. But what I'm trying to figure out is have there been other aspects of the Baltimore investigation which you have found to be unreliable in some way, which leads you to believe it is unreliable? And in terms of these particular A.U.S.A.s who were involved, let's put it that way -- and I don't need to know their names because I don't want to -- MR. TURNER: Your Honor, I am not going to comment on the general proviso of another A.U.S.A., but what I would say is that obviously even where you have highly coordinated investigations with other districts, all the time there is miscommunication, misunderstandings because those people are dealing with details in concrete situations that you are not intimately familiar with like they are. So you are going to misconstrue things they say. They are going to miscommunicate things. That is why they have the hearsay rules. And there is no reason here to believe that just because this is what Agent Der-Yeghiayan believed he heard at that time, that it should be offered for the truth and that the typical rule should not be complied with. Page 518 MR. DRATEL: Your Honor, just one thing I would add is that Agent Der-Yeghiayan thinks it is reliable. He put it in a detailed chronology of the investigation because he was upset about the way it was proceeding in Baltimore. He felt undermined by it. So he would not have included it in that chronology if he did not think it was reliable. THE COURT: One thing you can do, Mr. Dratel, is you can ask Mr. Der-Yeghiayan whether or not when he put things in the chronology, whether or not he believed the sources for that information were reliable before you get to the next step. MR. DRATEL: Fine. THE COURT: If he says not always, that may lead us down a different path. If he says -- I don't know. You do what you want to do. Page 519 But here's my -- is there something else you wanted to say, Mr. Turner? MR. TURNER: I understand. He is reporting up his chain what he has heard from others, but it still puts us right in the hearsay box. THE COURT: I don't dispute that it's in the hearsay box. I think that we've appropriately analyzed whether or not it -- how it travels up the chain. There are two statements. One statement is a statement from the lawyer to the A.U.S.A. There is a subsequent statement from an A.U.S.A. to another either A.U.S.A. or directly to Mr. Der-Yeghiayan. It almost doesn't matter whether or not it has got two hops after that or one hop after that because I think my analysis would be the same, which is that -- let me pause and make sure I have... *(Pause)* All right. Let me ask, before I go any further -- one portion of the rule does require that the adverse party have a fair opportunity to meet it. Is there anything that you think you would do if you had found out about this this morning that you can't do now? MR. TURNER: I mean, I haven't even looked at the document, extensively. I haven't had a chance to talk with the witness about it. I haven't had a chance -- THE COURT: You can't talk to the witness about it, anyway, during the pendency of an examination. Page 520 MR. TURNER: This should have been provided to us beforehand, though. THE COURT: I'm just trying to figure out what you would have done. MR. TURNER: I could have talked to the A.U.S.A. I could have talked to the lawyer. I could have done any number of things. THE COURT: OK. Here's what we're going to do. Mr. Dratel, you are going to tell me how important this is, because what we'll do is we'll hang the witness over the weekend if that is important to you. I will allow you to continue, but I won't require the government to do his redirect until we come back on Tuesday. MR. DRATEL: OK. THE COURT: So it will be both a tactical choice as well -- because I am not going to make them end the witness, and there is obviously issues involved in hanging him over the weekend for this. MR. DRATEL: Right. THE COURT: I don't know if it is that kind of point. MR. DRATEL: I would like the point to be made. So here's my proposal. I have at least an hour, at least, probably more. I could probably -- THE COURT: Don't take -- God knows, don't take up any more time than you need to. Page 521 MR. DRATEL: No. No. No. What I am saying is we won't be wasting time if we break at a time where I say, OK, we can now resolve this issue and come back Tuesday morning. THE COURT: I would rather you complete your examination so we at least know where you are ending. Are you proposing to hold yours open? I don't want to hold yours open. MR. DRATEL: No. No. No. What I am saying is I don't know where I am going to end. I am at least going to go to 5 o'clock or finish very close to it. That is what I meant. THE COURT: Well, if you're going to go to 5 o'clock, what I'll do is we'll end before you get to this issue. Don't go back to it right now. I will hold on whether or not we -- what we do with it because you both will then have had time to consider it, so will I, over the weekend, and we can then come back to it on Tuesday morning. So let's do it that way. It sounds like it's sufficiently important to you. Let me tell you my thinking on it without giving a ruling on it, and this is an issue which, in light of the defendant's interest in this, we'll hold it open until Tuesday morning. All right? So the government will not with Mr. Der-Yeghiayan be able to do the redirect until Tuesday morning, for which I apologize, but that will be the way it is. So that witness will have to just come back. MR. DRATEL: Right. Page 522 THE COURT: But do you want to hear what I am thinking? MR. DRATEL: I'm sorry. Yes. OK. THE COURT: I'm thinking that there are indicia of truth to this for 807 purposes, but I do want to consider it further and will be able to do so in light of the additional time that we will have. Having a proffer from a lawyer is not a particularly unusual type of act -- in fact, it is quite common -- and, therefore, it is a reasonable thing that a thought might occur which is that if there is any information which a potential target of an investigation has, that they might attempt to consider exchanging that for leniency. So the story that is going along with this has indicia of something which could well have happened. And the fact that it is between two A.U.S.A.s or one or more A.U.S.A. in terms of the hearsay portion, because the first portion with the lawyer is not a hearsay statement, but the fact that an offer was made -- is being offered for the truth, there are cases which suggest that sometimes indicia of reliability can come from the position of a person. That would be the kind -- and there are cases and I believe, actually, it is in the form of an attorney, not necessarily an A.U.S.A., if I am recalling my Second Circuit cases. I don't have a name but you will be able to find them. So I think that there is enough here that I am not prepared right now if we are going to be falling over into Tuesday anyway to make a definitive ruling on this. We'll let you folks noodle around with it some, and the government can then have the notice that it otherwise would have had under the rules. Page 523 And in the future we will try to head these off a little earlier. MR. DRATEL: OK. Yes. THE COURT: It is unusual for me to knowingly be in a position where we're going to hold open a witness. I don't like to do that because it leaves open the possibility that the jury's time won't be used most efficiently. But I understand the various interests, and in the interest of justice I am going to do that. So we will figure out what comes of it step-by-step, as I say. MR. DRATEL: Your Honor, can I just ask, with respect to where I'm going, because that's just one question of a larger piece, obviously? THE COURT: Yes. MR. DRATEL: So -- and as I said before, that was not any deeper than the question itself. In other words, I wasn't going to ask follow-up questions about that particular meeting. But I will still pursue the Karpeles part without that piece. THE COURT: Yes. MR. DRATEL: OK. Page 524 THE COURT: This is only about this one hearsay statement. Do what you otherwise were planning to do and do it all. MR. DRATEL: OK. THE COURT: Then we will figure out where to go from there. Yes, Mr. Turner. MR. TURNER: I would just add that because it was another office's investigation for Karpeles, that this is all going to come in through what the agent heard about that investigation from the agents involved there in Baltimore, the lawyers involved, I think there is going to be a continuing, running objection. THE COURT: All right. So there may be more to this. As we are thinking our way through it, Mr. Turner, you understand what might be coming up with other testimony. These are things you can lay out and suggest that the time we've got will be used by both sides to help put the picture together completely, and people can decide whether this particular Q and A is earthshattering enough to do this. MR. DRATEL: I will -- you know, your Honor, what I will do is, as I go through it, if I think it is something that is in the same ballpark, you know, obviously -- I know you don't want to do sidebars so that would be -- THE COURT: Well, in this case a sidebar is better than waiting until Tuesday. Page 525 MR. DRATEL: Yes. Right, I agree, because I would like to do it in sequence. I don't think that it is the same level of an issue of information imparted from others and what I am going to be doing down the road here. It is more about his investigation. THE COURT: We've got one open item and we don't have more. Let's just continue and proceed as we normally would for this. I don't expect there to be any other issues, right, that you see coming up? MR. DRATEL: No. THE COURT: All right. MR. DRATEL: Not for today. THE COURT: Let's take a very short break ourselves, come back, and we will go until two or three minutes before 5, then we'll break for the today and, in fact, for the weekend. THE CLERK: All rise. *(Recess)* *(Continued on next page)* Page 526 *(In open court; jury not present)* THE COURT: I want to state one matter before we bring in the jury. As it turns out, the Post was active yesterday on a story other than this case. And it appears from information that the courthouse has obtained that there was a red-bearded Post reporter who looks like somebody actually here who approached juror no. 2 and was in the process of writing an article about man-spreading, apparently a new phenomenon of which I was unfamiliar. In any event, that was the topic about which he was going to approach. He was not assigned to this case. So it was just really a happenstance. So I just wanted to make that clear, that nobody on this case that we are aware of has then been approached by anyone. Let's bring out the jury. I will look forward to reading the article by the Post. *(Continued on next page)* Page 527 *(In open court; jury present)* THE COURT: We'll all be seated. We have to get the witness out here. Witnesses also take a break during the breaks for the jury. Here we go. Mr. Dratel, you may proceed. MR. DRATEL: Thank you, your Honor. Q. Special Agent Der-Yeghiayan, where we left off, after -- as part of your investigation and in the course of your investigation, you communicated to Baltimore in July of 2013 that you did not want Baltimore to pursue Mr. Karpeles or to meet with him, correct? A. That's correct. Q. And you said that it would -- that you believed it would damage HSI Chicago's investigation? A. Correct. Q. Now, in August, August 15 of 2013, you are operating as cirrus on Silk Road, right? A. Yes. Q. You're operating a number of other buyer accounts, right? A. I had many available to me, yeah. Q. And you also had some seller accounts, as well? A. I did. Q. And you, at that point, drafted another search warrant for emails for Mr. Karpeles, correct? A. Correct. Page 528 Q. And so one -- this is August 15, 2013, one was for the Northern District of California, correct? A. Correct. Q. And one was for the Southern District of New York? A. Correct. Q. And they were for email accounts, Google email accounts? A. It was yeah, gmail. Q. Gmail accounts. And this is, again, three months after the seizure of Mr. Karpeles' money by HSI Baltimore that essentially put him on notice of the government investigation? A. Yes. Q. And in your affidavit, which you were prepared to sign that day and swear, right, August 15, 2013? A. I believe the date sounds right, yes. Q. If you need help, I'll be happy to -- A. That sounds correct. Q. You were ready to swear that there was probable cause to believe that those gmail accounts contained evidence of instrumentalities of narcotics trafficking and money laundering, right? A. Correct. Q. Anal that was based upon your personal knowledge, your review of documents and other evidence and your conversations with other law enforcement officers and civilian witnesses? Page 529 A. Correct. Q. And you went through a lot of the details that we discussed before about Mr. Karpeles, Silk Road market website, Mt.Gox, all of that, right? A. Yes. Q. And you wrote -- ready to swear that -- and did you ever swear to that evidence? A. Yes, I did. Q. So, you wrote I believe this evidence shows that Karpeles controlled the silkroadmarket.org website along with the tuxtele.com website and that he hosted them both at IP addresses he controlled? A. That's correct. Q. And you also cited his LinkedIn entry, right? A. I believe so, yes. Q. Where he described himself as an experienced computer programmer who, from 2003 to 2010, worked as a software developer at various companies specializing in developing ecommerce websites? A. That's correct. Q. And you wrote that based on my training and experience, I know that that type of background would make Karpeles well suited to operating an ecommerce site such as the Silk Road underground website? A. That's correct. Page 530 Q. Now, you also had a confidential informant that you cited in that affidavit, correct? A. Yes. Q. Who had worked with Karpeles for the past two years at that time -- this is 2013 -- that had worked for him two years previous to that, right? A. That's correct. Q. And that reported to -- that Karpeles operated something called bitcointalk.org? MR. TURNER: Objection, your Honor. 803. THE COURT: Sustained. Q. Did you swear to this in an affidavit? A. I swore to it, yes. THE COURT: Do you want a side bar about this? I don't want to have the colloquy in front of the jury. MR. DRATEL: A short side bar. THE COURT: Come on up. *(Continued on next page)* Page 531 *(At the side bar)* THE COURT: Let me say that I don't want to do this in front of jury. There's no inconsistent statements so the fact it that he's sworn to it doesn't get you for impeachment purposes to ability to put that in. MR. DRATEL: Right. What I want to do is get the basis for his conclusions of his investigations. THE COURT: Why don't you ask him? MR. DRATEL: That's fine. And the government's objection is hearsay, I have no problem that it's not for the truth. It's just for what his investigation collected that led him to have probable cause to believe -- MR. TURNER: But -- THE COURT: What the investigation -- so you would ask him, and tell me, Mr. Turner, what your view is. MR. TURNER: That sounds like it is being offered for the truth of the matter; he's trying to get out what the probable cause was for the affidavit. He's trying to establish that these are the facts, that show that somebody else, in fact, was running Silk Road, that somebody else is the real operator of the site. THE COURT: It's obviously, number one, we can all agree it's obviously highly relevant, right, if the lead investigator believed at one point in time in August of 2013 that somebody else might be a candidate, then how he arrived at how that fellow was a candidate is obviously relevant; and also how he changed his mind if he changed his mind would similarly be relevant. And you could go into that to your heart's content on redirect and Mr. Dratel can bring it out. Page 532 MR. TURNER: I think there are two concerns I have, your Honor, one is, I understand if he believed these things, but it's another thing to start citing the evidence that consists of hearsay from a confidential informant. That's core hearsay. THE COURT: It goes to his state of mind, though. MR. TURNER: I think it's going to be impossible for the jury to segregate that out. We're bringing out -- THE COURT: I'll give them a limited instruction, but I'm going to allow him to ask what was the basis for his view that somebody else was an appropriate target. That strikes me as in the heartland of the defense. MR. TURNER: Another problem I have is law enforcement privilege. If we're going to start getting into statements of confidential informants, these are people who have brought information to the government in secrecy. THE COURT: Here's what we're going to do. We won't have him go into the content of the communications. He can simply list, and why don't you take it carefully? MR. DRATEL: Okay. THE COURT: And let's cut him off if he's going to go into the content of any of those communications. He's just going to give an itemized list of these are the types of things I relied on. Page 533 MR. TURNER: Not only the contents but the source, the identity of somebody -- MR. DRATEL: The information -- THE COURT: What I was going to say is, the point that I think it's fair for the defense to bring out is that there was information listing the sources that led the investigator to believe at one point in time that there was probable cause for purposes of a warrant. That I think can be done in a way that does not invoke hearsay, all right. So do it in that way that does not get us into the hearsay problem. MR. DRATEL: Tell him what information -- can I lead him? THE COURT: You're on cross. MR. DRATEL: Yes, right. THE COURT: You can just say -- why don't you ask him what his conclusion is if he ever reached a conclusion and what the source was to give you an itemized list of the types of information -- MR. DRATEL: But the silkforum.org is important because it's the one that some of the initial -- THE COURT: You can't go into the content of what the bitcoin forum was. Page 534 MR. DRATEL: No. To say that he was running it. That's the information they had. THE COURT: That's definitely -- you're trying to get that in for the truth, right? That is exactly the truth, so you can't do that. MR. TURNER: We would ask for a strong limiting instruction here, your Honor. THE COURT: He's saying it's not going to go into the hearsay. I think we can do this in a way that does not suggest hearsay. MR. TURNER: My concern, is this the defense that the defendant wants to put on, that there was another individual behind it and this is the witness that they're seeking to draw that evidence out of? THE COURT: Yes. MR. TURNER: So that is being offered for the truth in terms of the evidence -- THE COURT: No. Let's go through it so we're absolutely clear on what the question is going to be. The question is going to be did there come a point in your investigation when you formed a basis for believing that there was probable cause for a warrant against Mr. Karpeles? Yes or no? You got these in mind? MR. DRATEL: Yes. Page 535 THE COURT: Then it's going to be tell me, just by source type, the type of sources that led you to that. They were written information that I had received, it was witnesses. I can lead him through that if you want to, but you can do it. MR. DRATEL: No. That's okay. If I'm running astray, you'll let me know. THE COURT: Then what do you want to do next because those are not hearsay so far. The fact that he did reach that conclusion is clearly something that he can testify to. MR. TURNER: I understand that. I guess my concern there is if he just says something like witnesses, then it makes it sound potentially more significant than it is. THE COURT: Then you can go back on cross, but that's not hearsay. That's part of a list of items. I can't preclude him from that. I don't think there's a basis to preclude him from that. MR. TURNER: As long as it's very clear that he's not saying that a witness told me that. THE COURT: No, no. We're not going to let him go into content. He can't go into the content of the communications. MR. TURNER: Then I'm not sure what he can draw out of the question. I understand that he can show -- that asking this witness whether he believes someone else was the person in charge of Silk Road is relevant, but beyond that, unless -- I don't know what the point of going further is unless the defendant is seeking to draw that information out for the truth to show there was credible evidence that somebody else -- Page 536 THE COURT: Well, he is saying this investigator reached a point of having believing there was probable cause. MR. TURNER: I'm not even sure how that is relevant, I mean, if it's not being offered for bias -- THE COURT: It's clearly relevant; I have no problem with making a relevance ruling on this. MR. TURNER: But why, your Honor, unless if it's being offered for truth. THE COURT: It's being offered for the truth of probable cause. This is not hearsay. None of this we talked about so far is hearsay. There's no statement. MR. TURNER: Right. My concern, again, is that the effect of the testimony is going to be that there were other sources -- THE COURT: He can always say there were 25 sources and he can always list the type. We don't get a hearsay problem as a matter of law until he goes into the content. I think the government's concern is that by implication, there was content. Of course, there's content in any communication. He when he says he spoke to people, there's necessarily content. He can't say what that content was, but his subsequent action led him to do something one might infer, but that's way people get around hearsay all the time. Page 537 I understand your concern. Let's take it step by step. He clearly gets to ask about the investigator having some belief. MR. TURNER: I would just, finally, I would note our growing concern that there actually is no legitimate basis here if the defense is not trying to show something like bias or anything else that, but, instead, is trying to prove through this witness the contents of other statements, statements of others, of witnesses that aren't being called in to testify themselves, basically the defense is trying to suggest there's all this evidence out there of the person who is running Silk Road. If that's the case, then the defense can introduce that evidence, but trying to get this witness to testify about that evidence, particularly when it concerns statements of others -- THE COURT: Here's what we're going to do because I think this is in the heartland of exactly what the defense wants to do, and I have to say right now, my view is it seems to be perfectly appropriate that this fellow says he put together an investigation which identified the defendant, he did it in the following way, showing that he may have put together an equally strong investigation to identify somebody else and that's issue: Is this the right guy? That strikes me as a defense that can be developed through this witness because this witness is not limited only to bias. Factual impeachment by undermining some of his testimony I think is perfectly appropriate, but I don't think we're going to solve it right now. Page 538 MR. DRATEL: No. THE COURT: Hold on. But I also think, is there anything else you can do because what I'd like to do is rather than break right now, I want to make sure I hear and think about these issues clearly because this is critical. So if the government feels as strongly and we're at 4:00 and we already have issue that this witness is coming back for on Tuesday, I'm inclined to hold both of these issues and talk about it so we can raise our voices above a whisper, but is there anything else you can go to? MR. DRATEL: No. THE COURT: That's fine. We'll break for the day and we'll talk about this then in open court. MR. TURNER: Thank you, your Honor. THE COURT: Thank you. *(Continued on next page)* Page 539 *(In open court; jury present)* THE COURT: Ladies and gentlemen, we are going to break for the afternoon because this conversation is going to take a little bit longer and I don't want to take up your time with it. So since we're at 4:00 anyway, I'm sure you'll be able to get a head start on the traffic and everything else and the commute. I want to give you a few reminders, though, because you do have between now and -- we're not going to see you again until Tuesday morning, right, so set your alarm clock. Don't forget about us. We need you here on time by 9:15 on Tuesday morning so we can pick up here in the room by 9:30. We will not meet tomorrow as I said before and Monday is a holiday, so we will not meet on Monday. I do want to remind you to take as seriously as you can possibly take the instruction not to talk to anybody about this case, anybody at all, including those in your life who you may have in your home or visitors, friends, spouses, significant others, whoever they may. Be don't update your Facebook page. I know that sounds ridiculous. People have done it before. And don't send emails about it, don't Tweet. And really, it's very important that if you run across any news articles on the Internet, on the television, newspapers, avert your eyes. Do not read them. You can read the remainder of the paper but do not read them. It's very, very important that the only information that you folks use as the triers of fact in this case is the evidence which you receive here in this room. And don't watch Princess Bride over the weekend, okay? Don't do any particular research on any aspect of this case from anything that you've heard about to further inform yourself. You will have all the facts as they develop here in this record here at trial. Page 540 See you Tuesday morning. Thank you very much. *(Jury excused)* *(Continued on next page)* Page 541 *(In open court; jury not present)* THE COURT: Let's all be seated. When the witness has left the room, let's pick up where we left off on this issue and we can speak about it then in a voice that is above a whisper, which always feels both as if it's being done more quickly than we otherwise might do. There's an urgency to it when we're at side bar and also people are constrained in terms of what they can reasonably say. *(Witness temporarily excused)* THE COURT: All right, so let's go back to the issue. We have two issues on the table. We have the one that we spoke about before and that was the earlier issue, which we'll now take up Tuesday morning as well. You folks, by the way, on any of these issues can write to me letters over the weekend and collect your thoughts and any case law or other support that you may believe is appropriate for me to have. I will read anything that you put before me. On this last issue, Mr. Dratel, so we have it clearly in mind now, can you maybe give me the kind of question or questions that you believe you could ask that you believe are not objectionable and otherwise comply with the rules of evidence and then let's get them on the record. And we'll find out what kinds of issues we have so we can think about them. Question number one? MR. DRATEL: Question number one is, you reached a conclusion based on your investigation that there was probable cause to believe that Mark Karpeles was behind the Silk Road as an operator and was using it to sell narcotics, essentially, what's in the affidavit. Page 542 Second would be, what kind of sources did you have for that information. And I would lead him saying you did your own investigation, you did a lot of Internet research, you had confidential informants, your own research, other collection by your colleagues. And then there is a whole range of information that he collected on his own through his own Internet research, which I would go into. THE COURT: "He" being the witness? MR. DRATEL: Special Agent Der-Yeghiayan, yes, that he did, and it's really Internet research that he did, and then I would just go through that with him a little bit. THE COURT: Hold on. Let's take that, okay. Let's not skip through that too quickly. I want to understand what you want to do with it. MR. DRATEL: Sure. THE COURT: I understand the type of information, you want to get a list of source types, right? So that includes, for instance Internet, confidential CI, confidential informant, etc., that's a source type. Then what's the next thing you want to do? MR. DRATEL: The next thing I wanted to do, and, your Honor, just so we're clear, because I usually don't see the need for this given how we practice in this district, but obviously I'm going to ask for it specifically: That there be no communication with the witness from the prosecution team in any respect because I am now previewing my cross, 615. Page 543 THE COURT: So to the extent that anything would be done differently -- there are things done with witnesses all the time, but they shouldn't be talking to him about the specific content of his testimony; I wouldn't expect anybody would in terms of these things. But to the extent they're going to have the kinds of conversations and communications they would normally have, then I'm not going to preclude that, but they shouldn't be preparing him on your cross. MR. DRATEL: That's right, or on the redirect because while someone is on cross, they shouldn't be talking -- THE COURT: I have no reason to believe they won't fulfill their obligations. I'm not going to give a special instruction. So you're going into he develops his own information. MR. DRATEL: Right. This is it: That the Silk Road website, from visiting the Silk Road website, I'm quoting him now, I know that this same software platform used by bitcoin.talk is used to operate the discussion forums on Silk Road. Page 544 THE COURT: The same software platform? MR. DRATEL: Correct. You can ask that in a way that is simply getting out a factual question, right? THE COURT: Let's talk about the nonhearsay way of getting at that which is, Are you familiar with bitcoin.talk, are you familiar with that software platform, are you aware of any similarities between that and the Silk Road platform, right? MR. DRATEL: He says based on my training and experience, this platform is not widely used by forum administrators. And then he reached the conclusion that the forums were likely set up by the same administrator; that is, Karpeles. And there's more to it, which is, both platforms, the Silk Road and bitcoin talk.org use something called Mediawiki version 1.17, and this is not an updated version, but the same exact version, even though the software has been updated since the 1.17 version. So he concludes I believe that Karpeles has been involved in establishing and operating the Silk Road website. And then he goes on to say in the affidavit that Karpeles is using Silk Road to increase the value of bitcoin because Silk Road generated a huge source demand for bitcoin. Then he says Karpeles has the technical expertise and experience necessary in order to establish and operate a large commercial website such as Silk Road. Further, the fact that the Silk Road relies on a highly complex system for processing bitcoin strongly suggests that it was designed by someone with extensive technical expertise related to bitcoin, which Karpeles, being the owner and operator of a major bitcoin exchange and bitcoin discussion forum, clearly has. Page 545 He also talks a little further about based on training and experience, I believe it is likely that Karpeles has worked with others in establishing and operating the Silk Road website because the postings on the silkroadmarket.org are signed Silk Road staff and written in the plural first person. Then it points to some investigative stuff. He did some other subpoenas that went out. THE COURT: There's a bunch of that that you can get at in a way that does not invoke any of the hearsay issues that we're talking about. MR. DRATEL: That's right. I'm just -- THE COURT: I understand. MR. DRATEL: But there is one piece of hearsay that I don't think it's hearsay based on my purpose, which is not with respect to the affidavit because I'm trying to go through this so we get all of this out of the way right now. THE COURT: Yeah. MR. DRATEL: But a little further on, in the context of sort of DPR and the context of more than one DPR, there was an interview done by a journalist named Andy Greenberg of DPR, someone claiming to be DPR, in August 2013, right at the same time. And in the interview, DPR says no, I bought the site from -- and I'm not going to go into that, that he bought the site from someone else and all of that, I'm not going to go into the hearsay -- but just the fact that in that interview, the person who claims to be DPR to Andy Greenberg says I'm not the first DPR, there were other DPRs before me. And Special Agent Der-Yeghiayan says in an email that sounds very much like Karpeles. That's what he says, that the person in that interview -- Page 546 THE COURT: And so your point is that Der-Yeghiayan reads -- that's the Bloomberg article? MR. DRATEL: Forbes. THE COURT: So Der-Yeghiayan reads the Forbes article that has this statement in it, and I've actually run across that, and you want to bring out that statement. MR. DRATEL: His conclusion, his conclusion that sounds very much -- THE COURT: You want to bring out the statement and the conclusion he draws from that? MR. DRATEL: Right. THE COURT: Tell me now, give me your argument as to why that's not rank hearsay. MR. DRATEL: Because it's his conclusion that it sounds like Karpeles based on his investigation. It's not whether the statement is true that there were other -- it sort of informs his conclusion and it buttresses it. Page 547 THE COURT: There's a way of getting at the "sounds" that doesn't bring out the statement, of course, so I need to understand the statement. Because the way to get out the fact that he sounds like Karpeles could be, Did you read the article? Yes. Did it -- let me finish it so the record is clear about the way it could be brought out. Were there words that were reported to be by DPR? Yes. Did you draw any conclusions? Yes. What was your conclusion? That it sounded like Karpeles. That doesn't require getting into the statement. So if you're going to get into the statement, tell me why, in terms of your argument, that's not rank hearsay. MR. DRATEL: You're right. I agree. Playing it out, that's correct. THE COURT: All right, so you could do it that way. MR. DRATEL: That's my purpose, not to get into the other stuff that we got into. THE COURT: So what you'd say is was there a Forbes article? In the Forbes article that you read, did you read it -- did it purport to have an interview with DPR? And did you draw any conclusions from that? Yes. What was your conclusion? X. MR. DRATEL: Right. Page 548 THE COURT: Okay. MR. DRATEL: In a leading way. THE COURT: What's that? MR. DRATEL: In a leading way. THE COURT: I'm playing out a nonhearsay way to do it. And now I want to get the government's view. And I am going to allow these issues, of course, to evolve over the next few days because we're all dealing with this right now for the first time. If you come up with additional questions, Mr. Dratel, I'm not going to prevent you from asking them, nor will I prevent the government from further refining its position. Mr. Turner, what's your view about these pieces? If you can take them in a granular manner, that would be helpful. MR. TURNER: Sure. Overall, I certainly understand what your Honor was saying at side bar that in terms of this being the core of the defense, that the defense wants to argue that there was somebody else running the site, but it just has to be done through competent evidence. And the fact that a witness at one time believed there was probable cause that somebody else was running the site, that in and of itself is not evidence; it's not competent evidence. And there is no inconsistent statement that's been drawn out that provides a justification to use that sworn affidavit to try to impeach the witness. Page 549 THE COURT: Why isn't an investigator who says I received the following four pieces of information, I took the following action based upon that information -- it doesn't have to be in terms of belief, not belief, when you file an affidavit in support of a search warrant, you're taking action based upon that information. In the government's view, is that line of approach acceptable or do you also oppose that line of approach? MR. TURNER: It's not evidence of anything. THE COURT: The investigator receives -- I received four pieces of information. MR. TURNER: Right. THE COURT: I then took the following act based upon those four pieces of information, that's evidence of four pieces, correct? MR. TURNER: The government's view is what should be the focus of the defense here is the four pieces of information whether -- THE COURT: And the act. MR. TURNER: I don't know what the act might be. THE COURT: If the act is to walk to a judge and get a warrant, that's an act. MR. TURNER: If the act is simply an assertion that this agent believed there was probable cause that someone was operating a website other than Mr. Ulbricht at the time, that assertion, that belief, that is not competent evidence of anything. Page 550 THE COURT: The act of "What did you do next? I sought a search warrant without the statement of law as to probable cause." MR. TURNER: Right. So that act would only be evidence that the agent had that belief at the time, but again, that belief isn't evidence of anything. If the defendant is trying to prove that there was somebody else operating Silk Road, they can do that by focusing on the underlying evidence itself. And then the question becomes, What evidence is admissible? THE COURT: Are the four facts admissible? MR. TURNER: So, for example, the report of a confidential informant obviously is clearly hearsay. THE COURT: Hold on. We're not going into the content of the report. We're going to say what information did you receive, just like he's testified for a day about the information he developed about the website itself. MR. TURNER: But there, your Honor, it was all facts that were being elicited. Here, it's just a belief of the agent. THE COURT: No, I'm moving aside from the belief. I'm taking the facts. So he says there were four facts. I read X or I did Y or I heard this. And he doesn't go into content. I had a communication; I had a visual sighting on some website. I have my four facts, can he list those four facts? In the course of my investigation, because you don't want him to skip over August, right, or April, I mean, that's part of what you've been bringing out. Page 551 MR. TURNER: It depends on what it's being offered for, your Honor. If, for example, what that information was being offered for was to show some sort of inconsistency that he says now that he never believed that anybody but Ross Ulbricht -- THE COURT: Isn't it an ultimate inconsistency? MR. TURNER: No, your Honor, because in order to prove that, the defendant needs to rely on competent evidence. In order to prove the ultimate inconsistency that it was someone else running the site, if that's what they're trying to prove, they have to prove that through competent evidence. Then it becomes a question of the individual pieces of underlying information that the agent relied on in his sworn affidavit, for example, which of those are admissible. THE COURT: Let's take a different example because you and I, our minds are not meeting here, I want to move away from the word "belief." I want to focus on analogous types of evidence as to that which we have gone over here so far with this witness. And if analogous types of evidence were reviewed by this witness and he lists those analogous types of evidence as among those that he reviewed, he can do that, right? Page 552 MR. TURNER: Right. THE COURT: I reviewed X, I reviewed Y, I reviewed Z. He can do that, right? MR. TURNER: Right -- it depends, if I may. So, for example, the forum software, that is a fact, and if the defendant wants to bring that out through this witness' testimony -- isn't it true that Silk Road, the forums operated using a certain version of forum software? Do you know that to be a fact? Did you personally observe that? Those are facts that this witness can competently testify to. THE COURT: Presumably, he might have information about the bitcoin.org. Did you become familiar with the software platform that bitcoin.org relied upon? Yes, I did. And did you compare that to the Silk Road forum software platform? Yes, I did. Did you draw any conclusions? Yes, I did. What was your conclusion? It was the same thing or similar. He can do that. MR. TURNER: Yes. Those are personal observations of this witness. He's made no hearsay issue -- THE COURT: Here's what we'll do: First, I will elicit from you whether there are any other bases upon which you sought to object to the testimony so I get a full view of your objections. Page 553 Then I want you to find a case for me, or cases, because if what you're saying is supported and it's the way that the law works, then there ought to be oodles of cases. I feel like what we're talking about is analogous types of evidence that would be described in very similar ways, but there may be something that I am missing -- MR. TURNER: We'd be happy to brief it. THE COURT: -- at 4:30 on a Thursday. It does happen. Tell me: Are there any other bases apart from this one that you just described? MR. TURNER: Other than about confidential informants, as I mentioned at side bar. THE COURT: So, the way I would articulate back to you what I understand your concern is or your objection, is that underlying the witness' statement or testimony, potential testimony about why he took certain action which is seeking a warrant, underlying that are or information which he believed were facts and based upon which he took certain action, and you dispute the reliability of those facts and you believe that those facts are themselves based upon hearsay. Do I have your point right? MR. TURNER: I'm not sure if that captures all of it, honestly, your Honor. There are a couple of points, and I think it would probably best if, at the end of the day, for us to lay this out in our papers. Page 554 I think one is certainly hearsay issues to the extent that basically what the defense is trying to draw out are hearsay assertions that were proffered as support for probable cause in a search warrant affidavit, that's not competent evidence. THE COURT: He's not going to go into the content of the communications. He would say I have these four types; I took this act. MR. TURNER: I understand. Then our larger concern is, the witness' act is irrelevant, what this witness did is irrelevant. THE COURT: I don't think it's irrelevant because if he pursued a target of this conduct and it wasn't the defendant, I think that's directly relevant to the defendant's theory of the case. MR. TURNER: My point is, your Honor, what the defense is trying to prove here is not simply that this agent pursued another target. The defense is trying to argue that this other target is the real DPR. THE COURT: They're trying to raise a reasonable doubt as to whether or not the defendant is the real DPR. MR. TURNER: But that is the assertion they are trying to prove, so that's why the hearsay concerns we have -- THE COURT: How else do you do it? Page 555 MR. TURNER: -- are so acute. The way the defense does it, your Honor, is by relying on competent evidence. So, for example, if they want to point to the fact that the Silk Road forums were based on a certain software that Mark Karpeles also used, that has nothing to do with what the agent did or didn't do or whether a search warrant was sworn out or not. It's a simple fact, and this agent observed that fact and can testify to it. It's a completely different matter for the defense to say, well, didn't you hear from some confidential informant or hear from some other witness certain information that led you to believe that Mark Karpeles was the person behind it and then go to a judge with a search warrant sworn out? All of that is being offered to try to prove that someone else was running the site and that is clear hearsay being offered for the truth of the matter. THE COURT: It's an inference. There are certain facts that are being posited to draw inferences. Here's what I think we should do: We should all get this transcript and read this portion of it that relates to what we have just all gone over. I think that to the extent that there's any question as to whether or not the defense has been building all afternoon a picture that Mr. Karpeles was, in fact, at least arguably a DPR, that I think has come out in spades. I think the jury understands that that's the argument. I have no idea what they think about it, but that I think is not -- that cat's out of the bag, right, and that this particular witness Mr. Der-Yeghiayan, for some period of time, was pursuing Mr. Karpeles, all of that's out. Page 556 So I don't know that what we're talking about, frankly, is particularly additive, but you folks, again, know more than I. And I very much hesitate to preclude something unless there's a very solid evidentiary basis when it goes to the heartland of the defendant's theory. That's why I want you to look at it, think about it, measure it against what's already in the record, and then present whatever you want to present in terms of a written submission. I'll absolutely read it. MR. TURNER: We'll do so. THE COURT: Thank you. MR. DRATEL: I wanted to add the identification of an alternative suspect and the conduct of the government's investigation with respect to that alternative suspect is core Brady in so many cases, and we'll brief that for the Court. THE COURT: In terms of Brady, the very fact that we have all this 3500 material is Brady. If you think it's Brady, then it's there. MR. DRATEL: Yes. I'm just talking about relevance. I agree with the Court, it couldn't be more relevant. And the question of competent evidence, the Court has navigated that, but we'll address it in the papers. Page 557 THE COURT: I'll tell you, it raises some issues that I would benefit from people's writing things down so that I can sit there and I can really go through it very carefully. MR. DRATEL: I'm saying, we will submit something as well, your Honor. THE COURT: If you're going to change what you're doing, let us know so we're not ships passing in the night. MR. DRATEL: Correct; I agree 100 percent. THE COURT: I am sorry that this occurred in terms of cutting things short, but I think it was necessary in light of this particular issue. We'll come back on Tuesday morning. Is there anything else that we should know about that we should preview for next week? And we're going to need to come up with a solution for that monitor because I can't see Mr. Ulbricht's face. I like to see actually everybody's face. The Court looks around. I can see Mr. Howard's face because he's closer. I don't need to see Ms. Lewis' face. MS. LEWIS: I'm fine with that. We can put it in between. MR. DRATEL: We'll figure it out. THE COURT: I had a note to myself a couple of times. MR. DRATEL: Let me review what I have left. And if there's something else that I think needs to be previewed, I'll include it in the submission and figure it out. Page 558 THE COURT: Anything from the government's perspective? MR. TURNER: No. THE COURT: What we're going to do, I'm also going to provide next week, it's likely to be Wednesday, a set of the draft jury instructions. You folks will then be asked to go back and to go through them using comments with Word so that I can just look and see what you don't agree with. We're actually working off of your draft because your draft is off of one of my prior drafts, so actually I think it's working okay that way. Tomorrow I have a full day with a million lawyers in this room, so you'll need, unfortunately, to at least clear the tables and put things someplace safe. MR. DRATEL: It will be pristine. THE COURT: Terrific. I don't mean the jury room. Well, you can't go in the jury room. We're adjourned. Thank you. See you Tuesday morning. THE DEPUTY CLERK: All rise. *(Adjourned to January 20, 2015 at 9:15 a.m.)* * * * Page 559 INDEX OF EXAMINATION Examination of: Page JARED DER-YEGHIAYAN Direct By Mr. Turner . . . . . . . . . . . . . 366 Cross By Mr. Dratel . . . . . . . . . . . . . 421 GOVERNMENT EXHIBITS Exhibit No. Received 133A . . . . . . . . . . . . . . . . . . . 370 128D . . . . . . . . . . . . . . . . . . . 386 128F . . . . . . . . . . . . . . . . . . . 387 201H . . . . . . . . . . . . . . . . . . . 390 201I . . . . . . . . . . . . . . . . . . . 391 201J . . . . . . . . . . . . . . . . . . . 393 201K . . . . . . . . . . . . . . . . . . . 397 201L . . . . . . . . . . . . . . . . . . . 399 201M . . . . . . . . . . . . . . . . . . . 401 130A . . . . . . . . . . . . . . . . . . . 403 134, 134A . . . . . . . . . . . . . . . . . 405 130 . . . . . . . . . . . . . . . . . . . . 407 131 . . . . . . . . . . . . . . . . . . . . 409 Page 560 129E . . . . . . . . . . . . . . . . . . . 419 DEFENDANT EXHIBITS Exhibit No. Received B . . . . . . . . . . . . . . . . . . . . . 455 Page 561 Page 562 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA, v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant. ------------------------------x New York, N.Y. January 20, 2015 11:00 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York BY: SERRIN A. TURNER TIMOTHY HOWARD Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal Sharon Kim, Government Intern Page 563 *(Case called; in open court; jury not present)* MR. DRATEL: Thank you for your accommodations. THE COURT: These things happen. Too bad it happened to late at night for you, but here we are and it's all set at this point. It actually did have the advantage -- please be seated, all of you -- of giving me some additional time to go through some matters. I've got one and then possibly a second matter raised by the government in a letter this morning to go over. The main matter that I wanted to address before we start is the evidentiary issue left over on Thursday, which was the subject of the significant letter submissions that I received on the 19th from both sides. Are there other issues apart from the one raised this morning and the other that was the subject of the significant submissions that you folks want to raise? I just want to get a sense of how many things we need to address before we begin. MR. TURNER: There are three others. THE COURT: Are they short or longer? MR. TURNER: Two I think are fairly short, two in particular. One of which we'd like to address at side bar. THE COURT: Is that the one from your short letter? MR. TURNER: There's an additional one. THE COURT: Then is there any that you can otherwise raise and we'll knock those off and get them done? MR. TURNER: Sure. One is very short. We think an instruction should be given to the jury at some point that any redactions they see in the exhibits should not be taken to mean anything. They're generally to protect private information that might appear in the documents. Page 564 THE COURT: Mr. Dratel, do you have any opposition to an instruction along those lines? MR. DRATEL: No, just that it's not relevant. That's why it's redacted. MR. TURNER: And another issue we wanted to raise is during cross-examination on Thursday, the defense asked Special Agent Der-Yeghiayan about whether there were restrictions about what was sold on the site, that there were no assassinations, there were no credit cards, stolen credit card information. And as your Honor is aware, your Honor ruled originally that the government cannot introduce evidence of uncharged criminal conduct that occurred on the site, and we believe that the defense's question has opened the door to that. There were guns that were sold on the site. There was counterfeit apparel. There was stolen -- there's pirated software, etc. THE COURT: Let me ask you about that because one of the reasons for the Court's ruling was not only relevancy, but it was also that the basis for getting that information in required, I believe in some instances, getting through the hearsay objection for the photographs of the website which indicated the narcotics, that there's a coconspirator exception which the Court made rulings on. But for things like counterfeit Gucci belt, the question is, if you're going to say that counterfeit things were, in fact, sold versus there were advertisements such as X, I think there's a hearsay problem. If you say there were counterfeit things sold, I think we run into this problem. If you're going to say were you aware that there were advertisements for the following things and leave that open, that's a different alley. Page 565 MR. TURNER: There are a couple of points: First of all, I think the coconspirator exception would apply to the same extent the coconspirator exception doesn't have to apply to a charged conspiracy, it's just any conspiracy. And we continue to take the position that these statements are not even offered for the truth. It would be akin to somebody posting pictures of a grocery store with the items on sale and the prices. These are not statements, but they're evidence that there's something being sold there as reflected in the advertisement. They're offers. They're not statements with a truth value. THE COURT: That's I think the second avenue that I was opening up. My suggestion is, if you're going to say these are the things that were advertised, you were asked about certain goods and services that were not being advertised, were you aware of other things that were being advertised other than what we talked about? Yes, such as these types of advertisements. Page 566 MR. TURNER: Right. THE COURT: Are you going to go any further than that? MR. TURNER: No. We can stick to advertisements or we can simply strike the testimony that was already admitted and we don't have to get into those other goods, but we do think the defense opened the door to that sort of evidence with that questioning. THE COURT: Mr. Dratel, do you have a response to that, first, whether or not we eliminate it by just striking the information elicited as to what was not sold, just on the basis with sort of a short statement that you heard testimony about what may not have been sold and the only thing that's really relevant here is information relevant to the charges. That would be one way of handling it, and not getting into the opening of the door for the other pieces. MR. DRATEL: Right. I think with respect to opening the door, though, it didn't open the door in the sense that saying what is not permitted on the site, which was accurate, does not open the door to what was permitted on the site. So in other words, the government -- it's not that the testimony was inaccurate or misleading in anyway because I didn't say that anything that the government wants to put in was not offered on the site, only those specific things that were not allowed on the site. Page 567 THE COURT: I do remember the questioning because I actually had the same thought about it falling into the opening of the door for these other pieces. One of the implications was that really bad things, other kinds of bad things were not offered on the site, for instance, things which, to pick up on a theme I think has been developed, could not harm people; that as we have seen from the signature line of certain chats, the drugs don't jump off the table and harm anyone. So I think by implication since those documents are in, the question of whether or not guns were being sold, I suppose you could argue that they don't jump off the table and hurt someone either, but it's a little further afield. It's potentially opened. Why don't you tell me whether or not you'd be willing to strike the line? I would do it in a way that is very I think very light, which is you may have heard testimony about other goods and services that were or were not sold on the site. What's relevant to you, ladies and gentlemen, of the jury is the evidence that you have and it's for you to weigh that evidence as to what has been sold on the site. MR. DRATEL: Can I think about that for a little bit. THE COURT: Yes. The other issue, was there something else, Mr. Turner? MR. TURNER: There's a third issue we'd like to raise at side bar. THE COURT: Right. We have two side bar issues. Then let me deal with the issue which we have all spent I assume a great deal of time on over the weekend. And as is the case with rulings like this, I have read the cases which you folks have presented me with, for which I thank you, and also did rather exhaustive research on our own to come up with what is the right way to analyze this evidentiary issue. And I'm speaking now about the evidentiary issue left over from Thursday afternoon. I'm going to call it the MK issue for the Mark Karpeles issue, but it also can relate to something more generically described as an alternative perpetrator issue. Page 568 I have read the letters submitted by the parties. I have read the cases and I also went back and reviewed the transcript of our prior proceedings. One thing I would note is that the prior transcript did convince me that there were, having now decided how to analyze this issue properly, there were all kinds of things to which the government probably should have -- undoubtedly should have objected earlier and we would have ripened this issue before it had gotten so far down the road. Part of the confusion here is trying to differentiate between similar types of questions when certain questions weren't objected to and then others were objected to. But let's put that issue of whether there would be a waiver to the side for a moment and let me tell you how I analytically put this issue together. I want to start from the beginning, which I think is important which is asking ourselves as to any evidentiary ruling what is this case really about. This case is about whether this defendant, Mr. Ross Ulbricht, engaged in the conduct that is charged in the counts in the indictment. So then we get to what is relevant evidence? Relevant evidence is evidence which is probative of a fact in dispute and whether the defendant is Dread Pirate Roberts or was Dread Pirate Roberts at certain points in time but not other points in time is a fact in dispute. Page 569 Then we ask what's the relevance more granularly of whether the defendant was Dread Pirate Roberts? And that is because at certain points of time, there are certain pieces of evidence where Dread Pirate Roberts does certain things which the government has presented. If Dread Pirate Roberts at that moment is Mr. Ulbricht, then that leads to one set of possible inferences; if Dread Pirate Roberts at that point in time is not Mr. Ulbricht, then it leads to another. Now, a question which is, I think, floating around in here through this is whether or not the fact that there might be - and certainly the defense is arguing - another Dread Pirate Roberts, does that exculpate the defendant? Is it exculpatory, and that it may or may not. That will be up to the jury ultimately to decide. First, the jury will decide whether they believe in the defense theory, which it has a right to pursue as to an alternative perpetrator, and the alternative perpetrator, the defense alleges, is either "the" Dread Pirate Roberts or became Dread Pirate Roberts and then framed Mr. Ulbricht and turned over his identity to him at some point in time. Page 570 Now, only if the evidence relating to the Dread Pirate Roberts at a particular point in time where the reasonable inference can be drawn that it was not the defendant could it be exculpatory; in other words, you could have the defendant be Dread Pirate Roberts at one point in time, have somebody else be Dread Pirate Roberts at another point in time and had to go back to the defendant, that's not exculpatory except for the quantum of whatever the proof is in between. For instance, if the quantity of drugs, which could be a very relevant issue, takes hold during the period of time that the defendant was not Dread Pirate Roberts, that's one thing. Of course, if the defendant is shown to join a conspiracy for narcotics distribution at any point in time, a defendant is liable for all of the acts going backwards. So as a matter of law, we know this from the Gonzalez case, there are oodles of cases from Supreme Court case law that a coconspirator who joins a conspiracy is liable for the acts which occurred prior to that individual joining so long as those acts were reasonably foreseeable to the coconspirator. So whether or not the presence of additional Dread Pirate Roberts helps is a question to be determined first based upon an analysis as to whether or not there is a second - or even if Mr. Ulbricht is a first - Dread Pirate Roberts. Page 571 Now, since Mr. Ulbricht, his counsel conceded in the opening that he started Silk Road, the timing is unclear as to when and whether the defendant allegedly left Silk Road and whether or not there's a point in time when he becomes Dread Pirate Roberts before he hands over I think according to the defense theory the website. And the evidence appears to be from the government that the defendant was found at the time of arrest acting as Dread Pirate Roberts at the time of arrest. Whether that was for that one day or whether it had gone back in time and in fact covered the entire time will be for the jury to determine. So that's sort of the relevance. Now, the Court looks at relevance broadly as the Second Circuit requires under the rules under 104, but the Court also is mindful of balancing Rule 403, which is whether or not things that require trials within trials end up being unduly confusing, misleading to the jury, and so I have that in mind and I've had that in mind as I have proceeded. The evidence of third-party culpability and alternative perpetrator is admissible if there's sufficient evidence tieing a particular person or even if it's an unknown person to the offense. That's the Wade case, Second Circuit case which you both acknowledged and cited in your papers over the weekend, a 2008 case, but you do need some direct evidence of connection. That's the other point that the Wade case makes clear, because it's very possible to have suspicion as to more than one person and this apparently happens as you folks know all the time, whereas the investigation eventually focuses primarily on one and one is primarily then tried and the other may never be tried. Page 572 So the question ultimately boils down to whether this particular defendant did the particular acts which would relate to or amount to Counts One through Seven, not whether somebody else also did those acts at the same time, in effect, duplicating those efforts. So one issue is what does the defendant have that Mark Karpeles is, in fact, DPR if there's something that we're leading up to versus just trying to get that information out of the government's witness; in other words, whether or not there is going to be other evidence offered. I am mindful of Mr. Dratel's point that the timing of the turning over of the 3500 material makes certain aspects of this more difficult for the defendant because they simply haven't had time to develop all that they would have for Mr. Karpeles, but nevertheless, the defense theory has been known since at some point many months ago. It's been previewed even to the Court. So the fact of another DPR, whether it be Karpeles or somebody else, is certainly something which I assume the defense has developed to this point and, therefore, there may be lots of things which the defendant, if he has them, would be able to present as direct evidence of that theory. For instance, now, as we all understand, it's the government's burden to show that the defendant is or is not culpable of the offenses charged. The question is whether or not the defendant wants to try to rebut some of that evidence in a particular way, but it's the government's burden in the initial instance. Page 573 So, the question is whether or not the defendant has this, for instance, like chats with a third party showing that he's about to turn over the website, soliciting interest in somebody else wanting to take over the website; in fact conveying the private key, something which indicates that there was a moment when it was copied from another computer to a different computer. There might be any variety of ways which those of you who are more technically savvy than I am could use to demonstrate that, but it's the direct evidence of another DPR which is competent evidence. Now, we used the term competent evidence on Thursday and competent evidence, just to be clear, it needs to both be relevant as a threshold hold matter, which I've already now described, but it also needs to be admissible evidence under the rules and not subject to an exception under the rules. So it's direct evidence of somebody taking over the website, it's also circumstantial of someone taking over a website, so circumstantial evidence where various dots can be placed along a line and while it's not drawn in between it, a reasonable juror could draw the inference would be competent circumstantial evidence. Page 574 It's important, and this is where the difficulty comes in and it's a difficult issue for trial judges everywhere, to distinguish between what is speculation and what is circumstantial. There's a difference between what is circumstantial evidence and what is purely conjectural or purely speculation. There's a lot written by a lot of courts on where an inference becomes conjecture or where an inference is reasonably based on fact. The point is that the logical inference must itself be based on otherwise admissible evidence; otherwise, it does become conjecture. So there is lots of case law, which we have now all had an opportunity to slow down and read, which indicates that a person's subjective beliefs is simply speculation. There are certain instances where subjective beliefs may be admissible. Those are not pertinent here. That is, for instance, in certain instances not going to an ultimate conclusion of a case where an expert witness can offer certain opinions. Indeed, lay witnesses can also offer certain opinions, but they can't usurp the fact-finding role of the jury. So let's go back to our umbrella example. It's certainly okay for witnesses to discuss on the witness stand -- this is now the circumstantial evidence example I raised during the early part with the jury -- I saw individuals enter the courtroom with raincoats, I next saw them enter with umbrellas, I saw that there was water dripping off of the umbrellas. Those are facts which the witness is seeing. The witness can't say I know it's raining or I believe it's raining because that is ultimately for the lawyers to argue from the various facts which are put in as inferences. Page 575 So this is where we get to the first part of -- and I'm going to give you folks a list of what's okay and what's not okay, it's not all not okay and it's not all okay -- of Mr. Der-Yeghiayan. What Mr. Der-Yeghiayan thought and believed it's clear to me, having now reviewed the cases very clearly and analyzed from the beginning what is competent evidence and what is incompetent evidence, that his thoughts and beliefs are irrelevant. I've also gone back through the earlier portion of the transcripts and, in fact, the government stayed away from thoughts and beliefs, but he's been brought into it a lot on cross. The government did not object to numerous, numerous instances where he was asked about his thoughts and beliefs, and I think this led to the confusion. Let me just give you folks a cite of the Johnson case at 529 F.3d 499 at pin cite 501 and also the Garcia case, and there are a number of others which stand for this proposition. This is an especially important proposition when you're talking about an investigator or a special agent because the redirect examination that could lead from this is clearly error and you can't have one side, one-hand clapping. Page 576 The clear error is the following: If allowed to say I believed at one point in time that Mark Karpeles was the DPR, and what did you base it on? I based it on the following four sources of information, the redirect becomes, Did there come a point in time when you ceased to believe that? Yes. And who did you become a believer in in terms of their guilt? I believed it was Ross Ulbricht. Can you tell me now why? Yes. Because of the following 27 pieces of information, which then become essentially a summary statement that the government would normally do during its closing arguments. That kind of conclusory summarizing testimony as to drawing inferences for the jury that the jury would be drawing usurps the jury's fact-finding role and is clearly not relevant. What is relevant is direct knowledge and responses to that direct knowledge. For instance, before I go into probable cause, let me say that it's error for the agent to testify about opinions regarding any person's culpability, particularly clear with respect to the defendant, but the same principles apply to third parties. And that is true under 701 and the Garcia case I mentioned is a Second Circuit 2005 case, the Grinage case, another Second Circuit case; the Dukagjini case, a Second Circuit case. We're not the first court to have confronted this question. And then also the Carmichael case which is a Second Circuit case from 2005 where the Court then talks about the difficulties of opening the door in that kind of case. Page 577 Let's talk about probable cause. In terms of probable cause, there have been other instances where individuals have been asked whether or not there was probable cause in their view, and that has been precluded across the board on the basis that it's a legal conclusion; that the concept of probable cause is a legal concept. Is there probable cause to believe a crime has been or is about to be committed? So it asks for an answer to that legal conclusion, and so whether it's put into the form of a statement, "I believe that there's probable cause" or in terms of a physical manifestation of that, "I sought a search warrant implicitly because I believed there was probable cause," that is similarly based upon the legal conclusion. Now, with all of that said, as we all know, there are a series of cases which are quite clear that the defendant is entitled to present a defense theory. There is a defense theory here that's clear that the defendant is pursuing as to an alternative perpetrator and he is certainly allowed to present competent circumstantial and competent direct evidence supportive of those theories, and I am in no way precluding the defendant from presenting a witness who may be able to suggest that he or she knew the real Dread Pirate Roberts and it wasn't the defendant or whatever various ways this could be shown. Page 578 And there are certain cases that are inapposite to this case but that are supportive of it, of that principle. The Alvarez v. Ercole case, in that case, there was a report of another suspect. The issue there was that the lead for the other suspect was never pursued. Here, that's not the issue. There was an investigation that was doing whatever it was doing, and it was remanded on the basis of a habeas petition that they should have allowed it to be inquired into not the truth of whether that other person was guilty or not, but of the adequacy of the investigation. In the U.S. v. White case, which is a 2012 case, in certain instances, that case indicated that the charging decisions could be admissible. There, there were other occupants of a vehicle who were charged with possessing the very firearm that then the defendant was charged with possessing. It's not apposite. And then the Wade case we talked about, the Wade v. Mantello case is supportive of the Court's view. In terms of the Arbolaez is a case that we found which is at 450 F.3d 1283 at 1290, and it's an Eleventh Circuit case, 2006. That's another case talking about probable cause in connection with an investigation being inadmissible hearsay and the statements only allowed -- if they were allowed in, it would be only for the purpose of showing some amount of truth. Page 579 So here are the questions, which, based upon all of these principles of law, appear to the Court to be clearly off limits, and then I'm going to give you the ones which I think are on limits. Off limits are things such as the following, these questions or reasonable derivatives of these questions: Did you suspect Mark Karpeles? The word "suspect" is a conjectural suspicion. Now, I will say that was asked in spades with no objection by the government earlier on. It was asked two or three times on Friday, but we'll get to what we do in terms of the government's application in its letter to strike, which is somewhat complicated. But did you suspect Mark Karpeles? There should be no further questioning into that. Did you believe Mark Karpeles was DPR? There should be no further questioning into whether or not this witness believed -- the dots can be drawn, but the belief he needs to stay away from. Do you suspect Ross Ulbricht? Do you believe Ross Ulbricht was DPR? Similar, the same witness can't do one, he can't do the other. Does he suspect that Mark Karpeles operated Silk Road? Does he suspect? Does he suspect Mark Karpeles did not operate Silk Road? Both of those are equally off limits. Any descriptions of belief that he has are off limits. However, what's not off limits are things like: Did you see X? Did you do Y? Did you investigate X? Yes. No. Did you see X? Did you see Y in connection with that work? Page 580 Now, the interview, this is now the Forbes interview we talked about that on Friday, and that is hearsay, and I don't think there's much of a debate about the content of it being hearsay. Whether or not this particular witness believed it sounded like the man on the moon, it doesn't matter, or that he believed it sounded like Karpeles doesn't matter because that's his subjective belief. Now, in terms of the offer, the offer to provide, this is the Karpeles offer, through his lawyer through another AUSA etc. to provide law enforcement with information as to who the real DPR was is also not relevant. The offer is the fact of the offer. That's the only point of that, because we know that there was no information. We know that Karpeles did not provide, based upon the government's proffer, he never provided that information. So it's not as if there's some secret name that comes out. So the fact of the offer itself is not relevant to a disputed issue of fact. It is not a disputed issue of fact relevant to this defendant's culpability whether or not an offer was made by somebody else to potentially divulge information. And it's really a way of, I believe, getting out whether or not Karpeles had inside information about Silk Road. If he did, he did, but that's a separate question from whether or not Ross Ulbricht can be tied himself through competent evidence to Silk Road in the manner the government has been suggesting. Page 581 In terms of the 807 and whether or not that gets over hearsay, first of all, I find that the fact of an offer upon analysis and taking it apart as to what each segment is for is irrelevant, but is it probative? Is it more probative than anything else that can be offered? The answer is no. It's really inviting the jury to speculate. And the other issue is that Karpeles was self-interested in making any offer at the time and, therefore, it's unclear whether he actually had any information. So the fact of the offer is suggestive of a fact of real and potentially inferentially reliable information and Karpeles -- there's no indication that he would have provided that. Now, what would be okay: Any chats on the website that DPR was handing off the website or that Mr. Ulbricht, during the time that he was in charge of Silk Road by his own admission or by his counsel's assertion, was handing off the website; evidence as to whether or not, for instance, Ross Ulbricht, when he was being viewed by law enforcement and they were tailing him, which this information has some information about, he may have limited information, but whether or not Ross Ulbricht was going to work, for instance. Was he going to an office, was he doing something else, does he effectively have an alibi defense? Are there reviews of bank accounts that reveal information that indicate payroll coming in from a third party? Is there evidence that another account was receiving Silk Road commissions looking at the account numbers and tracing the numbers through? Page 582 He can challenge the recollection of the website, challenge the buys, challenge the facts relating to the arrest. He can also seek to introduce evidence that others were tied to the servers; that there were other individuals who were leasing the servers; that Mark Karpeles or somebody else was leasing the servers; that Mark Karpeles did any number of things, X, Y, Z; that Mark Karpeles had a website if he's able to show it through a witness with competent technical evidence that the website had certain aspects of its platform that were replicated in the platform of Silk Road, that would be fair game. There are other questions which were asked which were fairly asked, which is, was Mark Karpeles running MtGox? That's perfectly appropriate. Many of the questions that Mr. Dratel asked were absolutely appropriate and are supportive of the defense theory. The questions that were not appropriate were the ones that strayed into the words "belief" and "conclusion," but where they were simply asking about facts, they are perfectly appropriate. *(Continued on next page)* Page 583 THE COURT: So what we'll have to do -- and that's the Court's ruling on this. Much of what, as a result, the defendant wanted to go into in terms of exploring the search warrant application is off limits, because the very question that was to be asked, which is what are the four sources of information that you had, X, Y, Z, and then, based on that, what did you do next. Now having reviewed the cases -- and they seem to be clear in this regard -- so long as he is able to present the witness -- the defendant is able to present direct evidence of his own defense of another perpetrator, getting the speculation of a third party, even the investigator, is an improper way to proceed. So those questions, in that way, are off limits. But the other questions of direct evidence through this witness, who had a lot to do with the Silk Road website, so if he happened to look at all the chats and looked at all the chats of DPR and/or any account associated with this witness, he can be crossed on whether or not there is clear evidence of a handoff. And the jury will then be given the opportunity to draw its inference as to whether there was or was not a handoff. This witness cannot say whether there was or was not a handoff, but he could certainly present evidence in that regard; there is no doubt about that. What we should do, I think, is there are some questions. I've got a whole bunch of them that are flagged here. I am happy to hand over my copy of the transcript to counsel for everybody to review. You need to figure out, to the extent anybody wants to go back on certain Q and A's and to the "belief" questions and the "conclusion" questions, which were allowed to go, I don't want to just do a global strike because many of the questions were fine. So the question is going to be which ones do you want to strike and does the government have a view as to how to do this without creating more problems? Page 584 So I'm not going to do it when the jury first comes out. I will take it up at another time. And I would like it to be very specific and have you folks confer on it. But when I flagged things, I flagged things which I think are also appropriate. You will see, based upon what I just said, what will jump out as you as unobjected-to questions that, based upon the Court's review of all the case law, I now believe would have had appropriate objections sustained but they were let go. So let's take it step-by-step because I don't want to eliminate things which the defendant elicited fairly, and we have to be careful as we proceed now that we do have a live objection. All right. Mr. Dratel, I know you don't agree with my ruling, but do you understand the parameters that I have set? MR. DRATEL: I think so. I have to say, though, that with respect to the offer by the attorney, it is not about -- it is not about whether he actually had information. It is the fact that someone who is under investigation is offering to implicate someone else in return for immunity from all charges that the government could bring against them -- money, business, or whatever. And also, we don't have to prove anything, and all the cases are not about proving -- Page 585 THE COURT: You don't have to prove anything. But if you want to rebut something through cross-examination, there are limits. This is part of what comes up in the 30 cases which you all cited to me and my own research. You know, of course, there are limits to cross-examination when we start to get too far afield. Because the next question will be, well, what was the outcome of the interview? And this is a witness who doesn't have that. MR. DRATEL: This is his own question -- THE COURT: No. No. No. The government will have to be able to get that. And it is too far afield. So you can show that there was another perpetrator. I am by no means foreclosing your, you know, your attempt to build that defense theory by showing that your client, or whomever had certain user names, whatever the user names are, handed off administrative capabilities to somebody else to take over that role for some period of time. MR. DRATEL: But that is not the standard in these other cases, and the reversals and Ercole, Alvarez v. Ercole is a perfect example and -- Page 586 THE COURT: Mr. Dratel, I have read those cases, and I believe that they are squarely distinguishable. I mean the Ercole case, as you know, was a very particular kind of case where not only had somebody else been implicated but somebody else had been essentially shown to be likely to be the guy. And they just didn't -- they had the name. They had the phone number, or the contact information. I can't remember how it was. And then they just failed to follow up. It is different. MR. DRATEL: But it's only different as a matter of degree. If the failure to -- it was the refusal to permit cross-examination as to that issue which was the basis for the reversal. And it was not -- and it is not a question of I have to have a photograph of DPR and it is not Mr. Ulbricht. I can establish it by inference. And just the way the government is establishing its case by inference. THE COURT: You could certainly establish it by inference, but that is why I want to differentiate between you've got to have some information that Karpeles in fact either had information on DPR or that's reliable, and/or if you are going to build Karpeles up as -- is it your view that Karpeles was not the real DPR, or is it your view that he was the real DPR? MR. DRATEL: My view is that he could be the real DPR. THE COURT: Do you have any information, other what you brought out and what is in the 3500 material, that you can proffer that draws the connection that the Wade case and the other caress say you have to have before we go off on this road? Page 587 MR. DRATEL: I can do cross-examination. I'm not required to have a witness who comes up and does that. We have other information about the fact that there are multiple -- just so it is clear what our theory is. Our theory is that Mr. Ulbricht created the website, got out a couple of month later, did not come back in at any point until the very end, was not in at the very end. He was not in a conspiracy, and he was not operating the website. The fact that he had -- what the evidence shows about what was on his laptop, fine, we will explain. THE COURT: OK. MR. DRATEL: But -- THE COURT: All of that, of course, you are welcome to explain, and you are certainly welcome to cross-examine this witness. I'll tell you. I feel very comfortable in a careful -- and with the Ercole case, it is a 2014 case. It is an unusual case because it is a reversal of a state court case. There is a remand on habeas. I read it a couple of times. But I'm comfortable. I've also read the Kiley v. White case more than once in the context of this and other cases. I'm comfortable with my ruling. Page 588 My question to you right now, so we can get going, is do you understand the parameters of what you can ask? MR. DRATEL: I think so. But I just need to complete the record just to preserve it, because with respect to Kyles v. Whitley, the Supreme Court case, Beany, the alleged alternative perpetrator, they didn't have proof. They did it all through the police investigation. They didn't have additional witnesses. They had the police. And this is combined with the police investigation issue. They are inextricable in many respects, and it is not about -- it is not just about whether it was shoddy but it is about other things that I'll get into on cross with this witness that I don't think are objectionable at all because they go to motivations and other things in terms of the investigation. So that's all part of the same piece. And I can build that by inference. I am permitted to do that by cross and by inference. THE COURT: You are permitted to do that through competence evidence through cross and through inference. The question is going to be what is appropriate for this witness to speak to, and it will be things that he perceived with one of his senses, as witnesses do, as opposed to what he may have held as a belief at one point in time. MR. DRATEL: I understand that part. THE COURT: I am not going to let them ask did you believe Ulbricht did it, tell me. And then, yes, by the way, tell me the 27 reasons why. That would be -- Page 589 MR. DRATEL: That would be his direct. THE COURT: That would be his redirect. MR. DRATEL: I am saying that would be his direct. THE COURT: No. Well, you are talking about those are inferences versus his conclusions. All right. So if you have any questions about a particular issue that you want to raise that I am not letting you raise, then present it to me, but otherwise we'll proceed with this. I'm not right now striking any of the testimony that came in. Frankly, a huge amount came in on Thursday. It will be up to really the government's burden to figure out what portions they believe are appropriately struck and then to discuss whether the defense agrees not as to whether or not they agree with the evidentiary ruling but given the Court's parameters, and if the defense does not agree with any of it, then I will just make a ruling. MR. DRATEL: There is also a waiver aspect of it. THE COURT: There is a waiver aspect of it. We haven't talked about that or briefed it. That is why I don't want to do that right now. It is complicated because it is interspersed. There are completely unobjectionable pieces interspersed with objectionable. You will be able to say Karpeles was out there. He had the computer expertise. He owns Mt. Gox. There are going to be certain things that are still going to be, I believe, in the record. We'll have to take a look at how the Q and A's come out ultimately, but there will be facts. Page 590 All right. Let's take up the two sidebar issues. Mr. Turner. MR. TURNER: Your Honor, I just wanted to make clear. In terms of -- we can look at the transcript and come up with proposed areas to strike. I just want to be able to do that before redirect, because if certain testimony is not stricken, then we would want to potentially redirect the witness a certain way to cure testimony that did come in. THE COURT: Can you have some of your colleagues help you with highlighting what you think? MR. TURNER: Yes, your Honor. THE COURT: And as little as possible. MR. TURNER: Yes, your Honor. THE COURT: I mean, there is one way of doing it which is, ladies and gentlemen, you heard the witness talking about his belief and views and suspicions about an individual. You should disregard those comments because his beliefs and views and suspicions are not relevant. It will be for you to decide. You are going to be presented with the evidence here as to this defendant and anything else that's important for you to consider, and you can decide whether or not that is sufficient to draw those conclusions yourself. Page 591 That would be one way of doing it. And then we would have to, for purposes of later on, determine if we have questions later for the jury to have read back, whether or not some of those pieces are then excised. MR. TURNER: OK. So we'll take a look -- we'll have somebody on our team take a look at that and see if we can offer specific testimony to excise before redirect. THE COURT: All right. If I understand it, there are two matters at the sidebar? MR. TURNER: Yes, your Honor. *(Continued on next page)* Page 592 *(At the sidebar)* THE COURT: All right. MR. TURNER: One is simple. One is more complicated. The simple one is if my back is turned -- *(In open court)* THE COURT: You know, I'm sorry, could you -- it is OK for you folks to talk, but could you talk outside because, actually, we have a hard time hearing because we whisper up here, or whisper lower so we can hear what we are saying here. *(At the sidebar)* MR. TURNER: So while counsel's back is turned as the case is going forward, I have heard from multiple people on my team now and multiple people in the audience that often during sidebars the defendant is turning, making contact with his family and speaking to his family in a way that multiple people have told me seems geared toward generating sympathy. So I would ask that any such communications be outside the presence of the jury. THE COURT: Can you speak to your client? MR. DRATEL: OK. I mean, you know, obviously his family is here. They are used to visiting him on a regular basis and they are not going to be able to visit him during trial because he is here. MS. LEWIS: Because of his move they are not able to visit him at all right now. They just got that paperwork. It may be weeks before they see him, including his sister who is in from Australia. This may be his only chance to have contact with her. Page 593 THE COURT: OK. I am not concerned about, so long as there is no inappropriate communication with him, just turning and saying "Hi, mom" at some point when the jury is not in the room, because there are lots of times -- now, for instance -- when the jury is not in the room. But when the jury is in the room, he should just continue looking forward. By the way, we are going to move the -- we did move the monitor. Terrific. So you will tell him. MR. DRATEL: I will. *(Pages 594 through 614 sealed by order of the Court)* *(Continued on next page)* Page 594 Page 595 Page 596 Page 597 Page 598 Page 599 Page 600 Page 601 Page 602 Page 603 Page 604 Page 605 Page 606 Page 607 Page 608 Page 609 Page 610 Page 611 Page 612 Page 613 Page 614 Page 615 *(In open court)* THE COURT: We're going to go until 1 o'clock, as opposed to 12:45. Because of the fact that the jury had to be waiting around, I have had Joe order lunch for the jury to be brought in sort of an attempt to do something for them. But we'll go right 'til 1 o'clock. At 1 o'clock I have a sentencing in here. It is a narcotics case. And so I will need to have space, probably actually on this side because it will be somebody who has a marshal there. People are welcome to stay for that but I will need room on the tables. Go ahead and bring in the jury, Joe. Oh, the witness. Is the witness coming? THE CLERK: Yes. *(Pause)* *(Continued on next page)* Page 616 THE CLERK: All rise as the jury enters. *(Jury present)* THE COURT: All right. Ladies and gentlemen, let's all be seated. And I want to apologize for our late start today. A couple of different things result from that. We do have lunch coming in for you folks. We will go to 1 o'clock and then we'll stop for our lunch break. I do apologize. We try not to have these kinds of things take up your time, and we'll try to use your time as efficiently as we can. We wouldn't have had that delay unless it was necessary, and I do apologize. I want to remind you, sir, Mr. Der-Yeghiayan, that you are still under oath. THE WITNESS: OK. JARED DER-YEGHIAYAN, Resumed, and testified further as follows: THE COURT: Mr. Dratel, you may proceed, sir. MR. DRATEL: Thank you, your Honor. THE COURT: Oh, one thing. I had a note to myself. Ladies and gentlemen, from time to time in documents you see redactions, which are just sort of black marks through documents. That is just because certain information is irrelevant, and so just don't even think about it. Just sort of ignore it. Proceed. Page 617 MR. DRATEL: Thank you. CROSS-EXAMINATION (Resumed) MR. DRATEL Q. Good afternoon, Agent Der-Yeghiayan. A. Good afternoon. Q. Have you ever heard of someone with a username "inlightof"? A. I have. Q. And have you ever identified that person? A. No, I did not. Q. And that was a person you were looking at at some point as DPR, right? MR. TURNER: Objection. Form. THE COURT: Sustained. Q. And we talked the other day about "peaceloveharmony," someone with that username, right? A. Yes. Q. That was someone who was, as you described it, sitting on DPR's profile for a few hours a couple of days before Mr. Ulbricht was arrested, right? A. Yes. Q. And you had asked your law enforcement colleagues whether it was them, and the people on the arrest team, it wasn't any of them, correct? A. That is the reply I got, yes. Q. And did you ever learn who peaceloveharmony was? Page 618 A. Not that I can recall. Q. Now, was there a user or someone named Mr. Wonderful? MR. TURNER: Objection. Q. Do you recall that? MR. TURNER: Objection. 401. MR. DRATEL: I didn't hear the objection. MR. TURNER: 401. THE COURT: Hold on one second. I don't know why it would apply. I will allow a few -- let me allow a few questions to develop that. MR. DRATEL Q. Mr. Wonderful was involved with Scout, correct? A. Yes, he was. Q. And who was Mr. Wonderful? MR. TURNER: Objection. Foundation. Q. If you know. THE COURT: If you know. Just testify if you know. MR. TURNER: Objection to form. THE COURT: I will allow it. You made proceed. A. Mr. Wonderful was operated by another HSI agent. Q. And was there a question -- was there a discussion between Scout and DPR about Mr. Wonderful? MR. TURNER: Objection. Form. Q. In the forums or in the private messaging system that you were able to monitor? Page 619 THE COURT: I will allow it. Overruled. A. I believe there was. On the forums you are asking? Q. No. Between DPR and Scout on the Silk Road system in one form or another. A. Later on I learned of that there was discussion between them. Q. And that was one of the reasons for a falling out between DPR and Scout? MR. TURNER: Objection. Foundation. THE COURT: Yes. So that is sustained. A. That -- THE COURT: No. That was sustained. So he will ask another question. THE WITNESS: Sorry. MR. DRATEL Q. But there was talk between Scout and DPR about whether Mr. Wonderful was law enforcement, correct? MR. TURNER: Objection. Foundation. THE COURT: Well, I think that the issue is did you actually review the communications between Scout and Mr. Wonderful? MR. DRATEL: No, between Scout and DPR, your Honor. THE COURT: Did you review the communications between Scout and DPR? Page 620 THE WITNESS: I can't recall if I did. I know there were some that were shared at a later date, but I don't know if there actually was, if I actually saw the screenshots or this was something that was told to me. THE COURT: I want you to put aside something that may have been told to you but in terms of what you recall seeing, go ahead, and, Mr. Dratel, you can ask the question in that context. Q. There was discussion between DPR and Scout as to whether or not Mr. Wonderful was law enforcement, right? MR. TURNER: The same objection. THE COURT: Well, if he knows. A. I don't recall seeing screenshots. There may have been some that were shared at a later date but I can't recall seeing them. Q. And do you recall that Mr. Wonderful and whether or not he was law enforcement, or she, was the reason that DPR took over Scout's account for awhile? MR. TURNER: Objection to form. Foundation. THE COURT: Sustained. You may re-ask it. Q. Well, DPR took over Scout's account for awhile, correct? A. Yes. Q. And wasn't that in order to investigate the Mr. Wonderful situation? Page 621 MR. TURNER: Objection. 401. THE COURT: I think the issue is do you have any information regarding why DPR took over that account? THE WITNESS: That was relayed through a source later on, yes. THE COURT: Let's put aside what you may have heard from a third, a person, a source. That's a person? THE WITNESS: Yes. THE COURT: OK. Did you see any information in connection with your review of the screenshots of Silk Road that indicated to you, at least words on a page, as to why DPR -- THE WITNESS: Took over that account? THE COURT: Took over that account. THE WITNESS: Not that I could recall. THE COURT: All right. You may proceed. MR. DRATEL: Thank you, your Honor. *(Pause)* Could you look up Government's Exhibit 126A. It is in evidence. A. OK. Q. Take a look at where it says, "Hey, gang," do you see that post? A. Yes. Q. This is July 12, 2013, right? Page 622 A. Yes. Q. So you reviewed a lot of communications involving -- withdrawn. Here it says "Cirrus," right? A. Yes. Q. And Cirrus is the same as Scout, right? A. The person that originally operated the Scout account created the Cirrus account, correct. Q. And this is kind of when they created the Cirrus account, right? MR. TURNER: Objection to form. Q. It says "post," as far as we know? THE COURT: I will allow it. A. This is about the timeframe, yes. Q. And you reviewed these; this is not when you were operating the account, right? A. This is not when I was operating the account. Q. So you reviewed a whole host of Cirrus and, before that, Scout's messages, right? A. There were other messages that I reviewed that were in the account, yes. Q. And one of the reasons you did that is because if you are going to be playing that part, you really have to know what's going on, right? A. That is correct. Page 623 Q. So let's read it: "Hey, gang, we have a new moderator going by the name Cirrus. We used to know him as Scout. Cirrus has always been dedicated to our common goals and the community at large and we've put what happened surrounding Mr. Wonderful behind us so he can come back to the team." Right? A. Yes. Q. So reading that, you had to find out what was going on with Mr. Wonderful, right? A. I was talking to that agent at the time so they had the idea -- MR. TURNER: Objection. Hearsay. THE COURT: Don't go into what your conversation was with that agent, but you could talk about what steps you took. Q. Did you go back and read posts having to do with Mr. Wonderful? A. I didn't have access to the Scout account to go back to read that. I only had access to the Cirrus account. Q. Now, the URL, the onion address for Silk Road, changed in December of 2011, correct? A. That sounds about right, yes. Q. And also around that time Silk Road instituted a new bitcoin system, right? MR. TURNER: Objection. Foundation. THE COURT: Hold on for one second. Page 624 MR. TURNER: 804. THE COURT: Well, if you know. As to everything, only testify if you know a fact. Don't speculate or guess. And so the question is do you know whether or not around that time Silk Road instituted a new bitcoin system? THE WITNESS: I don't recall about a new bitcoin system. *(Continued on next page)* Page 625 MR. DRATEL Q. I'll show you what's marked as 3505-3602 and ask you just to review the last paragraph and when you've done that, let me know. A. Okay. Q. Does that refresh your recollection that as of December 30, 2011, Silk Road instituted a new bitcoin system? A. I believe what it did is it -- it allowed multiple accounts to deposit bitcoins, so it was something that was different about the bitcoin system, yes. Q. They instituted a change? A. As far as I recall, yes. Q. Now, in June of 2011, the site Silk Road went down for a little bit, right? MR. TURNER: Objection; time frame, form. THE COURT: Hold on. June of 2011? MR. DRATEL: Yes. THE COURT: All right. If that's your recollection, you may testify. Go ahead. A. I wasn't aware of Silk Road at that time. Q. That's not my question. You know that in 2011 the site went down, right? MR. TURNER: Objection; foundation. THE COURT: Well, the foundation is only about what he -- I don't want you to say anything you don't know. At any point in time over the course of your investigation, did you learn that in June of 2011 -- did you learn whether or not in June of 2011 a new bitcoin system was implemented? Page 626 MR. DRATEL: No. It's about the site going down now. THE COURT: Do you know whether or not the site went down in June of 2011, not what you knew in June 2011, but later on did you ever learn that there had been an outage? THE WITNESS: There were posts that reflect that I believe on the forums, and there's I think articles that said that, yes. Q. So that in June 5, 2011, the website posted a message saying "Silk Road is currently closed to visitors; this will be reviewed on July first and the site will probably be reopened sorry for the inconvenience." Right? MR. TURNER: Objection; foundation. This document is not in evidence. THE COURT: I think that he's talked about his recollection. Did you ever determine whether or not the site had in fact gone down? THE WITNESS: I couldn't confirm it, no. THE COURT: One way -- did you try one way or the other? THE WITNESS: There was no way for me to. Page 627 THE COURT: It might have gone down, it might not have gone down. You don't know for sure? THE WITNESS: I don't know for sure. THE COURT: You can continue. Q. But that post was made, right? MR. TURNER: Objection; hearsay. THE COURT: I'm going to allow it. A. The post was made; yes. Q. And there were posts -- THE COURT: Let me be clear, with that particular objection, that means that the witness is testifying about what he saw or read. He doesn't know if it's true or not, but he saw a post with those words on it that had that information on it. Whether it's true or not is another question. Q. It could have been some other reason why the post was made, right? A. I'm sorry? Q. It might not have been a technical problem with the site. It could have been another reason why that post was made, right? MR. TURNER: Objection; calls for speculation. THE COURT: Don't speculate. Sustained. Q. And the silkroadmarket.org, the page that was available on the ordinary Internet that you testified about, that stopped operating in April of 2012, correct? Page 628 A. That's correct. Q. Now, with respect to forum posts, with respect to PGP keys that we were talking about, right, last week, there's no customized version of a PGP key? Withdrawn. A PGP key is generated by a computer at random, right? A. It's created when you create a new key; yes, it's created by the computer. Q. So it doesn't have any specific identifying information about the person who is creating the key, in other words, their initials or anything or numbers or any kind of -- it's not like a password where you would choose to put in the identifying information so that you'd remember it, right? A. Just on the profile itself can you -- it's customizable to enter in certain information, like a name or an email address. Q. No, I'm talking about the PGP key. A. Okay. Q. The PGP key is not like a password in the sense that you put in identifying information. It's generated by the computer? A. You're saying, like, the output? Q. Yeah, the actual key, the text block? A. Yeah. It's random digits and numbers; yes. Q. And with respect to -- talked about computers and UTC time. In fact, you yourself acknowledged in one of the chats that UTC time -- you assumed that all the computers were on UTC time? Essentially the computers ran on UTC time, right? Page 629 MR. TURNER: Objection; form, hearsay and relevance. THE COURT: Hold on one second. Let me read it. Why don't you restate the question. I'll allow a form of that question. Q. You recall a chat with DPR in which you said that essentially all our computers are on UTC time? MR. TURNER: Objection; form and foundation. THE COURT: I will allow it. You may answer. A. I believe there was a chat, yeah, that we were talking about the servers for Silk Road. Q. I'll show you what's marked as Defendant's F for identification and ask you just to review it. A. Okay. Q. Do you recognize it? A. It's a screen shot that I would have taken of a chat that was on the computer -- Q. Between you and DPR? A. No, the person that operated before. Q. And so, I -- MR. DRATEL: I move it in evidence, your Honor. MR. TURNER: I have several objections, first "the person who operated before" needs to be clarified. And if it's being offered for truth, then we object on hearsay grounds. Page 630 THE COURT: Somebody needs to hand me a copy of this document. MR. DRATEL: I'm sorry. THE COURT: That's all right. That's okay. I didn't know if I needed to look at it. I have the witness'. Let me take a quick look. All right. As of August 2, 2013, were you cirrus? THE WITNESS: August 2, I was; yes. THE COURT: All right. And how about July 23? THE WITNESS: I was not. THE COURT: You were not cirrus on July 23rd? THE WITNESS: No. THE COURT: All right. Did you take this screen shot that's been marked as Defense Exhibit F as in frank? THE WITNESS: Yes, I believe. THE COURT: And you took it on or about August 2 at the top left? THE WITNESS: That would be correct; yes. THE COURT: Was it a true and accurate reflection of what appeared on that page at the time you took it? THE WITNESS: It is. THE COURT: All right. I will allow this in, but the content of the messages themselves are not in for the truth, but you can proceed, Mr. Dratel. MR. DRATEL: Thank you, your Honor. Page 631 *(Defendant's Exhibit F received in evidence)* Q. See where it says "cirrus." It says "I always just assume we all live in UTC (or our computers anyway.)" Right? A. I do, yes. Q. And that's because essentially computers can be configured to run on any timezone, right? MR. TURNER: Objection; foundation. THE COURT: Sustained. Q. A computer can be configured so that the timezone on the computer can be anything that the operator inputs, right, the person who is operating the computer? A. That's correct. Q. Now, we talked -- you said that you had seen some messages in which the DPR PGP key had not been validated, correct? A. I believe there were times that he -- other people weren't able to validate a signed message by him, but then that would follow up with him I think reissuing another signature. MR. TURNER: Objection; hearsay. Q. You saw this on the site? THE COURT: The objection is sustained and that answer is struck. Q. But you saw that on the site? THE COURT: Why don't you reask the question and then we'll get a clean -- Q. There were some times when the signature was not valid, correct? Page 632 MR. TURNER: Objection; foundation. THE COURT: Let's start the question over again and then we'll take it one by one, because if he saw with his own eyes these kinds of things, then he can testify to it. Mr. Dratel, you may proceed. MR. DRATEL: Thank you, your Honor. Q. So you saw instances in which the PGP key was not validated from a message from DPR, correct? You saw that on the forum? MR. TURNER: Same objection; form and foundation. THE COURT: First of all, did you ever see -- were any of your messages that you tried to validate not validated? THE WITNESS: Not that I did; no. THE COURT: During the course of the time that you were using the Silk Road website, did you become aware of others who at least indicated that they had messages that had not been validated? THE WITNESS: There were times that there were posts made that the -- that another user might say that they can't validate a signature. THE COURT: Did you follow up to determine whether or not you could validate that particular message on your own? THE WITNESS: I did not. THE COURT: So you don't know whether it's, in fact, the case that they couldn't validate it or if they were just saying that? Page 633 THE WITNESS: I don't know why it wasn't validating for them at the time. THE COURT: But you saw it there? You saw the posts? THE WITNESS: I did see the posts. THE COURT: All right. Q. Government Exhibit 127B, please, if we could focus on the top part. Do you see the part right above 6:12:15 p.m. where it says "encrypted OTR chat initiated." And then it says "dread@" and there's an onion address, and it says "identity not verified." Right? A. I do. Q. And that essentially comes before every one of these Pidgin chats, right? A. I believe that, yeah, it was on every time that we initiated a chat. Q. And you said you used a program called Adium, right? A. That's correct. Q. And Adium gives you the ability to authenticate the other side of the chat, correct -- A. I'm not aware -- Q. -- in a way that can verify what's not verified on that? A. I honestly don't know if it can or cannot. Q. But you never did that -- you didn't use any kind of verification process in your chats with DPR, correct, like that? Page 634 A. No, I did not. Q. And on your side, you said that there were certain accounts that could have more than even one agent working, right? A. What type of accounts? Q. In other words, Silk Road accounts; there are certain Silk Road accounts that were operated by more than one agent? A. There were ones from time to time, yes, they were operated by multiple agents. Q. So there's nothing to tell you whether on the other side of that, an unverified chat, whether there's more than one person or who it is on the other side, correct, other than someone coming on as dread, right? A. There's no way of knowing how many people are operating that, no. Q. Now, I want to go to Government Exhibit 130, please, Government Exhibit 130, and this is the piece of paper recovered from the trash from Mr. Ulbricht's apartment in San Francisco when you searched it after his arrest, right? A. Yes, it is. Q. And it's got notes about ratings, right? A. That's correct. Q. Let's go to Government Exhibit 131, please. So if we go down to the bottom, the bottom of -- I guess also 130A, no. I'm sorry. One second. If we can enlarge that a little bit. Page 635 So this a process, going to the first post, and the posts go from bottom to top essentially, not chronologically. The oldest post would be at the bottom and the newest post would be at the top? MR. TURNER: I don't recognize this exhibit. THE COURT: What exhibit is this? MR. DRATEL: 131. THE COURT: GX 131. MR. TURNER: I see. Okay. Third page. THE WITNESS: Yes, I believe so. Q. So, the first date that this starts is in August, right, 2013? A. For this -- Q. August 11, 2013? A. Yes, I believe so. Q. And it talks about undergoing an overhaul of the ratings system, right? A. It does. Q. And this is DPR initiating it, right? A. It is. Q. And then there's another post on the 31st of August, right? A. Correct. Q. And then there's another post on the 12th of September, right? Page 636 A. Yes. Q. And these posts contain detailed discussion mostly from DPR about ideas for the ratings overhaul, right? A. They do. Q. So that's been going on as of the date of Mr. Ulbricht's arrest, it's been going on for seven weeks or so, right? A. Yes. Q. And these handwritten notes found in the trash are related to a project that DPR has been posting about for two months? A. It appears so, yes. Q. And he needed to take notes from this? MR. TURNER: Objection; calls for speculation, foundation. THE COURT: Sustained. Q. Now, an important part of your investigation was trying to find money, right, bitcoin, correct? A. Yes, it was. Q. And we went back on Thursday, bitcoin is anonymous but there's a block chain that has every transaction, right? A. Yes, it does. Q. And it's public? A. Yes, it is. Q. At some point, in October of 2012, Silk Road split some of its accounts up? MR. TURNER: Objection; form and foundation. Page 637 THE COURT: Hold on one second. Sustained. You can come back at it. Q. Did your investigation establish that Silk Road had split, based on your analysis of the block chain of Silk Road looking for accounts that could be linked to Silk Road, that Silk Road had split a main account into other accounts? MR. TURNER: Objection; same objection, form. THE COURT: Sustained. Q. At some point you identified some of the Silk Road accounts, correct? A. Yes, there were accounts we believed belonged to Silk Road. Q. That was in April 2012, right? A. I believe the date is -- sounds right, yes. Q. And part of what you're looking for is movement of bitcoins, people cashing out accounts in unusual amounts, correct, in large amounts? A. We were trying to see if we could trace the funds going in to see if it would hit something that would look like it belongs to the website and we were also trying to trace funds out of the website, too. THE COURT: Mr. Dratel, when you reach a stopping point, we're at 1:00 now. MR. DRATEL: Okay. We can stop now. THE COURT: I apologize, but we're going to take lunch now. I know we just started about 40 minutes ago. We'll come back at 2:00. We're still going to get you out on time today. We're not going to extend the day at all. You'll get out right as we had previously said, 5:00. Page 638 I want to remind you not to talk to each other or anybody else about this case. Thanks very much. See you after lunch. *(Jury excused)* *(Continued on next page)* Page 639 *(In open court; jury not present)* THE COURT: The witness can be excused for lunch, as well. *(Witness temporarily excused)* THE COURT: Ladies and gentlemen, be seated for a moment. I have a matter in this room right now. I just want to raise one thing. You folks may want to raise something and let's do it quickly; otherwise, we'll take it up just before two. What I want to raise is I see the government now is objecting a lot, as is your right to do if you believe the questions are objectionable. It is a difference from how things were being handled before. I think you'll do what you need to do, but if there's anything that people believe they can do in terms of the formulation -- now, that you know, Mr. Dratel the government is going to object -- MR. DRATEL: On every question, yes. THE COURT: In terms of form, you can refrain some of the questions and we can avoid some of that. That was not the way we were proceeding before. There was a little more leeway given to people to speak in sort of regular formed sentences, but I'm not suggesting the government doesn't have a right to object. You do. But we'll just all take into consideration as we figure out how whether it's going to continue to each question because it will take longer so you might want to pick a few. Page 640 MR. DRATEL: The government is free to do what it wants to do. MR. TURNER: I don't want to go down the same road we went before. THE COURT: I understand. I think that there are objections which are objections that you really need to make, and then there are objections where there certainly may be a legal basis for it, but the better part of valor is to stand down. You'll make your decision and what I mean, Mr. Dratel, in terms of the government being free to do what it wants to do is only insofar as anybody can object when you folks believe that you need to do so to preserve the record, and that's an important thing for you folks to do. Everybody needs to do it if you believe it's important, but there are lots of objections that are neither here nor there ultimately. You guys will decide. The rules are no different from the government than they are for the defense. Let's take our lunch break and we'll come back at 2:00. *(Luncheon recess)* *(Continued on next page)* Page 641 AFTERNOON SESSION 2:08 p.m. *(In open court; jury not present)* THE COURT: We are still waiting for one juror. Actually, I have one jury matter and I want to discuss with you folks how to deal with the struck testimony. On the jury matter, there's one juror who has got apparently issues with her place of employment which will not -- their HR policy and whether or not we can overcome this is TBD, we're going to try to overcome this -- indicates that they can have two weeks paid for jury service and then after that it has to come out of her vacation. And that may or may not present certain issues for this juror. So we're trying to determine whether or not her place of employment would see fit to make an exception in that she's already been impanelled on a jury, and it's not going to end within the time frame that she's got. If they say no, then we'll have to determine how we want to approach her about that. In discussions with counsel, the Court will discuss that with counsel, how people propose we should proceed and whether or not, if she is very concerned, whether or not on that basis we do anything about that, including replacing her with one of the alternates. That's to be determined. I just wanted to flag for you that that issue has come up today. Page 642 I have received from the government an email that was copied to counsel, all counsel, that has their proposal as to excerpts to be stricken based upon the Court's prior ruling. Mr. Dratel had mentioned before that the Court had not yet entertained arguments as to waiver, and that is correct, or any other arguments other than rearguing the Court's evidentiary ruling. Also I need to know how soon we're going to have to deal with this when the redirect is likely to begin. Mr. Dratel, let's take the last question first. How much more on cross do you have of Mr. Der-Yeghiayan? MR. DRATEL: With the exception of one question that I'll ask the Court, which is whether I'm going to go at all into the second person, I'm not sure whether I'm allowed to go at all into the second alternative suspect, whether that's something -- THE COURT: The main issue that we had dealt with was with the mises.org piece. MR. DRATEL: Right. THE COURT: If there are other aspects of it that I'm unaware of, we can take it step by step and see. MR. DRATEL: So, between an hour, an hour and-a-half I guess. THE COURT: So probably then, it's likely to be a time for break, but do you want to now preview your waiver argument? I think I understand just with the word "waiver" possibly the contour of what you're getting at, but I'd like to give you a chance to state it for the record. We can do it at the break if you'd rather not do it right now. Page 643 MR. DRATEL: I can do it at the break in a way that -- the waiver is really three parts: One is, they didn't object, and you can't put that genie back this the bottle in any respects. The second is, they're not objectionable in many respects even under the Court's ruling. And the third would be that, you know, it changes the whole nature of how an examination proceeds and that's one of the reasons why you have to object contemporaneously because then you can't go back and reconstruct it in a manner that then undoes things that you could have changed. So all of that is a factor in the waiver argument and the Court said on Thursday that it was out there already, so, you know, -- THE COURT: The fact that Mark Karpeles exists as a potential individual as to whom there is some evidence that people can draw inferences from, that would not be gone from the case. Even with the government's suggestions, there is lots of evidence in terms of questions that you asked that was perfectly appropriate in that regard. MR. DRATEL: Yes. And I think all appropriate in the context of -- not only in the context of alternative suspect, but also in the context of the conduct of the investigation, because at the end of the day, we're going to have a comparison with the investigation of Mr. Ulbricht and the conclusions that were drawn and the investigations of at least two other people and the conclusion that were drawn, and at the end of the day, the only thing that's going to be a factor for the government is something that no one can trust. That's part of the whole defense, and that's part of what these questions are about. Page 644 And it's perfectly appropriate to ask an agent and a law enforcement officer about the conduct of his investigation and how it proceeded and even -- THE COURT: I don't want to reargue the evidence. MR. DRATEL: I know, I'm just saying, the notion that now that there's no waiver when these things come in and is just -- I mean, there has to be some notion of waiver in the context of a trial in the sense of what it means to have a contemporaneous objection and what it means not to have a contemporaneous objection. THE COURT: Mr. Turner. MR. TURNER: Your Honor, the trial has gone fast. You wish you had all the law at your fingertips. I think the Court was inclined to think a lot of the testimony was admissible, which after further review is now clearly inadmissible. It's not too late for the defendant in that we're not past cross. We're still in the middle of cross. If the defense has further inquiry that's admissible that's proper about Mr. Karpeles, the defense can still pursue that, so there's no prejudice to striking the prior testimony. Page 645 And the problem with leaving it in is there's very clear circuit law that if hearsay like that comes in, the curative admissibility doctrine applies and the government can get equivalent hearsay in on redirect. So the government certainly would inquire of Special Agent Der-Yeghiayan in the same fashion that the defense inquired on cross about all the reasons that he now believes the defendant is guilty, and that would certainly be appropriate. And I think that was what your Honor wanted to avoid by striking the testimony that's objectionable that came in on Thursday. THE COURT: So here is what we're going to do -- MR. DRATEL: Just one other thing. THE COURT: Yes. MR. DRATEL: They knew full well what was in the 3500. They cannot -- it cannot be that this was not on the radar for them, then to sit by and let it all come in and then completely eviscerate the defense after the fact is unfair, and that's a waiver. They knew better than anyone what was in the context of my questions and what was in the context of Agent Der-Yeghiayan's answers. THE COURT: Mr. Turner. MR. TURNER: I would say never in a million years would I have imagined that the defense would be trying to allege that Mark Karpeles framed Dread Pirate Roberts. I don't think that was clear from the opening and that was not apparent to the government until the questioning came in that way. So the government I don't think was put on notice by the opening alone. Page 646 THE COURT: My basis for my ruling is not that the government should not have anticipated; that they may well have anticipated it. They should have objected, but they didn't. We are now where we are. We have had an objection that we have now talked about extensively, and I will strike the testimony that is indicated in the government's email to the Court, but not right now. I say that to you folks so that you can plan the remainder of your cross and the government can plan its redirect as appropriate. I do not, however, plan to point the jury to the specific Q and A's that I'm striking, unless you folks make arguments that that's what I should do. My intent, which I intend to do not right now, is to give the jury a general instruction about suspicions and conclusions that the agent reached are struck from the record and then to provide clear indication by line to the court reporter and to everyone here as to what is struck from the record, but I don't think it stands in anyone's interest to have it be put on to the screen in terms of exactly what's struck from the record. That seems to indicate taking away and giving more weight to it all at the same time. So I think it actually has issues where it compounds the problem. Page 647 But we can deal with that, the method, at another time. And when I say another time, it won't be a long time, but in terms of being able to understand what to proceed with right now, people should proceed with that view and to construct the remainder of your cross. If it goes on longer than you were anticipating, Mr. Dratel, as a result, then I understand. MR. DRATEL: I don't know that I'm prepared to do it for this reason: First of all, there are facts here and factual answers and factual questions that the government has included that should not be stricken under any circumstances. THE COURT: I have reviewed them and I do believe that what they indicated they would strike is consistent with my ruling. There are pieces that are around it, and I assume you've got the same shaded portions that I have -- MR. DRATEL: Yes. THE COURT: -- that are not struck and appropriately so, and that would remain in terms of MtGox and Mark Karpeles. I mean, he's not eliminated from the record. And you'll certainly be able to argue whatever inferences you think you can argue. Page 648 MR. DRATEL: But there are other aspects of this that are simply not -- that are factual, such as citizenship, such as the part on page 506 and 507, which is about the conduct of the investigation. It has nothing to do with -- THE COURT: I believe the government has, consistent with my lengthy ruling this morning, cabined the material appropriately. So I'll look at each of the individual Q and A's again, but you should proceed right now as if those pieces are going to be struck from the record. MR. DRATEL: I'm not sure I can proceed on this level because now I have to go back and reconstruct all this material that was unobjected to. I have to go back and look at parts of the cross that were already finished and done and then reconstruct it. I can go on with my cross right now, but then I'd like a break until tomorrow. THE COURT: No. I'm done with this issue. If the government had objected timely at the first Q and A, we wouldn't be having this issue right now because it would have been highlighted on the basis of suspicion, conjecture and belief right then as opposed to going on. MR. DRATEL: And I would have rephrased the question. THE COURT: I'm saying go back and you can rephrase at the questions right now. MR. DRATEL: But I need time to look at this. This is seven or eight different pieces. Page 649 THE COURT: We have been dealing with the possibility that this very information could be struck since Thursday night. MR. DRATEL: No. They didn't identify this until 20 minutes ago. THE COURT: No. It was obvious to me and it should have been obvious to you folks that when we were dealing with an objection about a type of testimony, that one potential result, particularly in light of the government's letter when they made an application to strike, is that certain things would be struck. The only question was what. And therefore, this should not be a big shock in terms of what's being struck. I'm not suggesting that you should like it or agree with it, but it's how we're going to proceed. MR. DRATEL: I want the equivalent so that -- I just want it to be equivalent, that's all, so that they can sit on their hands after providing all the 3500 material knowing exactly where the examination is going, they don't have to do that and now on the fly I have to do this. I don't think that's equivalent, your Honor. I'm sorry. THE COURT: I think we have the way we're going to proceed in mind. Do we have a full jury? THE DEPUTY CLERK: We do. THE COURT: Let's bring out the jury. Let's get Mr. Der-Yeghiayan back in the courtroom. Mr. Der-Yeghiayan, can you folks get him. Page 650 *(Continued on next page)* Page 651 *(In open court; jury present)* THE COURT: When you get to your seat, let's all be seated. Mr. Dratel, you may proceed, sir. MR. DRATEL: Thank you, your Honor. CROSS-EXAMINATION (Continued) MR. DRATEL Q. Good afternoon, Agent Der-Yeghiayan. A. Good afternoon. Q. Going back to Mark Karpeles, he had -- he had an associate named Ashley Barr, correct? MR. TURNER: Objection; foundation. THE COURT: If he knows. A. I believe he had an employee named Ashley Barr. Q. His right-hand man essentially? MR. TURNER: The same objection. A. 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. THE WITNESS: 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? Page 652 THE WITNESS: Okay. Q. So it's based upon your investigation, correct? A. 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. Q. But initially, your investigation established that he was a right-hand man to Mr. Karpeles, right? MR. TURNER: Objection, your Honor. THE COURT: Sustained. Q. 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? THE WITNESS: I don't. THE COURT: All right. I take it you never spoke to this associate? THE WITNESS: I never did, no. THE COURT: All right. Move on. Page 653 Q. Mr. Barr worked for Mr. Karpeles, right? MR. TURNER: Objection; foundation. Q. 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. A. He did work for him. Q. And during the time period that we're talking about, right, 2011, summer of 2012, right? A. Around the time period, yes. Q. And Mr. Barr is a Canadian citizen, correct? A. Yes, he is. Q. 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. A. 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. Page 654 Why don't you build a foundation as to what the source of his knowledge is and then we can proceed. Q. What's the source of your knowledge about Mr. Barr's education? A. It came from an Internet page. Q. Was it his LinkedIn page? MR. TURNER: Objection; hearsay. A. 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? THE WITNESS: I believe it might have been. I don't really recall if there was something that helped me. Q. You looked at his LinkedIn page, right? A. I did, yes. Q. And he was also an expert in Linux, correct? MR. TURNER: Objection. THE COURT: Sustained. MR. TURNER: Hearsay. Q. 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. Page 655 *(Continued on next page)* Page 656 *(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. Page 657 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 -- Page 658 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)* Page 659 *(In open court; jury present)* MR. DRATEL Q. Now, you did research on certain software platforms, correct? A. Can you be more specific? MR. TURNER: Objection; form. THE COURT: He can answer that question. You may answer. A. I'm sorry. Can you -- Q. You did research on certain software platforms, correct? A. In what context? Q. Well, MediaWiki, right, M-E-D-I-A-W-I-K-I, correct? A. I did look into that; yes. Q. And you found that there were similarities between Silk Road market and a forum associated with Mark Karpeles, correct? A. 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? THE WITNESS: I looked at its website from MediaWiki, yes. THE COURT: Did you look at the platform it was built on? THE WITNESS: I didn't really go too deep into the software. Page 660 THE COURT: Whether you went too deep or at a surface level, did you look at it at all? THE WITNESS: 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? THE WITNESS: 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? THE WITNESS: 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? THE WITNESS: It was the same version number, I believe. THE COURT: The same version number? THE WITNESS: Yes. THE COURT: You may proceed. Q. That was 1.17, right? A. I believe that was it; yes. Q. In fact, it wasn't the latest version at the time? It was an older version, correct? Page 661 MR. TURNER: Objection; time frame. THE COURT: Overruled. Q. At the time you were looking in 2012, 2013? A. It was an older version when I did observe it; yes. Q. Right. So both the Karpeles site and silkroadmarket.org were operating on the same MediaWiki version that had since been updated, right? A. That's correct. Q. And based on your research, that platform is not used by a lot of forum administrators, correct? A. 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 -- Q. 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. A. It was something that came from my source that told me that. Q. But you wrote that, did you not? MR. TURNER: Objection. Q. 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? Page 662 THE WITNESS: 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? THE WITNESS: 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? THE WITNESS: That I did not perceive, no. THE COURT: All right, so I think we'll move on. *(Continued on next page)* Page 663 THE COURT: All right. So I think that you can go on. MR. DRATEL Q. Did you swear in an affidavit that "Based on my training and experience, this platform is not widely used by forum administrators?" A. It was something through the course that I learned -- Q. 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? A. That was in my affidavit. Yes, I swore to that. Q. 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? A. It was the bitcoin talk forums and the Silk Road forums both ran on Simple Machines forum software. Q. And that wasn't common either? A. That was one that I wasn't familiar with, no. Q. Now, you investigated Mr. Karpeles' background, correct? A. I did. Q. And his professional background, right? A. I did. Q. And what kind of sources did you use? Page 664 A. 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. Q. 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. Q. -- 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? THE WITNESS: 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? THE WITNESS: 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? Page 665 THE WITNESS: 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? THE WITNESS: 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? MR. DRATEL Q. 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. THE WITNESS: Yes, I did. It was in the same way that I saw the Linux language there. MR. DRATEL Q. By the way, Linux is the operational system for Silk Road, right, in many ways? Page 666 A. I believe that and Ubuntu, which it runs. Q. And PHP? A. PHP is a different website programming language. Q. And the information that you saw also was that Mr. Karpeles had worked professionally in both systems, PHP and Linux, right? A. Based on the résumé that I saw, yes. Q. Now, as part of your investigation you looked into IP addresses associated with Mr. Karpeles, correct? A. That's correct. Q. And you came up with about five pages worth, lists of IP addresses, right? A. That is correct. Q. That's pretty active Internet presence, wouldn't you say? A. That is a lot of IP addresses, yes. Q. And you also found out -- and this is directly from hosting companies, right, you found out; so you verified this, these IP addresses, right? A. Yes. Through subpoenas, yes. Q. Yes. Also you verified, through the subpoenas, that Mr. Karpeles was actively using the support for a software called MYSQL, correct? MR. TURNER: Objection. Q. MySQL. Page 667 MR. TURNER: Objection. Form. THE COURT: I will allow it. A. I believe he was using MySQL yes. Q. Do you need to be sure? A. It's hand in hand with PHP so I'm assuming, yes, he did. THE COURT: Don't assume. A. If you have something I could reference, yes, I will certainly look at it. Q. Sure. *(Pause)* MR. DRATEL: 3505-3767. Q. If you just look at that first paragraph (handing). A. Sure. *(Pause)* OK. Q. And so you got confirmation through the subpoenas that he had a port open for M-y-S-Q-L, MySQL? A. That is correct. Q. That's also something that is used in Silk Road, right? A. I believe so, yes. Q. Silk Road relied on a highly complex system for processing bitcoins, right? MR. TURNER: Objection. Foundation. Q. Based on your investigation? MR. TURNER: The same objection. Page 668 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. A. I'm sorry. Could you repeat, please. Q. Sure. Based on your investigation, Silk Road relied on a highly complex system for processing bitcoins, correct? A. Yes, it did. Q. 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? A. I believe it is the 1API, yes. Q. 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? A. There was not. Q. Now, even after Mr. Ulbricht was arrested, you continued your investigation of Mr. Karpeles, correct? A. I wanted to see if there was any other ties to him, yes. Q. And were there any inferences in the notes on Mr. Ulbricht's computer with respect to Mr. Karpeles' involvement and associations with Silk Road? Page 669 MR. TURNER: Objection. Form. THE COURT: Sustained. Q. Did you review notes from Mr. Ulbricht's computer? A. I did. Q. 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. MR. DRATEL Q. 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. MR. DRATEL Q. When you reviewed Mr. Ulbricht's notes, or what were on -- withdrawn. Page 670 You reviewed what was on Mr. Ulbricht's laptop, correct? A. I did. Q. And part of that was you were looking for things about Mr. Karpeles, correct? A. I was looking for any associations with Mr. Karpeles, yes. Q. Did you find any? A. There was his name mentioned on some text documents, yes. Q. 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? A. 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? THE WITNESS: I do not, no. THE COURT: You can go ahead and continue. MR. DRATEL Q. 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? Page 671 MR. TURNER: Objection. It calls for speculation. THE COURT: Sustained. Q. If it had been hacked. THE COURT: No. He is not an expert witness to talk about the evidence of hacking. Q. You never saw Mr. Karpeles' laptop, correct? A. No, I've never seen his laptop or computers. Q. Mr. Karpeles also controls a lot of websites, correct? A. He was a hosting provider, yes. Q. 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)* 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. Q. 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? Page 672 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. Q. 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? A. The websites that I listed in my report, I did say do not visit those websites. I said that, yes. Q. And the reason was because you wanted to keep the investigation confidential, right? A. It's what we do in investigations, yes. Q. 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? A. That is why, yes. Q. 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. Page 673 A. I am. Q. And he is a Canadian? A. He is a Canadian citizen, yes. Q. 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. Q. Did you find out that he lived in Vancouver during that period of time? MR. TURNER: Objection. Foundation. Q. 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? THE WITNESS: I did. THE COURT: What kinds of information did you look at? Did you look at a passport? THE WITNESS: I believe it is from travel records. THE COURT: And travel records from Homeland Security or the Canadian counterpart? THE WITNESS: 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? Page 674 THE WITNESS: 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? THE WITNESS: They do. THE COURT: All right. And what did that indicate to you for this individual? THE WITNESS: 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? THE WITNESS: 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. MR. DRATEL Q. Now, you also did an investigation in terms of his Internet presence, correct? A. I did. Page 675 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. Q. And the list of domain names that he owned was four pages long, right? A. I believe so, yes. Q. And the list of his current known IP addresses was a half page, right? A. From what I got back from the subpoenas, yes. Q. 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? Q. 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? A. 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? Page 676 THE WITNESS: 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? THE WITNESS: 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 WITNESS: Yes. THE COURT: And you didn't separately verify that, is that right? THE WITNESS: 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 WITNESS: Yes. 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. Page 677 MR. DRATEL Q. And this, again, was in the latter part of 2012, correct, like November 2012? A. Correct. Q. And, by the way, Vancouver is in the Pacific Time Zone, right? A. Yes, it is. Q. 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. A. Looking for his name on the servers? Q. Have you seen any entries in the universe of Silk Road on the servers that has his name? A. If there is something to help me recollect my memory? Q. 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. Page 678 MR. DRATEL Q. 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)* 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. Q. 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. Page 679 MR. DRATEL Q. Have you seen that before? A. Not that I recall, no. Q. 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? A. I wasn't included on that, that I recall. Q. How about Google? You are aware of it, right? A. I am aware of Google, yes. Q. PayPal you are aware of, right? A. I believe there was multiple subpoenas issued. A lot of them was done through FBI and not through me. Q. 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? A. I reviewed Mr. Ulbricht's travel records, yes. Q. And basically one trip per year, right? A. I believe that is accurate, yes. Q. One was to Costa Rica, correct? A. I believe so, yes. Q. And did you learn during the course of your investigation that his parents have a business in Costa Rica? MR. TURNER: Objection. Foundation. Page 680 THE COURT: Well, I will allow it. I mean, did you ever receive information indicating that one way or the other? THE WITNESS: 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? THE WITNESS: No, I did not. THE COURT: All right. So you heard or saw information from the Internet which is not separately confirmed? THE WITNESS: 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. MR. DRATEL Q. You got his Mt. Gox account records, right? A. Yes. The Mt. Gox records were also I believe through subpoena. Q. Weren't you given the account number by Karpeles' attorney? A. I was not -- MR. TURNER: Objection. Q. 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. Page 681 THE WITNESS: 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? THE WITNESS: 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. Q. So you were told that by an assistant United States attorney? MR. TURNER: Objection. Hearsay. THE COURT: Sustained. Q. And Karpeles was still under investigation at the time, correct? THE COURT: Can we get the timeframe. Q. October 12, 2013, eleven days after Mr. Ulbricht's arrest, right? A. We were still looking at him for money service business service charges, yes. Q. Now, going back to Mr. Karpeles, you never saw his laptop, right? Page 682 A. No, I have not. Q. You never saw his desk-top or any computer belonging to him, correct? A. I have not. Q. You never saw his phone, his smart phone or any other phone, right? A. No, I have not. Q. You never had access to any of the servers that he maintains overseas, right? A. I have not. Q. With respect to Mr. Athavale, the same thing, right? You never saw his laptop? A. No, I did not. Q. His phone? A. No, I have not. Q. Any electronic device that he owns? A. Nothing belonging to him, no. Q. You have heard of someone named Richard Bates, correct? A. The name is familiar, yes. Q. Well, he is someone whose name came up just prior to Mr. Ulbricht's arrest, correct? MR. TURNER: Objection. Form. Foundation. Q. You learned of his name just prior to Mr. Ulbricht's arrest, correct? Page 683 THE COURT: I will allow that. A. I'm sorry. I am having a hard time refreshing my recollection. Do you have something that can help me recollect my memory? Q. 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. Q. Just look at it right here. A. Sure. *(Pause)* OK. Q. 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. A. This was something that was brought to my attention by Special Agent Gary Alford. It wasn't actually part of my investigation. Q. It was basically about Bates' profile, right? MR. TURNER: The same objection. Hearsay. THE COURT: I will allow it. Page 684 A. There was discussions that he had where he brought up a possible lead in connections to Bates. Q. Right. He had certain things in common not only with Mr. Ulbricht but also with DPR? MR. TURNER: Objection. Again, hearsay. THE COURT: Sustained. Q. Some of the things were about his political views, right? MR. TURNER: Objection. THE COURT: Sustained. *(Pause)* Q. Did you look into Mr. Bates at all? A. No, I did not. Q. 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? A. Yes. Q. 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? A. Yes. Q. 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? Page 685 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. Q. 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? THE WITNESS: 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? THE WITNESS: 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? Page 686 THE WITNESS: 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. Q. 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. Q. So in that account that you were monitoring, July 10, 2012, the account had 503,825 bitcoins in it, right? A. That sounds about correct, yes. Q. And the value of a bitcoin at that time was $7.10, correct? A. Sounds about accurate, yes. Q. So that would be about $3-and-a-half million in bitcoins? 5 times 7, add the zero -- A. Carry. Yes. Q. I mean, you did the math at one point, right? A. I had a calculator, right, yes. Q. 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? Page 687 A. 144,000 bitcoins, yes. Q. 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? A. That is correct. Q. 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? A. They did. Q. And those would be reflected in bitcoins, right? A. It would. Q. And also not $7 per bitcoin but by October 1st of 2013, bitcoin was at $100 per bitcoin, right? A. That is correct. Q. So that's fourteen times, right, the value? A. Yes. Q. 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? A. That sounds about right, yes. Q. 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? Page 688 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. Q. Bitcoin, during the period that we were talking about before, October 1st, 2013, bitcoin peaked in the spring of 2013, correct? A. Yeah, around April it did. Q. To 250? A. Yes. Q. $250 per bitcoin? A. $250 a bitcoin. Q. So that would make that 50 million one-and-a-half times more, right? A. Yes. Q. 125 million? A. If it -- yeah, if the volume stayed the same in bitcoins in the accounts, yes. Q. 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. Page 689 Q. 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? THE WITNESS: 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? THE WITNESS: 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. MR. DRATEL Q. 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. Page 690 Do you have any independent sources of information where you learned the volume of sales, either approximately or concretely, that occurred on Silk Road? THE WITNESS: Other than what was shared with me from them, no. THE COURT: All right. And that's hearsay. So -- MR. DRATEL Q. Did you ever read the complaint in this case? THE COURT: That is hearsay, too, so it is not admissible evidence. Q. 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? A. Sounds about accurate. Q. And, again, back in 2012, bitcoin hadn't nearly even approached that $100 per bitcoin, right? A. No. It was under $10, I believe. Q. 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? A. 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. Page 691 Q. Now, that $144,000 -- I'm sorry, the 144,000 bitcoins that were seized from Mr. Ulbricht's laptop, right? A. Yes. Q. They were worth $29 million at the time of seizure, right? A. Yes. Q. And by November 18, 2013 -- withdrawn. The price of bitcoins skyrocketed, as we talked about Thursday, right, after the arrest? MR. TURNER: Objection. Timeframe. Q. 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? A. It went over a thousand dollars, yes. Q. And as of November 18, 2013, that $29 million worth of bitcoin would have been worth $96.5 million, right? A. Yes. Q. So anybody holding bitcoins during that period of six/seven weeks would have seen a 500 percent return, right? A. That's accurate, yes. Q. There was a significant amount of law enforcement activity devoted to investigating Silk Road, right? A. Yes, there was. Page 692 Q. Multiple agencies? A. There were multiple agencies involved, yes. Q. Multiple United States Attorney's offices? A. Multiple United States Attorney's offices. Q. Multiple offices even with within your agency, Chicago, Baltimore, other places, right, New York? A. That is correct. Q. 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? A. Yes, I did. Q. Most of them buyer accounts? A. I mean, it was split up, buyer/vendor accounts, yes. Q. So -- and you alone had more than a dozen, maybe even two dozen, that you could sign on to, right? A. 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. Q. 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? A. That is correct. Page 693 Q. So that increases that number, doesn't it? A. It does, yes. THE COURT: So how many of those, approximately, did you have? You got the six that you created yourself? THE WITNESS: 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? THE WITNESS: Approximately about a dozen. THE COURT: All right. So you touched personally about 18 accounts? THE WITNESS: That sound about right, yes. THE COURT: All right. MR. DRATEL Q. And you also told us, I think Thursday, that some of these accounts other agents had access to as well? A. Some of them, yes, other agents I gave the username and password to. Q. So you might be on one day and another agent might be on another day, right? A. Not if it was being utilized in an undercover capacity. It would only be one agent utilizing it. Q. 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? Page 694 A. Oh, a few of them were used in that capacity, yes. Q. So you made about 50 such purchases, right? A. That was from one account, yes. Q. And the purpose of those purchases was not to keep the site going, right? A. No, it wasn't to keep the site going. Q. But at the same time you are sending money overseas -- bitcoins overseas to drug dealers, who were pocketing that money, right? A. It's going into, yes, their hands. Q. 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? A. 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. Q. 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? A. We were doing that for the purpose of trying to arrest them. Q. Right. But isn't that one of the reasons why the undercover buys stopped? A. 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. Page 695 Q. And in those purchases that were made through the undercover accounts, you were also paying a commission to Silk Road, right? A. That was something that was automatically taken out, yes. Q. And you don't know whether that has ever been recovered, right? A. I don't know if the exact bitcoins that we put in got recovered or not, no. Q. Now, the government -- withdrawn. You had administrative privileges in July of 2013 as Cirrus, right? A. On the forum I did, yes. Q. And the government, the U.S. government, got access to the Silk Road servers no later than July 23, 2013, right? A. The FBI did. Q. And the FBI could have pulled the plug right then because they had the servers, right? A. I don't know what their capabilities were at the time. Q. Well, they had the servers, correct? They physically had possession of the servers, if they wanted, correct? MR. TURNER: Objection. Foundation. Page 696 THE COURT: Why don't you dig in a little more to what the FBI had and what this witness knows. Q. As of July 2013, the FBI knew the location of Silk Road's servers, right? A. They had an image that came back as a server. Q. 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. Q. You know where the location was, right? A. They had an up IP address for where they got the image that did come back as being Silk Road's server. Q. But what I'm saying is you know where the servers were located, right? MR. TURNER: Objection. Foundation. Q. You know that -- MR. TURNER: Objection. THE COURT: Sustained. Q. -- from the investigation of the information that has been verified, right? MR. TURNER: Objection. THE COURT: Sustained. You need to ask it differently. Page 697 Q. 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. A. 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? THE WITNESS: I did not. THE COURT: All right. MR. DRATEL Q. 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. MR. DRATEL Q. 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? Page 698 THE WITNESS: No, I did not. THE COURT: Did you receive written documentation that related to the imaging of the servers? THE WITNESS: 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: Q. 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? A. 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? THE WITNESS: 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? Page 699 THE WITNESS: Subsequent captures I might have, yes. THE COURT: And the word "capture" there refers to the imaging of a server, is that right? THE WITNESS: Right, the actual imaging. THE COURT: All right. MR. DRATEL Q. 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. Q. 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? A. There would be a time that -- Q. 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? A. I did. Q. 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? A. There wouldn't be administrative action on the site, yes. Page 700 Q. That was because you wanted it to be done in a way that nobody could notice, right, if possible? A. 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. THE CLERK: All rise as the jury exits. *(Continued on next page)* Page 701 *(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 Scott, 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. Page 702 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. Page 703 *(Continued on next page)* Page 704 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. Page 705 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 -- Page 706 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 or 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 -- Page 707 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. Page 708 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 -- Page 709 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. Page 710 *(Jury present)* Mr. Dratel, you may proceed, sir. MR. DRATEL: Thank you. MR. DRATEL Q. 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? A. Yes. Q. 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. Q. Well, the FBI had the IP address for the Silk Road server, correct? MR. TURNER: Objection; foundation. THE COURT: Sustained. Q. Have you seen documents from the FBI with respect to its knowledge either before -- MR. TURNER: Objection. Q. -- either before or since with respect to -- Page 711 THE COURT: I'll allow this. MR. TURNER: Objection; hearsay. A. 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 WITNESS: Of? THE COURT: A server that allegedly had the Silk Road site resident on it? THE WITNESS: Not that I recall, but I know they had an IP address. THE COURT: Okay. All right. Q. 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"? A. 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. Q. You didn't mean take down as in stop the servers from continuing to be used to sell drugs around the world? A. No. I believe they were taking it down to image them to take a capture of it. Q. But not to stop the site? A. Not to stop it, no. Q. In fact the site went on for the rest of July, August and September, right? Page 712 A. It did. Q. All the while, the FBI had the image of the servers and the IP address for the servers, right? A. They did. Q. 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? A. 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. Q. 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. Q. Were you comfortable with having all this information and the site continuing to run unimpeded? A. It's not a call for me to make. It's something that it's for the U.S. Attorney's Office to make. Q. 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. Page 713 Q. 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. Q. 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. A. 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. Q. What does that mean, "properly"? A. 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. Page 714 Q. In fact, Silk Road 2.0 was up and running by early November of 2013, right? A. Silk Road -- there was a Silk Road 2.0; yes. Q. And virtually identical service as Silk Road that was operated on those other servers, right? A. It was very similar to Silk Road 1, yes. Q. Now, with respect to closing the site down, there was discussion among law enforcement about doing it as early as May or June, right? A. If there's a document you're referring to to help me recollect. Q. 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. A. Okay. Q. 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? Page 715 A. That was a rumor that I heard from another HSI office. Q. 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? A. We were making progress at that point, yes. Q. Getting close? A. Getting close. Q. Now, when Silk Road 2.0 obviously was back up in early November, that was after Mr. Ulbricht's arrest, right? A. It was. Q. 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? A. It was. Q. And internationally, too, right? A. Yes. Q. 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. Q. Weren't different agencies -- withdrawn. HSI was pursuing it in Chicago, right? A. Yes, we were suing Silk Road in Chicago. Q. And also HSI Baltimore was pursuing it, right? A. There was also an investigation of Silk Road within HSI Baltimore. Page 716 Q. And the Secret Service was involved in that, right? A. There was a task force, yes. Q. And HSI Baltimore and HSI Chicago didn't always see eye to eye, correct? MR. TURNER: Same objection. THE COURT: Overruled. A. Can -- there was differences, but I mean, it was both going after similar targets at the same time. Q. Right. But there were differences in how to do it and differences on who would get credit for it, right? A. 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. Q. 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? A. 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. Q. In fact, Chicago and Baltimore even had a meeting to try to resolve differences, correct? Page 717 MR. TURNER: Objection; relevance. THE COURT: Sustained. Q. 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. Q. There was a meeting between Chicago and Baltimore about the direction of the investigation and splitting responsibility responsibilities, right? A. Can you be more specific on a time frame? Q. Sure. February 2012, February 1, 2012? A. That was -- the initial meeting that we had I believe with or around about the time -- February, you said 2012? Q. Yes, uh-huh. A. I believe that might have been a coordination meeting among multiple agencies. Q. 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. Page 718 THE COURT: You may proceed. Q. So Baltimore said in February of 2012 that it was going to shut down Silk Road soon? A. They -- I believe they said something similar, that they believed they could shut it down quickly. Q. 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. Q. 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? A. 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. Q. And that was going on through 2012, correct? A. There were concerns from time to time about things of that nature, yes. Page 719 Q. 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. Q. You were frustrated a fair amount of the time by these problems, right? MR. TURNER: Objection; relevance. THE COURT: Sustained. Q. 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? A. Is there a particular time frame? Q. Yes. August of 2012? A. 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. Page 720 Q. 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. A. Is this the New York OCDETF group you're talking about or just -- Q. 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. A. 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. Page 721 Q. The problem was that an agent in New York was including your seizures on their intel report, correct? A. 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. Q. And you thought that putting -- and doing that, you thought could potentially jeopardize over a year's worth of investigation evidence, right? A. 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. Q. 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? A. If there's a particular email that you can help me recollect my memory. Q. Sure, 319. 3505-319. A. Thank you. THE COURT: So what's the question? MR. DRATEL: I didn't know if he was finished reading it already. A. Okay. Page 722 Q. 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? A. 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. Q. 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? MR. DRATEL: 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)* Page 723 *(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. Page 724 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)* Page 725 *(In open court; jury present)* MR. DRATEL Q. 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. Q. Now, you spent thousands of hours on Silk Road you said, right? A. I did. Q. As a supposed buyer, right: In other words, utilizing buyer accounts, utilizing seller accounts? A. I did. Q. As an administrator? A. I did. Q. And the first time you heard Ross Ulbricht's name was either September 10 or September 11 of 2013, right? A. Around that time frame. Q. You had been investigating the site for two years, right? A. Yes. Q. 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? A. Some of them do, but I mean, if there were accounts taken over regularly, even in 2013. Page 726 Q. Now, there were other federal agencies investigating as we talked about, right? A. There were other agencies investigating; yes. Q. And in the manner we discussed, they shared their work product with you, right? A. A lot of them did; yes. Q. And do you know about state and local enforcement? Do you know how many accounts they had running on Silk Road? A. I have no way of knowing. Q. Do you know how many other federal agencies, how many accounts they were running on Silk Road? A. We had a method to try and deconflict that through a headquarters component. Q. What was the total amount of accounts that the federal law enforcement community was running on Silk Road, U.S. federal? A. 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. Q. So you don't know how many? A. I don't know how many; no. Q. 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? A. I do not know. Page 727 Q. You used other facets of your investigation, too, right, right? MR. TURNER: Objection; form. Q. 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. Q. You had a lot of methods in your investigation, right? A. Used as many investigative methods as possible. Q. And as many sources as possible, right? A. As many sources as we could; yes. Q. So that's subpoenas and search warrants, right? A. We used subpoenas and search warrants, yes. Q. Confidential informants? A. And confidential informants. Q. What's a Tecs, T-E-C-S? What's a TECS? A. It's the name of the program, not the program, the system that Customs and Immigration uses for their databases. Q. Did you use that as well? A. Yes, I did. Q. And you also had help from people who had expertise in computers and bitcoins and Tor help you as well, right? A. We had confidential informants and other people that we would talk to from time to time. Q. And when you gained access to these accounts, one of the purposes was to try to find the identity of DPR, right? Page 728 A. If possible, yeah; that was one of the main priorities. Q. And you had substantial contact with DPR, right? A. After acquiring the cirrus account, yes. Q. 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. Q. Forum posts, you had access to that, correct? A. To the ones that were available to my account, yes. Q. And also once you got on the site in 2012, you had access to the forums, right? A. Yes, but there was a limited access depending upon your user role as to how much you could see under that user role. Q. Okay. And then did you increase that user role over time? A. I did. Q. And finally you were administrator, right? A. That's correct. Q. During all of that time until September 10, Mr. Ulbricht never appeared on your radar? A. He did not. Q. Until a digital trail presented him to you on a silver platter, right? Page 729 A. Until Special Agent Gary Alford brought it to my attention, Mr. Ulbricht was not part of my investigation. Q. 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. Q. 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? A. Yes, for the money seizure, yes. Q. And Ross Ulbricht comes on your radar three and-a-half months later, right, maybe four months? A. In September of 2013. Q. May, June, July, August. Nothing further. Thank you? THE COURT: All right. Thank you. Mr. Turner. MR. TURNER: Thank you, your Honor. REDIRECT EXAMINATION MR. TURNER Page 730 Q. Good afternoon, Special Agent Der-Yeghiayan. A. Good afternoon. Q. Good to talk to you again. On cross, you were asked about the difficulty of figuring out who was on the other side of the screen when you were talking to DPR, Dread Pirate Roberts? A. Yes, I was. Q. And am I right that every conversation you had with him was on Tor? A. Every conversation I had with him was on Tor, yes. Q. And he was security conscious, right? A. He was security conscious, yes. Q. Did he reveal many personal details about himself in the conversations he had with you? A. No. Nothing personal. Q. So it was hard for you to figure out who DPR was just from your own line of communications with him, is that right? A. It was difficult to try to identify who the real person was, yes. Q. So what was the whole purpose of arranging the arrest the way that you did it? MR. DRATEL: Objection. THE COURT: Sustained. Q. You testified on direct that you would be -- the plan for the arrest was what? A. The plan for the arrest was to try to get Mr. Ulbricht in a public setting and then to initiate a chat with Dread Pirate Roberts for the purposes of seeing if -- Page 731 MR. DRATEL: Objection. THE COURT: I will allow it. You may continue. THE WITNESS: For the purposes of seeing if the chat would match between the person we were arresting and Dread Pirate Roberts. Q. To see who was on the other side of the screen that day? MR. DRATEL: Objection. THE COURT: I'll allow it. You may answer. A. Yes. Q. And when you saw the defendant go into the library that day, you were monitoring DPR online, right? A. Yes, I was. Q. And when he walked in was DPR online or offline? A. When he walked in, he was offline. Q. And after he went in, what happened to DPR's online status? A. He went online. MR. DRATEL: Objection as to form. THE COURT: Overruled. Q. Did you start chatting with DPR after he went online? MR. DRATEL: Objection to form. THE COURT: I'll allow it. Page 732 A. Yes, I did. Q. And what happened to the chat once the defendant was arrested? MR. DRATEL: I'm going to object based on the chat because it's unclear what kind of chat. This whole thing about online is a specific medium that they were communicating through, not anything precise. THE COURT: Ladies and gentlemen, the chat that's been referred to so far has not been oral communications, it's been the written chat. MR. DRATEL: That's not what I mean. THE COURT: I'm going to -- why don't you, Mr. Turner, why don't you back up and talk about the type of chat and I will allow it. MR. TURNER: Sure. The jury heard about this chat before. Can we put up Government Exhibit 129C back on the screen. Zoom in on the text please up at the top. Could you zoom in on the text, Mr. Evert. There you go. Q. Now do you know what chat I'm talking about? MR. DRATEL: That's not the issue. The issue is the medium. THE COURT: I will allow it. MR. DRATEL: It's not -- THE COURT: I'll allow it. We've been through this on direct. It's more of the same. Page 733 You may proceed, Mr. Turner. MR. TURNER: Mr. Evert, can you please zoom in to the right side of the screen. Zoom in fully. Perfect. Thanks. Q. Okay. So do you remember this chat, Agent Der-Yeghiayan? THE COURT: This is GX 129C? MR. TURNER: Yes. A. Yes, I do. Q. What happened in the chat after the defendant was arrested? A. There was no response from dread. Q. And when you went up to the library to look at the defendant's computer, what did you see on the screen? A. I saw an identical chat that I just had with Dread Pirate Roberts. Q. Who was on the other side of the screen that day? A. Ross Ulbricht. Q. Now, let's take a look at this chat -- by the time you had this chat, you had been working for DPR for how long? A. Since late July 2013. Q. Over two months, right? A. Yes. Q. You had had numerous chats with him up to this point before, right? A. I had. Q. Could just anybody strike up a chat with DPR on this system? Page 734 A. No, they could not. Q. What did you have to have? A. You had to have log-in credentials that are provided by Dread Pirate Roberts. Q. And how did he provide those to you? A. It was provided to the original operator through a private message. Q. And it was a private message on the Silk Road forum, right? A. Yes, it was. Q. And would DPR ever contact you on the Silk Road forum? A. He would send private messages to me, yes. Q. Would he sometimes tell you to get on chat? A. Yes, he would. Q. And then after he told you that on the Silk Road forum, what would happen on the chat window? A. Then he would initiate a chat with me on the staff chat. *(Continued on next page)* Page 735 Q. So the connection between the DPR on the Silk Road and the DPR on the chat was seamless, is that right? MR. DRATEL: Objection. THE COURT: Sustained. Why don't you rephrase that. MR. TURNER: Sure. Q. What credentials did you have to have to log into your chat account in the staff chat system? A. I had to have a unique username, which wasn't really a username. It was a string of characters and numbers, and a password. Again, that was provided to me. Q. So what did DPR have to have in order to log into his side of the chat? MR. DRATEL: Objection. Q. What did any user of this sort of system have to have in order to log into the chat? A. They had to have a username and a password, I'm assuming. Q. Was there ever a time when you were chatting with DPR where someone seemed to take over your account and start sending messages to DPR that you had no control over? A. Can you repeat that. Q. Was there ever a time when you were chatting with DPR and someone seemed to take over your account and send messages to DPR that you had no control over? A. No. Page 736 Q. It never happened. So on the date of the defendant's arrest, when you started up this chat with DPR -- if you go back to the chat, please. You can leave it up on the screen. Could you actually back out a little bit more. Right here. You start off the chat, you said, "Hi." And DPR said back, "Hey." Right? MR. DRATEL: Objection. Q. Is that how the chat went? A. Yes. Q. He didn't ask why are you appearing on my screen? MR. DRATEL: Objection. THE COURT: Sustained. Q. He didn't say who are you? MR. DRATEL: Objection. THE COURT: Sustained. Why don't you just ask him what the communication consisted of. Q. When you say "check out," "can you check out one of the flagged messages for me," you were referring back to a prior conversation you had had with him earlier, is that right? A. Yes, I was. Q. What conversation was that? A. There was multiple chats that I had with him ever since he provided me access to that administrator page and to the flagged message section of the marketplace. Page 737 Q. When did he first show you the flagged messages page? A. I would have to go back on the exhibit. Q. Was it days before or weeks before or even longer before? A. It was weeks before. Q. So weeks before you had this chat he had shown you the flagged messages screen? A. Yes. Q. And when you brought it up here, he didn't say what flagged messages screen are you talking about? MR. DRATEL: Objection. THE COURT: Sustained. Q. He said, "Sure, let me login." What did he have to log into in order to get to the flagged messages screen? A. In order to access that page, you would have to have administrator rights. So you would have to have an account that would have access to that support page. Q. Then later he asked you, unprompted, "You did bitcoin exchange before you started working for me, right?" Now, the person you took over the Scout account from, the Cirrus account from, what kind of business was she involved in? MR. DRATEL: Objection. Foundation. Q. If you know? Page 738 MR. DRATEL: Foundation. THE COURT: Why don't you try to build up a foundation for it, first. Q. Do you know what sort of business the person who took over the Scout account or -- MR. DRATEL: Objection. Foundation. THE COURT: No. Let me just hear the question first and then I will decide if I will let him answer. Q. Do you know what sort of business the person who was engaged -- excuse me. Do you know what sort of business the person who you took over this Cirrus account was engaged in? MR. DRATEL: Objection. Foundation. THE COURT: Can you answer that "yes" or "no"? THE WITNESS: Yes, I do. THE COURT: All right. How did you obtain that information? THE WITNESS: There was -- THE COURT: Just tell me generally the source of information that you used. THE WITNESS: Clear. It is a choice point. So it is a government operated account that we have that gives business data based upon like Social Security number, things of that linked to a person, so it will tell if they have a business registered to him. Page 739 THE COURT: All right. I will allow the question. MR. DRATEL: I am still going to object on foundation. THE COURT: I hear you. MR. TURNER Q. What sort of business was that person involved in? A. They had a bitcoin business. Q. Had you ever mentioned to DPR on your Cirrus account that you were involved in a bitcoin exchange business? A. Not that I recall. Q. You never represented that in your undercover capacity? A. No, I did not. Q. So if DPR knew this from Cirrus, he would have heard it before you took over the account -- MR. DRATEL: Objection. Q. -- is that right? THE COURT: Sustained. Q. When did you take over the Cirrus account? A. Late July of 2013. Q. So that would have been information conveyed to DPR more than two months before this conversation, is that right? MR. DRATEL: Objection. THE COURT: You can ask it differently but he can't answer that question. Sustained. MR. TURNER Q. After you saw the chat on the defendant's computer, you eventually took part in the search of the defendant's residence, is that right? Page 740 A. I did. Q. And you testified about the handwritten notes you recovered from Mr. Ulbricht's bedroom, is that right? A. Yes, I did. Q. And during cross-examination, the defense asked you something like would someone running Silk Road be so careless to leave notes like that in the trash; do you remember that? A. I do recall that, yes. MR. TURNER: Can you put the notes back up, by the way, Government Exhibit 130. Q. Do these notes say Silk Road on them anywhere? A. No, they do not. Q. Do they say illegal drugs on them anywhere? A. No, they do not. Q. How were you able to recognize what these notes were about? A. From my account that I was operating on Silk Road and being active in the Silk Road forums, it was something that stood out to me. Q. If a random person picks these notes -- MR. DRATEL: Objection. Q. -- out of a trash bin, would they have any idea that they concerned Silk Road? MR. DRATEL: Objection. Page 741 THE COURT: Sustained. Q. By the way, you said earlier that you identified Ross Ulbricht's bedroom in the residence by the personal effects that were inside the bedroom, right? A. I did. Q. Passport, credit cards, that sort of thing? A. Yes. Q. Did you recover the personal effects of anyone else in that bedroom? A. There was another alias, I believe, on one of the documents. Q. Beside "alias" documents, did there appeared to be anyone else who lived in that bedroom with him? MR. DRATEL: Objection. THE COURT: I will allow it. A. No. Q. By the way, you were asked on cross about travel records that you reviewed for Mr. Ulbricht? A. Yes, I was. Q. And I think you testified you saw maybe one trip or two trips a year, something like that? A. I believe that was what I recall, yes. Q. The travel records you have access to from HSI, do you have access to records for trips anywhere around the world that Mr. Ulbricht took? Page 742 A. Only trips that have an international nexus, so a connection. So it has to be somewhere outside the country or coming from outside into the country. Q. To or from the United States, right? A. Yes. Q. If he flies from one foreign country to the other, you don't see that in your records? A. I do not see that, no. Q. You were asked on cross about someone named Mark Karpeles repeatedly, right? A. I was. Q. And one of the questions you were asked concerned software called MediaWiki, do you remember that? A. I do. Q. You testified that there was a website you thought was associated with Mark Karpeles -- MR. DRATEL: Objection. Q. -- that used MediaWiki software? THE COURT: Hold on. Let me just read this. Hold on. *(Pause)* THE COURT: I will allow it. Q. Right? A. Yes. Q. And what is MediaWiki software? A. It's an open source. It is a free program that you could download from the Internet. Page 743 Q. What is it used for? A. It's used to create Wiki pages. Q. FAQ pages, right? MR. DRATEL: Objection to leading. THE COURT: Sustained. Why don't you ask it differently. Q. What do you mean, Wiki pages? A. So information pages, so it could be used to provide information. Q. It is a tool for building pages -- MR. DRATEL: Objection. Leading. Q. -- on websites? THE COURT: I will allow it, just to sort of cut through this. A. Yes, it is. Q. Go ahead. A. Yes. Q. And when you say "freely available," what do you mean? A. That means that anyone on the Internet can download it. Q. Anyone on the Internet can download it for free, right? A. Yes, without paying for it. Q. Just like are there browser software programs that you can download from the Internet for free? A. Yes, there are. Page 744 Q. And sometimes those programs change from time to time, right? A. Yes. There is different versions, updated versions. Q. So some people can download one version and then it can change and some people can download the next version? MR. DRATEL: Objection. THE COURT: I will allow it. A. Yes. Q. So you noticed that the same MediaWiki software was running on -- was used to create Silk Road's FAQ page, is that right? A. Yes. The same version of MediaWiki was used on the Silk Road -- Q. Do you have any idea how many thousands or tens of thousands websites -- MR. DRATEL: Objection. Q. -- had FAQ pages still using the same -- MR. DRATEL: Objection to the form. THE COURT: I will allow it. A. I do not know. Q. I think you testified about Simple Machines software? A. I did. Q. And what is that software used for? A. It is to create online forums. Q. Like a discussion forum, right? A. Yes. Page 745 Q. Is that freely available software? A. Yes, it is. Q. Can anybody download it? A. Anyone can download it for free. Q. And use it to create a forum on whatever website they want? A. Yes. Q. You testified about PHP and MySQL, is that right? A. Yes. Q. What are those programs used for? A. It's just a free program that you could download that is a language that helps you build and create websites. Q. Do you have any idea how many thousands or millions of websites use PHP or MySQL? MR. DRATEL: Objection to form. THE COURT: Why don't you ask a different -- Q. Do you have any idea how many websites in the world use PHP or MySQL? A. I don't but I know it is popular. Q. You testified on cross that there was a time when you were looking at whether Mark Karpeles might be involved in operating Silk Road, correct? A. Yes. Q. And in terms of what initially led you to look at Mark Karpeles, you testified it was something about the silkroadmarket.org website, is that right? Page 746 A. Yes. Q. Remind the jury, what is the silkroadmarket.org website? A. It was a website that was on the regular Internet that if you were to search Silk Road on a regular Internet browser, you would potentially find this website first, since it wasn't on Tor, and it would redirect you, give you directions step-by-step on how to access the Silk Road marketplace on Tor. MR. TURNER: Your Honor, may I approach? THE COURT: You may. Q. I'm showing you what's been marked as Government Exhibit 149. A. OK. Q. Do you recognize this exhibit? A. I do. Q. What is it? A. It's a screenshot from archive.org of a Silk Road market page. Q. Silkroadmarket.org? A. Silkroadmarket.org page -- MR. TURNER: The government offers Exhibit 149 into evidence. MR. DRATEL: Objection. Vayner. THE COURT: You need to lay a foundation for this witness for this document. MR. TURNER: Your Honor, we have -- if I can, I will authenticate it under 902 with a declaration from archive.org, and we won't have to have a sidebar. We have already discussed archive.org, and it came through the cross as a tool that can archive reliably websites over time. Page 747 THE COURT: I need to take a look at that testimony to remind myself of that. I am going to allow the document for the moment, subject to connection. MR. TURNER: Thank you. THE COURT: And then, ladies and gentlemen, I will let you know if there is a issue and we need to strike it. But you can proceed. *(Government's Exhibit 149 received in evidence)* MR. TURNER: So could we publish Government Exhibit 149? THE COURT: You may. MR. TURNER: Thank you. Can you zoom in? Q. All right. So was this all there was to the website? A. This was all there was. Q. And it just told you how to get to the actual Silk Road website on Tor, right? A. Yes. Q. It wasn't the actual Silk Road website at all? A. No, it was not. Q. It wasn't on Tor? Page 748 A. It was not on Tor. Q. It was just on the ordinary Internet? A. It was a regular website, yes. Q. And because it was on the ordinary Internet, you were able to look up its true IP address on who.is like you told us about before, right? A. Yes. MR. TURNER: May I approach again, your Honor? THE COURT: You may. Q. I show you what's been marked as Government Exhibit 150. A. OK. Q. Do you recognize this Web page? A. Yes, I do. Q. Where is it from? A. It's who.is -- a screenshot of who.is searching silkroadmarket.org. MR. TURNER: The government offers Government Exhibit 150 into evidence under 803(17). MR. DRATEL: Objection, your Honor, Vayner. THE COURT: All right. I need to take a look at it. *(Pause)* I will allow it. Government Exhibit 150 is received. *(Government's Exhibit 150 received in evidence)* MR. TURNER: Can you publish Government Exhibit 150, Mr. Evert? Could you zoom in here. Zoom in just on that half, please. Page 749 Q. OK. So you looked up silkroadmarket.org on who.is, right? A. Yes. Q. And you found it was controlled -- it was on a server that was going to -- MR. DRATEL: Objection. MR. TURNER: Your Honor, I'm trying to get done before 5. THE COURT: Even though you are trying to get done, we may have to have him back anyway, so take your time. MR. TURNER: OK. Q. So where did you find the IP address resolve back to? A. It came back to a server that was under XTA, an XTA server. Q. You testified on cross that you found that xta.net was registered to Mark Karpeles, right? A. Yes. Q. You found that based on publicly available information? A. Yes. Q. So you decided to look for Mark Karpeles, is that right? MR. DRATEL: Objection. MR. TURNER: Your Honor, this has already come in through cross. MR. DRATEL: I know, but the leading parts -- THE COURT: Try not to lead. I will allow it. Try not to lead. Take your time. Page 750 MR. TURNER Q. So you decided to look for Mark Karpeles, is that correct? A. Yes, I did. Q. You wanted to see if there was anything further -- MR. DRATEL: Objection. Q. -- in this connection? MR. DRATEL: Objection. THE COURT: Sustained. MR. DRATEL: Objection as to the -- THE COURT: I'm sustaining it. MR. DRATEL: OK. MR. TURNER Q. You testified on cross you got a search warrant on Mr. Karpeles' email, is that right? A. Yes, I did. Q. And you searched through all those emails? A. Yes, I did. Q. When did you finish looking into those emails, by the way? A. It took me awhile, a few weeks, a month maybe. Q. What time of year? When did you -- A. It's hard to say. Q. Was it in 2014? A. Because I think by the time we got it later on, it probably ended early 2014. Q. OK. So this was after Mr. Ulbricht's arrest you finished looking up through all those emails, is that correct? Page 751 A. Yes. Q. And when you looked through all those emails, what kind of company did you learn that Mr. Karpeles ran? MR. DRATEL: Objection. Foundation. THE COURT: Well -- MR. DRATEL: Hearsay. THE COURT: Hold on. I get the drift. Sustained. We are going to have to come at it a different way, based on what we did earlier. Gander/goose. What's good for the goose is good for the gander. Q. What sort of email did you see? What were the emails about? MR. DRATEL: Objection. THE COURT: I will allow there to be a topical description, but it is not for the truth. It's just for the topics. You may proceed. A. Generally, I mean, it was about his hosting services that he had, so the majority of the emails that were coming through revolved around that as well as his bitcoin business. MR. DRATEL: Objection. MR. TURNER: Your Honor, this all came in during cross. Q. You testified on cross he hosted websites, is that right? Page 752 A. Yes, he did. Q. OK. So what was his Web hosting company called, by the way? A. KalyHost. MR. DRATEL: Objection. Foundation. THE COURT: I will allow it. Q. K-a-l-y-h-o-s-t? A. H-o-s-t. Q. Did it go by any other names that you saw in emails? MR. DRATEL: Objection. THE COURT: Ladies and gentlemen, if he did and didn't confirm it, then it wouldn't be in for the truth, it is just for what he saw in the email, and the email may have had certain words, and I will allow is for that purpose. A. AutoVPS I believe was the name of the other company. Q. Remind the jury what a Web hosting company does. A. Web hosting is a company that you could go to to host websites. Q. Right. A. So you could buy services from them. Q. And does that involve renting server space from the companies? A. That does include that. Q. So if you -- you said earlier that you looked up Mr. Karpeles and there were many, many servers registered to him, many IP addresses registered to him, right? Page 753 A. That's correct. Q. If you own a car rental company, do you own a lot of cars? A. You own a lot of cars, yes. Q. What do you do with those cars? You rent them out to? A. Other people. Q. Right. Do you control where those other people drive with the cars? MR. DRATEL: Objection. THE COURT: Sustained. Q. With a Web hosting company, when the Web hosting company rents out its servers to other people, does the Web hosting company control what the customers put on their websites? A. No, they do not. THE COURT: We are going to end in just about two minutes on the dot. MR. TURNER: I think I can almost get through, your Honor. I think I can get through. THE COURT: But don't rush it in terms of I'm not sure that this witness -- I don't know whether this witness will be on or off the stand, so I just want to make sure that you don't proceed on that assumption. Go ahead. MR. TURNER Q. All right. Now, when a customer of a Web hosting company sets up a website, is there any type of information the customer has to provide in order to register the website? Page 754 MR. DRATEL: Objection. THE COURT: Sustained unless you can build a foundation for that. Q. Do you know? A. Just what I have observed through looking through Mark Karpeles' emails. MR. DRATEL: Objection, your Honor. Q. Let's back out of this area of the document here, please, Mr. Evert. You testified before that you are familiar with the who.is database, right? A. I am. Q. Is this database relied on regularly by people to figure out who websites are registered to? MR. DRATEL: Objection. MR. TURNER: I am building a foundation, your Honor. THE COURT: I know but not to "everybody." You can ask him if he relies upon it. MR. TURNER: Sure. Q. If a person -- well, excuse me. Do you rely upon who.is in order to determine who a website is registered to? A. There is information you could use off of that, yes. Page 755 Q. It is a publicly available database that is available for that purpose? A. Yes, it is. THE COURT: All right. We are going to end here, Mr. Turner. MR. TURNER: OK. THE COURT: I know that you have made a valiant effort to get through it. But you are going to have to come back another day. All right. Ladies and gentlemen, I want to thank you for your patience with us today. And I want to remind you not to talk to each other or anybody else about this case, and to avoid any mentions of this case that you may see in any news reports or media reports of any kind. And we'll see you tomorrow morning. We'll start at 9:30, I hope, right on time. Thank you very much. Good night. THE CLERK: All rise as the jury leaves. *(Continued on next page)* Page 756 *(Jury not present)* THE COURT: Why don't you go ahead and step down, sir. Let's all be seated here. *(Witness not present)* THE COURT: Not knowing what there will be on these topics for any recross, which I am considering in light of all the back and forth we have, we have had a lot of evidentiary objections -- for instance, if there were recross, I would not necessarily cut it off. I didn't want to have you end with this witness and then have pressure whether or not to bring him back. I wanted to for this particular witness, given the difficulty we have had with everything today, to proceed and let it unfold as it needs to unfold. Mr. Dratel, Mr. Turner had suggested earlier that he is about to end with this witness. I have one, two, three, four, five, six topics I think he has covered. That doesn't mean that you have to cover all of them, but at this point are you thinking of any recross? MR. DRATEL: Yes, your Honor. THE COURT: Approximately how long do you think you will take on one or more of those topics? MR. DRATEL: Your Honor, let me just look through my notes. THE COURT: Yes. *(Pause)* Page 757 MR. DRATEL: I would think right now we're about 15 minutes. THE COURT: All right. Terrific. So we ought to then plan on, if all goes well in the morning we'll be moving on to our next witness, which will, I'm sure, some relief to us all. In terms of tomorrow's examination, is there anything that people expect to come up that we ought to be thinking about right now versus having to deal with it tomorrow? We now know the nature of, generally speaking, where folks are getting exorcised and not. MR. TURNER: With respect to this witness or the next, your Honor? THE COURT: No. Right now I am just dealing with this witness. I just want to see whether there is something that we know of that is going to come up, for instance, that's going to be getting into areas that we'll need to address. Because, if so, I want to have a chance to think about them and you folks as well. MR. TURNER: To the extent the defense wants to revisit the issues that we went over today in terms of getting back to the agent's beliefs about -- THE COURT: I will let him preview that. MR. TURNER: -- on redirect -- THE COURT: There is nothing else that you are going to be doing on your redirect that you expect will raise particular issues? Page 758 MR. TURNER: Not that I can think of right now. THE COURT: All right. Mr. Dratel, are there things which you expect will raise particular issues? MR. DRATEL: On this witness? THE COURT: On this witness right now for tomorrow morning. MR. DRATEL: Not directly related to the redirect. THE COURT: All right. OK. If anybody has any cases on the statement relating to the complaint, I'm not finding anything that's jumping out at me, but I don't have time to look at it closely right now. Give it to me the first thing in the morning and I'll read it. I also have gotten and you folks could presumably get a copy of the sealed portion of the transcript. If you want to get a copy of it and look at it and tell me whether there is anything that comes out of it that you think we need to talk about tomorrow morning, we will do that at 9 as well. Is there anything else, folks? No? MR. TURNER: Nothing here. MR. DRATEL: No, your Honor. THE COURT: All right. I will see you folks tomorrow morning. We are adjourned. THE CLERK: All rise. *(Adjourned to 9 a.m., Wednesday, January 21, 2015)* Page 759 INDEX OF EXAMINATION Examination of: Page JARED DER-YEGHIAYAN Cross By Mr. Dratel . . . . . . . . . . . . . 617 Redirect By Mr. Turner . . . . . . . . . . . . 729 GOVERNMENT EXHIBITS Exhibit No. Received 149 . . . . . . . . . . . . . . . . . . . . 747 150 . . . . . . . . . . . . . . . . . . . . 748 DEFENDANT EXHIBITS Exhibit No. Received F . . . . . . . . . . . . . . . . . . . . . 631 Page 760 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK ------------------------------x UNITED STATES OF AMERICA, v. 14 Cr. 68 (KBF) ROSS WILLIAM ULBRICHT, Defendant, ------------------------------x New York, N.Y. January 21, 2015 9:22 a.m. Before: HON. KATHERINE B. FORREST, District Judge APPEARANCES PREET BHARARA, United States Attorney for the Southern District of New York BY: SERRIN A. TURNER TIMOTHY HOWARD Assistant United States Attorneys JOSHUA LEWIS DRATEL LINDSAY LEWIS JOSHUA HOROWITZ Attorneys for Defendant - also present - Special Agent Vincent D'Agostino Molly Rosen, Government Paralegal Nicholas Evert, Government Paralegal Sharon Kim, Government Intern Page 761 *(Trial resumed; jury not present)* *(Case called)* THE COURT: Good morning to all of you. The first thing I would like to do is to have you, Mr. Dratel, while I am addressing a couple of other matters gather up what I have been referring to as the AA posts that you wanted to compare to the mises piece, the mises.org piece, so I can just take a quick look at them. I have reviewed the portion of the transcript yesterday, as I had told you I would, early relating to that discussion. So I just want to take a quick look and see whether or not we're able to do anything with that. MR. DRATEL: I'm not sure what the Court means in terms of are you talking about the language analysis? THE COURT: Yes. We dealt at sidebar with an evidentiary issue, and you wanted to use some mises posts of some sort with the Silk Road forum. MR. DRATEL: No, it is not the mises posts with the Silk Road forum. What it was was -- THE COURT: Two different. One was a mises.org. MR. DRATEL: It was not mises.org necessarily. It was this witness' analysis, comparison of the writing that he attributed to Anand Athavale and Dread Pirate Roberts' writing as well in comparison. THE COURT: Do you have -- Page 762 MR. DRATEL: Yes. I can find it from the 3500 -- THE COURT: If you can. Because what I am wondering is whether or not there is a way of doing something that is a factual-based series of questions. In other words, in terms of were you familiar with these mises whatever they are called, whatever the right word is called. Did you review them in the course of your investigation? Yes. And did they have the following name associated with it? Or whatever they are. Did you separately look at Y? And then you can draw -- he can't talk about his conclusions, and I won't let him talk about his assumptions, but you can, through argument, draw whatever inferences you want to draw. This is the first issue. Yes. But I need to see the stuff -- before I even know if that works, I need to see the materials. MR. DRATEL: Sure. MR. TURNER: Your Honor. THE COURT: Yes. MR. TURNER: I don't think the defense has the actual mises.org. The defense is referring to the defendant's own analysis. THE COURT: I understand he has referred to it like that. I'm trying to get underneath that and to see if there is something factually that will work. So let me see what he's got and then we'll figure out if there is anything that we can do with it. Page 763 The conclusions of the analysis I'm not allowing in, but whether or not there is the data that he used to do the comparison, this witness used to do the comparison, whether or not that could be presented to him. Did you use this data? Yes. Did you compare it to this? Yes. That is something that I want to assess. MR. TURNER: We would still be left with the authentication issue, your Honor. This witness does not have the necessary foundation to -- THE COURT: I believe that if he physically possessed the documents, then Mr. Dratel can resolve that by saying did you do anything to determine other than the fact that you printed these off the Internet. I mean, it is up to argument, the weight that the jury gives it. They are not coming in for the truth. They are not going to be -- let me just see what he's got. OK? We've got other issues to deal with. Let me deal with some other issues first. OK? The other issue is Complaint Paragraph 22C. I have reviewed case law relating to the admissibility of complaints signed by government agents. I believe that Mr. Dratel is correct that that one paragraph can be put in. I didn't receive any letters from you folks. So it's Paragraph 22C. Now, the way that that would be done would be stating: In September 2013, the government made the following statement, and the paragraph would be read in its entirety. But based upon the Ramirez case, in the Second Circuit 1990, as well as some certain other cases, that appears to be something which can be done. Page 764 Mr. Turner. MR. TURNER: Your Honor, we haven't had a chance to look at that case. We ask for the opportunity to do so. THE COURT: Did you find any other cases? You folks were tasked last night with coming up with any case law you felt was supportive of your respective positions? MR. TURNER: That was considered hearsay. The problem is the defendant isn't even offering it for the truth. They are offering it to try to impeach him, essentially. THE CLERK: He offered them separately. He made a proffer. I agree with you, and I had considered whether or not this should be done in the context of the defense case. That is one possible issue. However, Mr. Dratel did specifically recite the hearsay rules to get it in as an admission. In fact, he cited three of them, one of which I think is more applicable than the other two; that is the party admission. MR. TURNER: But, your Honor, that principle applies when the party is trying to put that proposition in for the truth. What they're trying to do is say the government made an inaccurate statement. They are trying to sort of impeach this statement. Page 765 THE COURT: No. I think his theory, from his opening, which is why I've also considered the materiality of it and wondered whether this is a collateral issue solely for impeachment but then I recalled that in his opening Mr. Dratel, as I understand part of your point, it's that this website was alleged to have been making money hand over fist. So where is -- show me the money. Basically, where's the beef. And if the defendant wasn't caught with the beef, then that's a point Mr. Dratel wants to make, that that absence is an additional circumstantial fact supportive of identity. I think that is the argument. So I think he wants it in for the truth. Am I wrong about that? MR. DRATEL: No, your Honor. You are correct. It is an admission and it doesn't have to impeach, and the Court is correct with respect to the GAF case. THE COURT: Yes, I have read the GAF case. MR. DRATEL: It is really dispositive. It also says that a party -- and, also, the Court mentioned Ramirez, also, Warren, you know -- and I will just quote from it, where, quote, the government has indicated in a sworn affidavit to a judicial officer that it believes particular statements are trustworthy, close quote, the Court -- and then the quote continues -- may not sustain an objection to the subsequent introduction of those statements on grounds that they are hearsay. Page 766 THE COURT: Right. MR. DRATEL: That is 22 -- THE COURT: Yes, I read the Warren case. I think that is a D.C. Circuit case. The GAF case had to do with a bill of particulars, but I think it is sufficiently close that the principle applies. MR. DRATEL: Right. And I think, also, GAF also stands for the proposition that even if the party changes its strategy or its position in litigation, that prior position is admissible. THE COURT: That was the situation in GAF where they had two different bill of particulars. MR. TURNER: Your Honor, if I may? THE COURT: Yes. MR. TURNER: First of all, the government would like an opportunity to look at this law, and this is law that we haven't had an opportunity to see. It is not an urgent -- THE COURT: You were supposed to look at it last night. I did last night go over the things that were going on for this morning. MR. TURNER: We did, your Honor, but we never received anything from the defense. We don't know what specific cases your Honor looked at. We would simply like an opportunity to take a look at those cases ourselves and address them. I want to make clear, though, your Honor, the government is not changing its position. The amount of bitcoins we're talking about is still the same. Page 767 THE COURT: It is still 1,229,456? MR. TURNER: It is slightly higher, but the point is the valuation -- THE COURT: That is actually stated here. That bitcoins had fluctuated greatly. That actually is why, in terms of completeness, I had suggested that Mr. Dratel would read the entirety of the paragraph. MR. TURNER: Precisely. That is why this is going to cause juror confusion. The amount of bitcoins is not significantly changing -- THE COURT: If you folks can find cases contrary to -- I think Mr. Dratel has got his hands on the rights cases, which are the same ones I have looked at, with the addition of the Santos case, which is a case where the Second Circuit actually -- it was an old case. It was pre-rules. But then later on, in a later case, the Second Circuit ends up saying we want to reaffirm the holding in Santos. If you want to take a quick look? But at this point, Mr. Dratel, if you wanted to use this for impeachment, you can use anything for impeachment. But in terms of reading it, we'll hold off for a little while. You can do that at any point in time. You can do it when the government rests, but I'm not at this point going to have a ruling stand yet that he is precluded from reading it, because I think the better reading is that as to this paragraph he can read it. Page 768 MR. TURNER: Your Honor, one more suggestion. We're going to have a witness toward the end of our case who is going to testify about the statistics, about the bitcoins that were seized from the defendant's computer, from the Silk Road server. If the defense wants to use it in the course of cross-examination to try and impeach the witness' statement or something like that, I think it would make a lot more sense then. All I'm saying is that there is no urgency now in case you -- THE COURT: The point is that I want to make sure that while the current witness is still on the stand Mr. Dratel has an opportunity to use this. The witness may have in fact read the Complaint in this action. If the witness, who has testified about the amount that he found in certain accounts was X, if this is of any value to impeachment, I don't know that it is, but I want to make sure that there is no ruling precluding the use of 22C from the Complaint for impeachment purposes. Moreover, separately, and at another time, it is my inclination to allow it to be read in as a party admission. A party admission need not be an inconsistent statement to come in. But we don't have to -- I agree with you on the latter point that we don't have to face that issue until a little bit later. But I want to make sure Mr. Dratel understands he can use 22C. Page 769 MR. DRATEL: Thank you, your Honor. THE COURT: All right. Now, the other issue is -- I'm waiting for the mises.org -- MR. DRATEL: I'm trying to look for them and engage in the discussion at the same time. By the way, your Honor, yesterday I believe what he said was you did not ask for a letter from us, you had the cases, indicating the cases. THE COURT: The last thing, while you are looking for the mises stuff -- let me just tell you while you are looking for it, what I am thinking of, Mr. Dratel, is literally taking the two factual pieces, the mises piece and the other piece, asking him have you looked at each of them. Not asking him about his conclusions. And if then you want to ask him did he notice the word ABC and it happens to match ABC, he can stay yes, but not ask him if he drew any conclusions about whether this guy was DPR. What you can then do is through argument draw whatever inferences you believe are appropriate. But it's the factual back and forth that I think could be appropriate while the speculative conclusions would not be. MR. DRATEL: OK. THE COURT: OK. That is what I am thinking. We'll see if the evidence would work. Page 770 MR. TURNER: Your Honor, again, the evidence is being offered that Anand Athavale posted these things, and all that would be relied upon would be a page that the agent -- THE COURT: You can go back and say -- I mean, I would expect Mr. Dratel would have no problem saying: Do you know for a fact who posted these? MR. TURNER: Right. THE COURT: And this guy can say: No. All I know is they were associated with this name. I didn't do any independent verification. MR. TURNER: Then it should not come in. It is a threshold issue, your Honor -- THE COURT: No. Because I will tell you why it is relevant. It is relevant because during the course of the investigation there was an exercise that was done, and I'm not putting it in for the truth of whether these are from Anad, whatever his name was, or not, that there were certain materials -- they could have been from a trashcan -- compared to other materials. It was part of what he did. I'm not asking or confirming whether or not Anad was in fact the author of the mises piece at all. It is just that he did this analysis. He compared the two. And then we can figure out where to go. But the fact of the comparison I don't believe is hearsay. I don't believe it's irrelevant because it's probative of identity, which is a material issue in dispute. And I believe that his exercise -- whether the exercise was based upon competent evidence or not is a different issue. It's not the pages which are being admitted for some sort of truth-finding exercise, it is the exercise. Page 771 MR. TURNER: It is not a hearsay issue, your Honor. I am not arguing it is a hearsay issue. It is an authenticity issue -- THE COURT: No. But the authenticity is that -- I mean, all I need these pages for, to come in for, the only purpose is that those are the pages he used. They're authentic pages which he used. Whether they are in fact authentic from mises or in fact authentically from a particular person is different from whether he in fact held them in his hands or looked at them on the screen and used them. If you have doubt that these are the pages he used, then we have an authenticity issue. If there is no doubt that these are the pages he used, it is not about authenticity of the pages, it's about authenticity of the underlying information. MR. TURNER: The government, your Honor, so if you look at Vayner, the issue there was the document -- there has to be evidence the document is what it purported to be. THE COURT: And that was a pause. What it purported to be were the pages this fellow used. Page 772 MR. TURNER: Right. In Vayner it was purported to be the Russian Facebook page of the defendant. OK? And the Court just didn't say, well, there are pages on the Internet and that is fine. The Court said that they're being offered as pages of this particular defendant and there has to be authentication. If I may? Here, it's clear the defense is offering this as pages posted by Anad Athavale. So Vayner carries over. You can't simply have the agent say, well, I had his name Anad Athavale on it and, therefore, that is enough to authenticate it. THE COURT: No. I think that the purpose in Facebook was to show that particular statements in Facebook were true and that were statements of the posting party. That's not part of this exercise. MR. TURNER: It wasn't to show that they were true. It wasn't a hearsay issue, your Honor. It was an authentication issue. THE COURT: Before they got to the hearsay issue. MR. TURNER: The point is this exercise your Honor is referring to is only relevant insofar as they are trying to show an alternative perpetrator theory. THE COURT: Yes. MR. TURNER: The alternative perpetrator theory is there is this guy out there, Anad Athavale, and he posted all of these things on mises.org, and his language choices match up with Dread Pirate Roberts. Things like he spelled "a lot" a-l-o-t instead of with a space. It is actually quite silly when you look at it closely. In any event, in order to prove that theory, like your Honor explained yesterday, you have to have the chain of inferences laid out. You have to be able to offer the chain of inferences. Here it is a key inference or it is a key point along that chain of inference that the pages at mises that this Agent looked at were Anad Athavale's actual posts. Page 773 THE COURT: What I'm suggesting is he cannot testify and would not be allowed to testify that these were Anad Athavale's posts. All he can say is I found these -- as part of my investigation, I found these things on the Internet. I did the following comparison to things on Silk Road. Full stop. MR. TURNER: And as long as there is absolutely no mention of Anad Athavale -- THE COURT: Not "no mention." He can look at the page and say this, but he can also say I have no idea whether it was him or not. I have no idea if John Doe posted these. All I know is that was the name. MR. TURNER: But, your Honor, if that had been the way things go in Vayner, then the Court would have said, well, no, it is fine, just let it in and then the jury can be instructed that the agent has no way of authenticating this issue but it should go to the jury anyway. That is not how the Vayner Court applied the rule. It is a threshold issue. Page 774 THE CLERK: I hear you. I am using it for a different purpose. Let me see the information on both sides of this. I don't know if it works in the way that I'm suggesting. MR. TURNER: And, again, we just stress that the proper way -- if the defense wants to establish this theory, the proper way to do it is actually put the mises.org posts before the jury, properly authenticate them. Then they can draw the inferences. They don't need the agent to do so. The agent's opinion -- THE COURT: He is not going to draw -- I am not going to let him draw his conclusions. MR. TURNER: Then there is really no need for the agent to testify about it. THE COURT: Here's the point. Part of his investigation was looking at a variety of information, and there were a variety of facts which indicated circumstantially and built a case. These are among the facts that eventually circumstantially fell off. The jury might credit them more than he credited them, but it is up to them to credit them. And -- MR. TURNER: This is exactly what the Johnson line of cases talks about, that sort of the investigative background, the story of how the investigation proceeded, is not relevant and that -- Page 775 THE COURT: But that was for the investigative background to show -- in the Johnson case, it was to show really sort of important things coming in that were hearsay as background. And the Court said no, no, no, no, no, you can't wedge in as background these clearly disputed issues of fact. That's the Johnson case. That's not this. Let me see what Mr. Dratel has. This may or may not go anywhere, but I do want to see what the lay of the land is. MR. TURNER: OK. But just to finish the thought, I think the Court in Johnson emphasized the dangers of introducing background evidence like this, because it can give the impression the agent found this important, the agent, you know, had suspicions about this evidence at the time. That is why the Court said it's generally not relevant, and -- THE COURT: I hear your point. Mr. Dratel, do you have anything to hand over? MR. DRATEL: Yes, I do, your Honor. Thanks. Some of them are not consecutive so I've -- well, there are a couple -- I've categoried them -- THE COURT: Can I have the prosecution come up here as well? Walk me through these. MR. DRATEL: Oh, sure. This is all from the 3500, obviously. This is from emails, and then the top part is a profile of Mr. Athavale. Page 776 MR. TURNER: Can we be clear when you are talking about emails? MR. DRATEL: Emails from the agent. This is an email from the agent or a report, really, from the agent. And it lists first the usernames -- I mean the IP addresses, usernames. And then on this page it starts with the writing analysis that he has done. There is an earlier -- there is also a report that he has written, which is another part, which is essentially the same but it just appears in a different part of the 3500, where he talks about there is an extensive analysis of distinct writing styles, sayings, spelling mistakes, clichés, and specific nuances which have led to determining -- and then it is redacted -- it is a highly likely target. In fact, four pages are redacted. I think it is what is in this report and in other parts of the 3500. I don't really understand the redactions. There are a lot of redactions in the 3500 of the agent. For a period, I assume, that they had things that were properly redacted. I think this is not properly redacted, but I imagine that we have it in this report so I'm not sure that there is an issue. But, anyway, then he goes on to list them in about six pages worth. And he also talks at another point about -- and I'm not sure if it is in this one. Let me just see if it is in this part, where he talks about having sent it to a college professor. Page 777 MR. TURNER: Is it irrelevant? MR. DRATEL: The fact that he sent it is not a conclusion. If the government wants to bring out a conclusion, that's fine. *(Pause)* THE COURT: Do you have the -- what you have here -- and I'm focused on the "boths," do you have the two things that were being looked at that resulted in that determination? MR. DRATEL: No, I don't have the mises posts because it is just digested here. This is the sort of longer version of that in terms of it has the quotes pulled out, to a certain extent, on what he based it on. There is another section in this part that goes into it in greater detail in terms of the analysis. MR. TURNER: Your Honor, what's being done here is we are talking about thousands of posts. Instead of trying to get a competent representation of those posts, he is just drawing on this agent's memories, this agent's perceptions. If it is going to be done right, the right way to do it is to have the actual documents themselves. This is akin to us drawing somebody off the streets and saying, hey, do you remember looking at a bunch of posts on a website and were there similarities between the posts and what you saw on the Web page. That is an improper way to prove our case. It should be an improper way for the defense to prove their case. Page 778 THE COURT: The difference is this is an agent who is not pulled off the street who was tasked with being careful and accurate within the constraints. Here's what we're going to do. We're going to -- let me just sort of see if I can do a series of questions. *(Pause)* THE COURT: What are these things called, these posts? MR. TURNER: It is a report of email. I can go back and find the first page. THE COURT: What was he comparing it to, the mises compared to? MR. TURNER: To DPR posts. THE COURT: On what? MR. TURNER: On the forum -- also, everything he gets his hands on from DPR. THE COURT: OK. This is what I am going to allow. I'm going to allow questions along the following lines. MR. TURNER: Should I take notes? THE COURT: No, I'm going to hand you my page. Did you look at the posts from the mises.org? Whose name appeared? Do you know if in fact it was this person? He will say no. Did you confirm that it was this person? So it is clear he did not confirm. Did you compare what you found from the mises' posts to anything else, in fact, to the DPR forum? Yes. Did you look at words? Yes. Did you make certain factual determinations as to the appearance of words in certain places? Yes. Page 779 What I do not want, and will not allow, is his conclusion here where he talks in the first one: "Both use the same writing style." OK? He can't say that. MR. DRATEL: Right. THE COURT: But he can say both spell the word "realtime" with a hyphen. That is an English language comparison. The government can then go back on cross and unsettle, undo the mises posts. MR. TURNER: Your Honor, I just want to make sure we have a clear record. When your Honor says the agent can be asked did you do anything to confirm this came from this person, that goes to the reliability of the document. And that's the whole point of the rules of evidence, that documents that aren't proven to be reliable should not come in in the first place. That is the very reason -- the same thing with the LinkedIn pages yesterday. If they cannot be shown to come under a hearsay exception, they can't just go to the jury with the instruction that they can't be -- that the agent didn't do anything -- THE COURT: Well, what you can do on cross-examination is bring out that he has no idea if this was from this person or another person or the man on the moon. But I am going to allow this. I understand the government's position is that they oppose vigorously. Page 780 MR. DRATEL: Your Honor, just two things. One is with respect to instead of asking him a sort of imperative question, "Did you confirm," can I ask him "Did you do anything to confirm?" because I don't know the answer? THE COURT: Fine. MR. DRATEL: Can I say, "Did you send all of this material to a college professor for analysis?" Just that question. MR. TURNER: We argue that it is irrelevant to anything. THE COURT: Well, it is not irrelevant. Yes. MR. DRATEL: Thank you. THE COURT: All right. The last thing we'll take up at another time is how to deal with the strikes. I don't want to take it up now. Do we have a full jury, Joe? THE CLERK: We do. THE COURT: We are going to proceed. All right? MR. DRATEL: Your Honor, the government has provided me a proposed instruction which I have some problems with, so we'll try to work on that. Page 781 THE COURT: All right. Thank you. Let's bring out the jury. Get Mr. Der-Yeghiayan on the stand. MR. TURNER: Are we going to redirect, your Honor, or back to cross? THE COURT: We are going to go to redirect and then go back to cross. But I will allow Mr. Dratel, if necessary, to go beyond the scope of the redirect to correct my rulings from yesterday. MR. DRATEL: Thank you, your Honor. *(Pause)* MR. DRATEL: Your Honor, while we are waiting, could we just do a quick sidebar? THE COURT: They will be horrified if the jury walks out and see us at the sidebar. It will be like, you know, Groundhog Day. THE CLERK: All rise as the jury enters. *(Continued on next page)* Page 782 *(Jury present)* THE COURT: All right. Ladies and gentlemen, as we get to our seats, let's all be seated. And we are still on the redirect of Mr. Der-Yeghiayan. And you remain under oath, sir. Do you understand that? THE WITNESS: I do. Thank you. JARED DER-YEGHIAYAN, Resumed, and testified further as follows: THE COURT: Thank you. You may proceed, Mr. Turner. MR. TURNER: Thank you, your Honor. REDIRECT EXAMINATION (Resumed) MR. TURNER: Could we put Government Exhibit 149 on the screen, please? Your Honor, I believe the defense is now going to stipulate to the admission of this document. MR. DRATEL: Yes, but just as it appeared on archive.org at that time. THE COURT: All right. Thank you. 149 is received. *(Government's Exhibit 149 received in evidence)* MR. TURNER: Mr. Evert, could you zoom into the top Paragraph there. MR. TURNER Page 783 Q. OK. So it says, "This is not the Silk Road, but you are close. The Silk Road is an anonymous online market. Current offerings include marijuana, harsh, shrooms, LSD, ecstasy, DMT, mescalin and more. The site uses the Tor anonymity network, which anonymizes all traffic to and from the site, so no one can find out who you are or who runs Silk Road. For money, we use bitcoin, an anonymous currency." Yesterday you testified that this website was hosted at a Web hosting company controlled by Mr. Karpeles, right? A. Yes, it was. Q. And the name, again, of the company was what? A. It is KalyHost. Q. Did it go by another name as well? A. There is AutoVPS. Q. And you testified yesterday you searched emails associated with Mr. Karpeles' Web hosting company, is that right? A. Yes, I did. Q. Did you find any emails from the email address staff@silkroadmarket.org in there? A. Yes, I did. MR. TURNER: May I approach, your Honor? THE COURT: You may. Q. Do you recognize this exhibit? I'm showing you what's been marked as Government Exhibit 151. A. I do. Page 784 Q. How do you recognize it? A. It's one of the emails that I observed in Mark Karpeles' email account. MR. TURNER: Your Honor, the government offers Government Exhibit 151 into evidence. MR. DRATEL: Objection. THE COURT: Give me one more word. MR. DRATEL: Oh, hearsay. Foundation. MR. TURNER: It is not being offered -- THE COURT: Overruled. Government Exhibit 151 is received. MR. DRATEL: Your Honor, also authenticity. There are no headers. There is nothing. This could have been -- THE COURT: Why don't you do a little more to lay a foundation as to this, and then subject to that foundation it is received. MR. TURNER Q. Where did you receive the documents from? A. The email came from Gmail from Google. Q. OK. THE COURT: Was that part of the subpoena response. THE WITNESS: It was the search warrant results that were returned by Google. THE COURT: Thank you. You may proceed. It is received. Page 785 *(Government's Exhibit 151 received in evidence)* MR. TURNER: Could you put it up on the screen, Mr. Evert. Could you zoom in on the top. Q. It is from "staff@silkroadmarket.org." The date is March 18, 2011. It's to "support@autovps.net." The question is: "How do I upgrade my memory for my VPS with AutoVPS?" Do you know what the terms "VPS" refers to? A. It is virtual private server. Q. Do you know what that term means? MR. DRATEL: Objection. THE COURT: Sustained. Q. Have you ever rented server space before? A. I have. Q. From that experience, are you familiar with the term "virtual private server"? A. I am. Q. So based on that -- MR. DRATEL: Objection. Q. -- can you explain what virtual private server space is? THE COURT: No. This question is fine. You may answer. A. Essentially, it's space that's allocated or taken from a server that's assigned to you. So it acts as if it is a server of its own. So it is just taking space and giving it to you and allowing you to use it like a regular server would. Page 786 Q. And this email address, to support@autovps.net, in reviewing the emails that you saw in that search warrant return, did you see other emails that were addressed to support@autovps.net? A. I did. Q. What are those emails generally about? MR. DRATEL: Objection. MR. TURNER: Not for the truth, your Honor. MR. DRATEL: Objection. THE COURT: You could give some topics. You may answer. A. Basically -- I mean, for the most part, customer-support-related inquiries related to the hosting service. MR. DRATEL: Just objection, your Honor, with respect to any inference that it is from silkroadmarket.org. He is talking about entirety, right? THE COURT: Let's talk about that at the break but I have allowed the answer. MR. TURNER Q. Just to be clear, are you talking about customer support inquiries from multiple other customers or just staff@silkroadmarket.org? A. There were multiple customers. Q. OK. So support@autovps.net was used to receive customer support inquiries? Page 787 MR. DRATEL: Objection. Q. Is that basically your testimony? MR. DRATEL: Objection. THE COURT: Overruled. A. Yes. Q. Now, did -- and just to be clear, when you were talking about the search warrant for emails, it is a search warrant for emails associated with Mark Karpeles' Web hosting company, is that right? A. There were multiple, yeah, email accounts, I mean, we looked into for Mark Karpeles. *(Continued on next page)* Page 788 MR. TURNER Q. Now, did Mark Karpeles' web hosting company KalyHost AutoVPS help their customers register their websites? MR. DRATEL: Objection. THE COURT: Based upon your review, was there information which indicated that to you? You may answer. A. Based upon my review and then also had registered before, I participated in registering -- also from my review, I've seen it and from registering the site through KalyHost. Q. So you yourself tested it out by registering a site on KalyHost? A. Yes, I participated in that. Q. Can you explain briefly what it means to register a website? A. It means to provide information to basically claim ownership over a website name and to provide your personal details to take ownership of it. Q. So when you registered a website on KalyHost, did KalyHost ask you for any information like that? A. They did. Q. What sort of information? A. There was information such as like a point of contact, so it asked for your name, email address, address, telephone number, as well as technical point-of-contacts and administrative point-of-contacts. Page 789 Q. Were you required to verify that information in any way? A. No. Q. Is there any way the public can view register information associated with website addresses? A. Yes, there is. Q. And how can they do so? A. It's called a who.is database, so it's a public database that records that information when you do register a website. It keeps track of basically what information you provide when you do register it so you can search that publicly. Q. Is that information available in the who.is web page that we looked at earlier? A. That available there; yes. Q. Can you put GX 150 back on the screen, please. Can you zoom in here. Going back to this web page, who does it reflect registered the silkroadmarket.org website? A. The information provided shows that it was registered to Richard Page at 11640 Gary Street, Garden Grove, California, 92840, and it's a telephone number, and then as well is an email address which is richardpage@gawab.com. Q. Did you look into whether this address -- and, Mr. Evert, can you zoom in here so it's very clear. Did you look into whether this address, 11640 Gary Street, Garden Grove, California, was a real address? Page 790 A. I did. Q. And whether the phone number was a real phone number? A. I did. Q. How did you do that? A. The address I looked up in our -- the Clear database that we have access to, as well as the telephone number I checked as well. Q. What is the Clear database a compilation of? A. It's a compilation of credit data that's provided, as well as, like, utility bills and public information generally about people, so it stores that information. Q. And is Clear generally accepted and relied upon by law enforcement to check address and phone number information? A. Yes, it is. MR. DRATEL: I'm going to object, your Honor. MR. TURNER: 803.17 provides the basis. MR. DRATEL: This is a database full of hearsay. THE COURT: I'm going to allow it. Q. So, what did you find? A. The address wasn't registered to anybody, so it reflects to me that it wasn't -- there wasn't anyone ever registered to that address. There wasn't utility bills, anything ever associated to that address. Q. Did you find the real address with that number? A. No, I did not. Page 791 Q. What about the phone number? A. The telephone number wasn't registered to anyone of that name. Q. Have you seen this information for Richard Page anywhere else? A. I have. Q. Where? A. When I searched Ross Ulbricht's computer after the arrest. Q. Where did you find it on Ross Ulbricht's computer? A. There was a file by the name of "aliases" on his computer and there was a text document titled "info" that had the same information on there, so the same name, as well as the -- what appeared to be to me names, passwords and usernames for AutoVPS and for KalyHost and for I believe gawab as well. Q. It included the exact same address? A. It did. Q. And the exact same phone number? A. It did. MR. TURNER: No further questions. THE COURT: Thank you. Mr. Dratel. MR. DRATEL: Thank you, your Honor. Can we come up for a second one clarification. It takes a minute. THE COURT: Okay. (Continued on next page) Page 792 *(At the side bar)* MR. DRATEL: I'm just trying to be careful, because mises.org has not come up, I want to ask him what that is and why he was looking at it. That's all. It's part of the investigation, what was the relevance to the investigation? So just two very quick questions on mises.org. THE COURT: Okay. MR. DRATEL: Thank you. *(Continued on next page)* Page 793 *(In open court; jury present)* RECROSS EXAMINATION MR. DRATEL Q. Good morning, Special Agent Der-Yeghiayan. A. Good morning. Q. Was there a time -- I want to draw your attention back to Anand Athavale we spoke about him yesterday, A-T-H-A-V-A-L-E, correct? A. Correct. Q. He was a Canadian citizen who at one time you were looking at, right? A. He was one I investigated, yes. Q. And during the course of your investigation, did you come across a site called mises.org, m-i-s-e-s.org? A. Yes, I did. Q. And what is that? A. It's a website that's set up for libertarian beliefs, as well as there's an online forum associated with it, too. Q. And as part of your investigation, did you -- what was the relevance to your investigation of mises.org? A. There was -- I observed on the bottom of Dread Pirate Roberts' profile that he would link articles from that website for things for people to read. So there would be, on his signature line on his forum profile, he would link mises pages. Q. And did you look at posts from the mises.org forum? Page 794 A. I did. Q. And did you look at posts under the name Anand Athavale? A. It wasn't under his name. Q. What was it under? A. It was under Liberty Student. Q. And how did you connect that to -- did you do anything to connect that to Mr. Athavale? A. I did. Q. And what was that that you did? A. I looked through his posts that were publicly available. I was looking for anything that would be personal indicators to help me identify who -- MR. TURNER: Objection. THE COURT: I'll allow this. MR. TURNER: It calls for the agent's conclusion. A. -- who the person was that was potentially behind that identity on that forum. Q. And at some point, did you compare those posts for libertystudent.org and -- I guess, what facts led you to associate libertystudent.org with Mr. Athavale? MR. TURNER: Objection. THE COURT: Sustained. We'll go on to the next piece. Q. So did you compare those posts from libertystudent.org to anything? A. I compared the posts by Liberty Student on mises to forum posts from Silk Road from Dread Pirate Roberts. Page 795 Q. Anything else from Dread Pirate Roberts? A. As well as undercover chats, as well that I had access to -- and I believe -- there might have been other -- whatever else I had access to, if it was from the marketplace or from anywhere else that was cited from Dread Pirate Roberts at the time. Q. And did you compare the two posts, the words in the two posts, I mean in the two sets of posts, libertystudent.org versus Dread Pirate Roberts? A. I did. Q. And did you find similarities? MR. TURNER: Objection. THE COURT: Did you find sometimes the same word in one as well as the other? THE WITNESS: There were commonalities; yes. THE COURT: Why don't you go through some of the factual commonalities, if there are any. MR. DRATEL: Thank you. Q. And do they both spell "labor," L-A-B-O-R as "labour," L-A-B-O-U-R occasionally, right? A. That was one of them, yes. Q. Both use and spell the word "real-time" with a hyphen between real and time, right? A. That's correct. Page 796 Q. Both use the word "lemme," L-E-M-M-E as opposed to "let me," right? A. There were occasions, yes. Q. Both end sentences with comma, right, question mark? A. Yes. Q. Both spell "route" R-O-U-T-E as "rout," R-O-U-T? A. Yes. Q. Both use the term "intellectual laziness"? A. Yes. Q. Both use the term and actively discussed the concept of "agorism" and the "agorist"? A. Yes. Q. And do you know what that is? A. No, no, I don't. Q. Both use and spell the word "counter-economics" with a hyphen between counter and economics, right? A. That's correct. Q. Both used the term "the ladder" in quotes before the "and" after "ladder," right? A. They did. Q. Both quite often capitalize smaller words when they want to emphasize, right? A. Yeah, like a -- capitalize an entire word, yes. Q. Neither uses hyphens to space out sentences or thoughts, right? Page 797 A. Yes. Q. Both start sentences with "and" and "but" quite often, right? A. Yes. Q. Both will commonly not capitalize the first word in a sentence when replying short and quick? A. Yes. Q. Both used the term "the heart of the matter"? A. That sounds correct, yes. Q. Both quite often will use a backslash, the symbol for backslash on the computer to split words with similar meaning and the second word never having the space after the slash, right? A. That's correct. Q. Both used the term "altruistic," right? A. Yes. Q. Both used the term "pal," right? A. Yes. Q. Both used the term "war mongering"? A. Yes. Q. Both used the term "phoney," P-H-O-N-E-Y, right? A. Correct. Q. Both discuss and mention authors Murray Rothbard, right? A. Correct. Q. And Samuel Konkin? Page 798 A. Konkin? Q. K-O-N-K-I-N? A. Yes. Q. Do you know who they are? A. They were inspirations for Dread Pirate Roberts according to his posts. Q. Are they libertarians? A. As far as I'm aware. I'm not too familiar with them, but yes. Q. Both commonly end sentences with a smiley face or the wink smiley face emoticons? A. On their forum posts; yes. Q. Both sometimes end sentences with the word "amigo"? A. Yes. Q. Both use the term "a narco-capitalist" with a hyphen in the middle? A. Yes. Q. Both misspell the word "alot," meaning that they spell it -- that they're both spelled, in the comparisons that you did, as one word as opposed to two words, "alot" A-L-O-T as one word? A. That's correct. Q. Both have discussed the paleo human, P-A-L-E-O? A. Yes. Q. And they're both use the same expletive, right? There's an expletive? Page 799 A. I believe so, yes. Q. And you wrote a report about that, correct? MR. TURNER: Objection. THE COURT: I will allow this question. A. Yes, I did. Q. And you also sent these sets of posts to an English professor at a university to examine and analyze, right? A. Yes, I did. Q. Now, during your redirect yesterday afternoon, you mentioned that DPR was security conscious, right? A. He was, yes. Q. Did he ever mention he was keeping a journal? A. Not in my posts or private messages or chats, no. Q. Did he ever tell you that he was saving chats on his computer? A. Not that I recall, no. Q. Did he ever tell you that he was using public Wi-Fi? A. No. Q. Now, by the way, when he was out in public the day of the arrest, when Mr. Ulbricht was out in public on the day of his arrest, that was not at your prodding. He went out on his own voluntarily into a public place, right? A. He did. Q. But it was you who asked him to log onto Silk Road, correct? Page 800 A. I asked Dread Pirate Roberts to log onto Silk Road, yes. Q. So let's look at 129C, please, Government's 129C. Now, when you talked about the chat yesterday, that's not part of Silk Road, correct, the chat itself? A. It's not on the marketplace or the forum. Q. Right. It's a separate information called Pidgin, right? A. It's -- I believe it's a Java server that was on Tor. Q. Also called OTR, Off The Record, right? A. It can be done in OTR, yeah. Q. But it's a separate Tor chat program not part of any of the Silk Road website or forums or anything like that, right? A. It was separate from it; yes. Q. So that's what he was logged on to when you realized he was online, correct? A. When I was -- when he came online, this is what indicated to me that he was online, was the chat. Q. Pidgin, not Silk Road, right? A. Correct. Q. He wasn't on Silk Road until you asked him to get on Silk Road, right? A. That's correct. Q. And you say "check out one of the flagged messages for me," and then it says "sure," right, "let me log in"? A. Yes, it does. Page 801 Q. So he's already online on Pidgin, which is the chat program, but he's not on Silk Road at that point, right? A. From -- yeah, from this, yes. Q. And you were asked by Mr. Turner yesterday about who was on the other side of the screen that day, right? A. Yes. Q. And you satisfied yourself based on going into the library looking at the screen that Mr. Ulbricht was on the other side of the screen that day, right? A. Yes. Q. But you can't testify, can you, about who you know was on the other side of the screen (in)any other communication you had with Dread Pirate Roberts, can you? A. No, I cannot. Q. After all, everybody on Silk Road thought you were somebody else for a couple of years, right? A. For the -- MR. TURNER: Objection. THE COURT: Why don't you reframe it. MR. DRATEL: Okay. Q. You were on Silk Road from some time in early 2012 through the end of September of 2013 under various account names, correct? A. I utilized multiple account names, yes. Q. And no one knew your real identity, right? Page 802 A. I only actively chatted, though, with -- primarily with the cirrus account, though, but the rest of the ones were primarily used for either buys or for screen shots. Q. They didn't know your identity, your real identity, right? A. Not on any one of them, no. Q. They had no idea who was on the other end of that screen, did they? A. No. I never told them, no. Q. Also with respect to "flagged messages," you identified the post you were looking for, right? A. At the end of the chat, I told him "the one with atlantis." Q. Right. In terms of who is on the other end of the screen, we went through that exchange before with respect to there was a period of time in which you weren't sure whether DPR was operating someone's account, whether it's SSBD, right, that's a username, correct? MR. TURNER: Objection. THE COURT: Hold on one second. Sustained. Q. Now, you were asked about Government Exhibit 130 on redirect, right, the handwritten notes, right? A. Yes. Q. And you asked whether they said anything about Silk Road or illegal drugs, right? A. I was asked that, yes. Q. But you're aware that in July of 2013, just a couple of months before Mr. Ulbricht's arrest, that he was interviewed by Homeland Security, right? Page 803 MR. TURNER: Objection; foundation. Q. You're aware that he was interviewed, aren't you? A. Yes, I was. Q. And you're aware that it had to do with a shipment from Silk Road, right? MR. TURNER: Objection; foundation, hearsay. THE COURT: You need to go back over that and lay a foundation for it. Q. During your investigation, you became aware, right, that Mr. Ulbricht -- withdrawn. That Homeland Security interviewed Mr. Ulbricht about -- and you've read -- withdrawn. During the course of your investigation, you were kept apprised of what was going on, correct? MR. TURNER: Objection; hearsay, vagueness. Q. For purposes -- you read reports -- THE COURT: Hold on. Ask the question. Q. You read reports about an interview of Mr. Ulbricht by Homeland Security, correct? THE COURT: You can answer that yes or no. A. Yes, I did. Q. And the subject matter was about a package shipped by Silk Road, a Silk Road vendor, correct? Page 804 MR. TURNER: Objection to the hearsay. THE COURT: Right. That's sustained. Q. Now, you were asked also on redirect about travel records, right? A. That's correct. Q. And you said there were some aliases. You ran those aliases for travel records, too, didn't you? A. The aliases for travel records? Q. In other words, any aliases for Mr. Ulbricht that you might have found, you ran them for travel records, too, didn't you? A. I can't recall if I did. Q. Now, we talked about that he takes about a trip a year out of the country. And you were asked about international travel, whether you could determine whether he went from one country to another country, right; you couldn't tell that from the travel records that you looked at in terms of a sheet that you got from border authorities, right --in other words, either leaving the country or coming into the country is what you said, right? A. The records that were reflected in the database that we have access to just shows where they're coming from and where they travel to. Q. But you also had the passport, right? A. I didn't have that until after the arrest. Q. Right, but you had it now and you've had it for quite some time, right? Page 805 A. Yes. Q. So the case passport is in evidence, right? A. Yes. Q. It's Exhibit 134, right? A. I believe so, yes. Q. If we can go to the next page, please. Those are the only stamps in there, right, there's one for Australia, one for the Island of Dominica and one for Costa Rica, right? A. Correct. Q. So if he went from Costa Rica to Brazil, there would be a stamp, wouldn't there, on his passport? A. Not necessarily. There's -- I've worked as border inspector for a lot of years, so I do know that sometimes there aren't always the stamps for the countries they enter into. It just depends. Q. So you know whether he would have been stamped or not? A. I couldn't tell you if another country would for sure stamp it or not. Sometimes they do, sometimes they don't. Q. Those three stamped it, right? A. They did stamp it. Q. And it matched exactly what you had on the travel records, right? A. I'd have to go back and review it, but -- Q. The MediaWiki, right, we talked about that? A. We did. Page 806 Q. And the fact is, though, that the commonality between the Karpeles website and silkroadmarket.org was about the version of MediaWiki, right? A. The version was the same, yes. Q. But it was an outdated version, right? It wasn't the current version at the time, right? A. At the current time, it was an outdated version; yes. Q. So of all the people who use MediaWiki, do you know how many use an outdated version? A. I don't know how many use an outdated version. Q. It's free, right? You can upgrade it for free, right? A. You can, yes. Q. Now, with respect to -- I'm showing you what's marked -- and I'll go back to travel for a second and show you what's marked as 3505-3051 and just ask you to review it. Let me know when you're finished. A. Thank you. Okay. Q. Does that refresh your recollection that the travel records that you reviewed from your database matched exactly the stamps on the passport? A. The stamps match, yes. Q. Now, with respect to the AutoVPS, the Karpeles company, right, is another one of Mark Karpeles' company, right? A. Yes. Q. By the way, silkroadmarket.org moved from one Karpeles company to another Karpeles company, right, at one point, from KalyHost to XTA? Page 807 A. It was, yeah, I believe registered through the one and then I think the domain name server changed over to XTA, yes. Q. And those subpoenas -- I mean, the warrants that you got to look at those emails was part of your investigation of Mr. Karpeles, correct? A. Yes, it was. Q. But, in fact, you did not get those emails, they were not produced until months after Mr. Ulbricht was arrested, right? A. It took a while for the return to come back, yes. Q. If we can look at Government's 149, please, if we could go to the bottom, the very bottom, please, to the URL. In fact, that's from archive.org in March of 2011, right? A. I believe March 4. Q. That's what that 20110304 is right after web slash, right? A. Yes, it's the date. Q. So that's the date that appeared -- going back, archive.org, again just to refresh, just captures pages of the Internet, right? A. It does. Q. And then it puts them in an archive, right? A. It maintains it, yes. Q. And what they do at the bottom in that webarchive.org URL, the Internet address, is that it tells you what date it captured it, right? Page 808 A. Correct. Q. So it captured this particular screen March 4, 2011, right? A. March 4, 2011, yes. Q. By the way, if we go back up to the message, it's from Silk Road staff, correct? A. It was signed, yes, Silk Road staff. Q. Not Dread Pirate Roberts or anything like that, right? There's no Dread Pirate Roberts there? A. That didn't come until I believe January 2012. Q. Correct. At one point you showed us I think it's Government Exhibit 123, the Dread Pirate Roberts profile on Silk Road, the profile page and the registration? A. Yeah. Q. Do you recall? A. I recall, yes. Q. You don't know when that may have been changed to the name Dread Pirate Roberts from another username, right? A. That one was the Silk Road account that changed to Dread Pirate Roberts after he announced his new name on that post. Q. Now, let's look at Government Exhibit 150 which we just saw this morning. Can we look on the left side. There's a date of registration -- no, further down, right there. A. Correct. Page 809 Q. It's registered on February 28, 2011, right? A. Yes. Q. And then it expires -- it expired February 28, 2012. It says "expires on," right? A. Yes, it did. Q. Now, if we look to the right side, that's the one by Richard Page, right? A. The one on the left is by Richard Page, yeah. Q. The one on the right, the registration date is May 18, 2012, right? A. Correct. Q. That's roughly two and-a-half months after the expiration of the one on the left, correct? A. Correct. Q. So let's see who it's registered to as of May 18, 2012. Go down further. There it is. So it's registered to Qin Shu Tong, correct? A. Correct. Q. In China, right? A. In China. Q. And you checked that out, right? A. I looked into that, yes. Q. No apparent connection to anything, right? A. No. Q. So this particular registration with respect to anything connected to Richard Page was over by April of 2012, right? Page 810 A. It wasn't renewed and then it was bought by someone else. Q. Right. Now, you talked about the emails you got from Mark Karpeles' companies, right? A. Correct. Q. Those are the only accounts at Google, right? A. There was -- for him, I believe there was a few. He had a personal one and then he had one that was to Evoni (ph) which is a company. Q. But from Google? A. It all is through Google, yes. Q. You don't know about email accounts that he may have had on proprietary servers of his own, right? A. I do not know of any. Q. So you didn't get to look at those if they exist, right? A. I didn't. Q. Did you ever get to look at any of his Tor chats? A. I did not find any Tor chats from him. Q. Any Java or Off The Record or Pidgin chats of his? A. I did not. Q. Did you get anything from any other servers with respect to Mark Karpeles other than Google? A. Nothing about -- I mean, we did a broader search on another individual from his company, but no. Q. Do you know whether he keeps a journal? Page 811 A. No. Q. Going back to Dread Pirate Roberts for a second, that is announced in the early part of 2012, right, February 2012? A. Yes. I believe so. Q. Now, Mr. Karpeles owns web hosting companies, right? A. He does. Q. A number of them? A. He is -- yeah, well, KalyHost and then he has the AutoVPS, which is a virtual server hosting. Q. And XTA, right? A. XTA, I believe that was the name server. I don't know if that was -- you might be able to register sites on that, too. Q. But a web host can monitor the traffic of their customers, right? A. I believe so, yes. Q. In fact, they can also set rules for their customers, right? A. They can. Q. They also know identifying information about the people who rent space on their server, right? A. They should have, yeah, like registration information or things that are provided to them, yes. Q. I'm sorry. I didn't mean to cut you off. A. That's okay. It's just basic information, whatever is provided, as well as, like, account billing information they should have. Page 812 Q. And also IP addresses and things like that. In the way that the server connects to the outside world, the web host knows all of that because it comes through their equipment, right, correct? A. They should be able to tell that, yes. Q. Kind of like a landlord, right? A. That's a way to describe it, yes. Q. The same thing is true of anyone who runs a bitcoin exchange, right, in terms of knowing about their account holders? A. It changed over time. I think originally a lot of them didn't require very much information to register an account, but a lot of them changed where they started requiring sort of know your customer information. Some actually requires Social Security numbers. Q. But also they can monitor account activity and account movement, they're in a perfect position to do that because it all has to come in and out of their exchange, right? MR. TURNER: Object; foundation. THE COURT: Sustained. Q. As part of your investigation, you looked at MtGox records, right? A. I did. Q. And you looked at how exchanges operate, correct? Page 813 A. I did. Q. And exchanges have all of the information with respect to transactions that their account holders do in the context of bitcoins? Everything that goes through that exchange is information that's -- that the bitcoin exchange has? A. It should be visible to them; yes. Q. So any of the tracing that you could do on the block chain, the bitcoin exchange can certainly do with respect to each account holder? A. They should. Q. Now, we had a car rental analogy yesterday about bitcoin and about servers and rentals. Using bitcoin and even in the context of web hosting, so you may have a fleet of cars that you own but people are driving them but you can put a GPS in there, right, and know exactly what everyone is doing in every one of your cars, right? A. You could. Q. Now, the bitcoin issue: Total commissions collected by Silk Road totaled -- as computed by the government, 614,305 bitcoins was the total commissions collected by Silk Road during the course of its operations, correct? MR. TURNER: Objection; foundation for this witness. THE COURT: Lay a foundation for this witness. Q. You looked at Silk Road, right, as a business, correct, you examined it in terms of revenue and things like that, right? Page 814 MR. TURNER: Objection; form, vagueness. THE COURT: I'll let you answer it if you understand the question. A. I mean, I reviewed the site. I reviewed the transactions on it, the vendors, what was publicly available to me. Q. All right. And you are also familiar with the complaint in this action, right? A. The complaint for Mr. Ulbricht? Q. Against Mr. Ulbricht? A. Yes. Q. The complaint -- so you know that the amount of bitcoins the government computed for the commissions for Silk Road were 614,305 bitcoins? A. I'd have to see the complaint, but yes, it sounds right. Q. I'll show you what we'll mark as Defendant's I for identification and just ask you to read that paragraph, please. THE COURT: So he said this is consistent with what he thinks. This is just to refresh his recollection? MR. DRATEL: Correct. A. Okay. Q. Does that refresh your recollection that the government computed the amount of bitcoins of commission -- I'm sorry -- that the amount of commissions Silk Road earned during the course of its existence up until the point of Mr. Ulbricht's arrest was 614,305 bitcoins? Page 815 MR. TURNER: Your Honor, object. Again, a foundation and also beyond the scope of redirect. THE COURT: I'll allow this one because we're into it just to finish it off. You may answer. A. It does reflect that, yes. Q. And that would be -- and at the time of Mr. Ulbricht's arrest, the government put the total revenue of Silk Road at $1.2 billion, right, in current -- in the value of bitcoin at the time of his arrest, right? MR. TURNER: Objection; foundation, relevance and beyond the scope of redirect. THE COURT: All three of those are true. Why don't you try it a different way -- Q. The government -- THE COURT: -- with this witness. MR. DRATEL: Sure. Q. The government was looking to estimate or get a handle on the revenue that Silk Road had earned during the period of time from the beginning of its existence through Mr. Ulbricht's arrest, correct? THE COURT: Let me ask it this way: I want to see whether or not this is the right witness for this. Were you involved in the efforts by the government to calculate the total number of transactions on Silk Road? Page 816 THE WITNESS: No, I was not. THE COURT: Were you involved in any efforts by the government to calculate not only the number of transactions, but any corresponding value in terms of bitcoins or U.S. Dollars at any particular point in time? THE WITNESS: No, I was not. THE COURT: I think you'll need another witness for these questions. MR. DRATEL: I have nothing further. THE COURT: All right. Thank you. Mr. Turner, are we okay or do we need a break? Let me take a look at the jury. We're all right. Let's continue. Thank you. This will be the end of this witness. I think we're almost done. We'll see how this goes. There's always a bit of back and forth, but I think we're close. MR. TURNER: Mr. Evert, if you can put GX 134 back on the screen. The passport, can you zoom in on the bottom dates there. REDIRECT EXAMINATION MR. TURNER Q. The date of issue on the passport is what, Agent Der-Yeghiayan? A. The date that the government issued that document. Q. Right. But what does it appear here? A. April 26, 2012. Page 817 Q. Any trips that the defendant took before this date, there are not going to be stamps on the passport, right? A. Not on this passport, no. Q. KalyHost. In terms of monitoring or collecting information about its customers, when you registered a website on KalyHost, you didn't have to verify your information, correct? A. No, I did not. Q. And in terms of their ability to see what IP addresses you're logging in from, if you're coming in through Tor, can they see your true IP address? A. They would see the Tor exit node. Q. Can they see your true IP address? A. No. Q. Mises.org, you said is a libertarian website, right? A. Yes, it is. Q. And it's a particular brand of libertarianism, is that right? A. I believe so, yes. MR. DRATEL: Objection. THE COURT: There's very little you can do on this. I'll allow one more question on it. Q. You looked at posts on mises.org, right? A. I did. Q. Were there terms that were commonly discussed on the website? Page 818 A. There were commonalities, I mean, the way the people spoke on there. Q. Did they speak about agorism? A. They did. Q. And you mentioned some names. Samuel Konkin and Murray Rothbard, did those names come up? A. Yes, they did. Q. Not just on the liberty whatever it is you were looking at, but across the site, is that right? A. It was not just on Liberty Student's account. It was across the site. Q. Users of that site generally were interested in those concepts and authors? A. There was discussions about those authors, yes. Q. Did you find any profile in liberty reserve -- excuse me -- any profile on mises.org in the defendant's name? A. I did. Q. With the defendant's picture on it? A. I did. Q. Did you find a profile of the defendant on YouTube? A. I did. Q. With the defendant's name on it? A. I did. Q. And the defendant's picture on it? A. Yes. Page 819 Q. Did you see the subscriptions on the YouTube page? A. I did. Q. Did they include any subscriptions to mises.org? A. Yes, there were. MR. TURNER: No further questions. THE COURT: Thank you. MR. DRATEL: A couple, your Honor just based on that, based on that. THE COURT: My goodness. Okay. Just two or three. MR. DRATEL: Yes. RECROSS EXAMINATION MR. DRATEL Q. With respect to travel, your records go back before April 2012 with that passport, right, your database goes back much further than that, right? A. Not on that particular passport -- Q. Not the passport. For Mr. Ulbricht, when you looked at the database for travel in and out of the United States, it's not limited to the time of that passport? A. No, it's not. Q. It goes well before that, correct? A. The travel history is not based on the passport. Q. And with respect to -- THE COURT: That was two. MR. DRATEL: I'm sorry? Page 820 THE COURT: I was counting. That was two. You get two more. Q. Mr. Ulbricht had his accounts on mises.org and YouTube in his own name, right? A. He did. Q. Mr. Athavale, you associated him with an alias, correct? MR. TURNER: Objection. THE COURT: Sustained. Q. And you said the commonalities that you found with respect to the mises.org posts of Liberty Student and DPR you sent to a college professor for analysis, right? MR. TURNER: Objection; asked and answered and relevance. THE COURT: It's been asked and answered. You can answer it again. A. It was analyzed; yes. THE COURT: We're all set. You're all done, Mr. Dratel? MR. DRATEL: Yes. Thank you. THE COURT: Thank you. You may step down, sir. THE WITNESS: Thank you. *(Witness excused)* THE COURT: We're going to go on to your next witness, ladies and gentlemen. And maybe this is a good time, just because we're at the next witness, to take a quick break. Let's not take a long break. Come back in. Just to stretch our legs. We'll get the next witness already on the stand just to save some time and we'll start right up. So it's just a five-minute, seven-minute break as quickly as we can get out and get back in. Page 821 *(Jury excused)* *(Continued on next page)* Page 822 *(In open court)* THE COURT: This was to take a quick break before we get the next witness out. If we can get him or her on the stand. Is it still Mr. Kiernan? MR. TURNER: Yes. THE COURT: All right. Is there anything you folks want to raise? I want to take a quick break. MR. TURNER: An issue to flag: We want a jury instruction about this Anand Athavale thing, that the testimony about the mises.org cannot come in in order to prove that Anand Athavale was an alternative perpetrator. No link was made in any authentic way. THE COURT: Why don't you do this: If you are asking for an instruction, draft up something, share it with Mr. Dratel. If you can't come to any agreement, you'll present that to me without agreement. And if you can, then I would consider what you folks prepare, but the request is noted. MR. TURNER: Thank you. MR. DRATEL: Just one other thing, 151 we never received until this morning. We keep getting exhibits on the fly, and I just wish that we could have a stationary target to prepare from. That's all I'm asking. THE COURT: It was, I think, in the nature of rebuttal. MR. DRATEL: We got it when he testified. Page 823 THE COURT: Sometimes they're hard to get in advance. MR. DRATEL: I literally got it handed to me during the examination. MR. TURNER: As I received it. THE COURT: Do the best you can. I expect you'll do the best you can. Let's take a quick break. *(Recess)* *(Continued on next page)* Page 824 *(In open court; jury present)* THE COURT: Mr. Kiernan, I'm going to ask you to remain standing and I'll have my deputy swear you in. *(Witness sworn)* THE COURT: Thank you, Mr. Kiernan. Please be seated, sir. THE WITNESS: Thank you. THE COURT: There's water there and I see you have a bottle of water also on the side. It will be important for you to pull yourself up to the mic. and speak clearly and directly into the mic. Mr. Howard. THOMAS KIERNAN, called as a witness by the Government, having been duly sworn, testified as follows: DIRECT EXAMINATION MR. HOWARD Q. Good morning. A. Good morning. Q. Who do you work for? A. The FBI, the Federal Bureau of Investigations. Q. And how long have you worked with the FBI? A. Twenty-three years. Q. And what is your position at the FBI? A. I'm currently a computer scientist with the FBI. Page 825 Q. What are your duties and responsibilities as a computer scientist? A. Sure. I collect, review and analyze digital evidence. Q. Are you familiar with what a forensic image is? A. I am. Q. And what is a forensic image? A. It's a image of a hard drive or a digital media that makes an exact duplicate of the original drive that you are looking at, so you're making a copy of someone else's drive basically. Q. In your role as a computer scientist at the FBI, do you have experience in reviewing the forensic images of computers? A. Yes. Q. In the course of your career, how many forensic images of computers would you say you have examined in total approximately? A. Hundreds of computers that we have gone through. *(Continued on next page)* Page 826 Q. Do you have any specialized training with computers? A. Yes. I'm a FBI -- I am a CART technician, which is a Computer Analyst Response Team, which I have training in also. Q. And what is your educational background? A. I have a computer science degree from St. John's University. Q. I am going to draw your attention to October 1, 2013. A. Sure. Q. Were you involved in an arrest that day? A. I was. Q. And whose arrest was that? A. The defendant, Ross Ulbricht. Q. Do you see that person in the courtroom today? A. I do. He is at the second table wearing the pink-collared shirt. MR. HOWARD: May the record please reflect that the witness has identified the defendant? THE COURT: So reflected. Q. Now, in what city did this arrest take place? A. This was in San Francisco. Q. And what part of day did this take place? A. Afternoon, approximately 3:15. Q. When did you first arrive in San Francisco for the arrest? A. For the arrest, I was there two days prior to the arrest. Q. And what were you involved in in the days leading up to the arrest? Page 827 A. I had helped out with some of the surveillance that was going on during that time period. Q. And what was the initial plan for the defendant's arrest? A. The initial arrest was going to be on October 2nd, which is at his residence, but it was on this -- it was geared to the 2nd of October. Q. And did that plan, did it go as planned? A. No, it did not. Q. And why not? A. We had the opportunity to arrest the defendant with his laptop and his laptop on at the time. Q. And what was the importance of arresting the defendant with his laptop on? A. So with the laptop on we can beat or get past any type of encryption problems that would arise on a laptop. Usually -- encryption is when you have your laptop, or a hard drive, and the data on top of it is in a format that is not humanly readable that we can't get to. So to get there with the laptop on and at a point where it is on, we were able to get the machine and pull up live data from the machine. Q. Now, were there other people involved in the arrest team? A. Yes. Q. Where was the arrest team deployed on October the 1st? A. On the 1st we were situated all around the area at the time, all in a -- in plainclothes, just trying to blend in with the surroundings. Page 828 Q. And what location were you in? Where were you? A. I was -- myself, I was across the street from the library, from a little cafe and back from the library spot, but right across the street from the library. Q. And why were you in that specific location? A. We had witnessed the defendant in that area before, a couple of days before that, when we were there doing surveillance. So we knew he was in that area, or we were hoping that he would come back to that area. Q. Do you know where Mr. Ulbricht was living at the time? A. Yes, I do. Q. And how do you know that? A. We had done surveillance in front of his residence. Q. And approximately how close was his residence from the place where you were stationed near the public library? A. Maybe a five-minute walk from his spot down to the cafe and the library. Q. At some point did you learn that Mr. Ulbricht was approaching the area? A. We did. MR. HOWARD: Now, Ms. Rosen, could you please publish Government Exhibit 128C, which has already been admitted into evidence. Page 829 Q. Do you recognize what this photograph depicts? A. I do. Q. And what does it depict? A. That is the area where we were actually sitting before we entered the library. I could use my pointer, right? Q. Go ahead, Mr. Kiernan. A. Here we go. So this area here, this cafe area, we were directly across the street, on this side of the street, from there, just sitting on a bench, me and the UC at the time, Jared -- I can never pronounce his last name but it was Jared. The library was right over here, where we were waiting to enter into. Q. Now, sorry, you were sitting with Special Agent Jared Der-Yeghiayan, correct? A. Yes. Q. Were there other agents involved, too? A. Not where we were sitting but in the area, yes, there were other agents in that area. Q. And they were also in plainclothes? A. Yes. Q. So at some point did you observe the defendant when you were at this location? A. I did. I did. I just saw him take a -- when he was walking on this side of the street, he took a quick peek in that little doorway there, which seemed like a coffee cafe, and then he just continued on past this area right into the library right there. Page 830 Q. Now, after you witnessed the defendant enter the library, did you see the undercover officer do anything? A. He just opened up his laptop to start a session, I guess. Q. And what was the plan for the undercover opening his laptop? A. To try to get into a conversation with DPR. Q. What did you do next? A. That's when I left my area and entered into the library, just across the street. Q. And once you entered the library, where did you go? A. The library was two -- it was a couple, it was two floors -- well, the library itself, the entranceway and then I went up to the second floor, where the actual entrance to the main library section was. Q. Now, I'm going to ask you to flip in the binder that is sitting in front of you to what's been marked for identification purposes as Government Exhibit 128G. A. Got you. Q. Do you recognize this? A. I do. Q. What is this exhibit? A. This is a photograph of that second floor entrance into the library. Page 831 Q. Did you take this photograph? A. I did not take this. THE COURT: May I pause for one second? I think that my binders have taken a walk, and they will walk back. *(Pause)* OK. So what number are you on, Mr. Howard? MR. HOWARD: 128G. THE COURT: Thank you, sir. You may continue. MR. HOWARD Q. Is it correct, you just testified that you did not personally take this photograph, correct? A. No, I did not take this photo. Q. But does this photograph fairly and accurately depict the area of the library that you just described? A. Yes, it does. MR. HOWARD: The government offers Government Exhibit 128G. MR. DRATEL: I have no objection, your Honor. THE COURT: Received. *(Government's Exhibit 128G received in evidence)* MR. HOWARD: Could you please publish it on the screen. Q. So you described it as the area of the library that you first went to after you entered, correct? Page 832 A. Yes. Q. Was there anyone else with you while you were at this location? A. Not with me going in but inside there were some agents already stationed. Q. Could you depict where in the photograph this was? A. Sure. Right back in here, just behind this pole, basically in front of this little terminal there. Q. Once you arrived at that location, did you meet with the other agents? A. We did, yes. Q. And what happened during that meeting? A. During that -- it was a pretty quick meeting, but we were trying to come up with a way to have the defendant turn away from his laptop. So he was sitting inside. So we were trying get him -- a diversion. We were trying to create a diversion so we could grab the laptop, take it, and start processing it, start looking at it. Q. This is to obtain the laptop in an unencrypted state, correct? A. Correct. Yes. Again, the goal was to get to the laptop in its unencrypted state. We wanted to look at that laptop. Q. Did you have a search warrant for the defendant's laptop at the time? A. We did. Page 833 Q. Can you please flip to what's been marked for identification purposes as 128H in your binder. A. Yes. OK. Q. Do you recognize this exhibit? A. I do. Q. And what is it? A. A picture internal of the library approximately where the defendant was sitting. Q. Did you take this photograph? A. I did not. Q. Does the photograph fairly and accurately depict the area that you just testified about in the library? A. It does. MR. HOWARD: The government offers Government Exhibit 128H. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 128H received in evidence)* MR. HOWARD Q. Mr. Kiernan, you described this as the area that you first observed the defendant in the library, correct? A. It is, yes. Q. Can you describe where in this photograph you observed the defendant? A. Sure. I was situated to the left over here. You see this pole standing there? I was in that area behind the case of books or magazines in that area. About 20 feet away, something like that. Page 834 Q. And where was the defendant specifically located? A. He was approximately in this area here, almost in this same spot as that gentleman in there, in that picture. Q. What were you able to observe about the defendant before he was arrested? A. Just that he was using his -- his laptop was on and he was using his machine, just sitting there. Q. What did you see next? A. I saw two agents come from this area here, walking this way. I mean, towards the windows, right, would be better, toward that "Science Fiction" sign there. And I witnessed them. They tried to do our plan that they were talking about. So they get into a verbal dispute. They start, the male and the female agent, like a domestic dispute, and they started yelling at each other right behind the defendant's area. Q. And so what happened after they started yelling behind the defendant? A. Sure. The defendant, like anyone would do, would look like what's going on. And that's when the male agent reached, grabbed the laptop, pulled it over to the side. The defendant started to rise, as anyone would do. Then the female agent grabbed it from the male agent, and that's when I came from my position and took the laptop from the female agent. Page 835 MR. HOWARD: Your Honor, may I approach the witness? THE COURT: You may. Q. I just handed you what's premarked for identification purposes as Government Exhibit 200. Do you recognize this exhibit? A. Can I open it? Q. Go ahead. *(Pause)* A. Maybe I can't. It is not going back in the bag, that's for sure. All right. Let's see. Got it. OK. Yes. Q. Do you recognize this exhibit? A. I do. Q. And what is this exhibit? A. This was the laptop taken from the defendant. Q. And how do you recognize it? A. From the serial number and bar code and the paper with it. MR. HOWARD: The government offers Government Exhibit 200. MR. DRATEL: No objection, your Honor. THE COURT: Received. *(Government's Exhibit 200 received in evidence)* MR. HOWARD Page 836 Q. What brand of laptop is this? A. This is a Samsung 700Z. Q. And when you say "700Z," what are you referring to? A. That is the model number of the laptop. Q. Now, what did you do with Mr. Ulbricht's laptop after you seized it? A. After I grabbed it I went to the other side of the table, where the arrest was made, and started a triage on the laptop. Q. So what is a triage? A. A triage is, again, looking for if encryption is running on the machine. So I start looking for signs of that, and then I start taking pictures of what I'm doing at the time. It is just I'm going through the computer in as safe a way as possible to start collecting evidence from the machine. Q. And why was it necessary to do this triage? A. Again, the encryption is tough, it is tough to defeat. So the triage is, again, to make sure that I can start getting valuable evidence from the machine in its live state, while the machine is on. Q. How can a laptop become locked or encrypted? A. Sure. By the closing of the lid will usually enable encryption. Screen savers, little programs that lock it out. Things like that will enable encryption on the machine if it is running. Q. Does every laptop have encryption running on it? Page 837 A. No, not every laptop. Q. Did you extract any documents as part of the triage? A. Yes, I did. Q. And how did you do this? A. I had a USB drive with me, a brand new USB drive that I plugged into the defendant's laptop and started what I could take documents from his current home directory folder, which is the directly that most of your documents remain in. That is the stuff you use most. That is where you put your documents. MR. DRATEL: Objection. THE COURT: All right. Well, the portion of the answer "stuff you use most" is struck but the remainder of the answer stays. You may continue, Mr. Howard. MR. HOWARD Q. Mr. Kiernan, what kind of operating system was the computer running? A. Linux in a flavor called Ubuntu. Q. What is an operating system? A. It's the software that lets you interface with your computer. It lets a human actually interface with your machine so you can get to your files and your Web browsers and things like that. Q. What are other popular kinds of operating systems? A. Sure. You probably know Windows or Macintosh OS's. Those are other types of operating systems that are out there, popular ones. Page 838 Q. Do you have training in reviewing computers running the Linux Ubuntu system? A. I do. Q. Is the home directory you testified about part of the Linux Ubuntu system? A. It is. Q. And how many computers have you reviewed that have had the Linux Ubuntu system on it? A. Hundreds of computers. THE COURT: How do you spell the Ubuntu? MR. HOWARD: I believe that is you U-b -- THE WITNESS: U-b-u-n-t-u. THE COURT: All right. Thank you. MR. HOWARD Q. And what is the significance of the home directory, that you testified about, on a Linux Ubuntu system? A. It's the directory where you keep most of your files. That's the directory that holds your data. And it holds the user accounts is in the home directory of the Linux system. Q. What is a user account? A. A user account is an account that is created by usually the person setting up the laptop to give yourself access to the machine, to the parts of the machine that you would use. So it is that part of the machine. Page 839 Q. And how are user accounts labeled? A. The name that you give it, the name that you send to that account. Q. In other words, the user can choose any name they want, correct? A. Correct, yes. Q. Now, what, if anything, did you do to document what you were doing while you were performing what you were calling the triage of the laptop? A. Sure. I was taking pictures of what I was doing with a BlackBerry, my BlackBerry FBI-issued phone. Q. And why were you using a BlackBerry? A. Ah, that's what I had with me at the time. That's what I received. Q. Now, if you could please flip in your binder to what has been marked for identification purposes as Government Exhibit 201A. A. Sure. *(Pause)* Q. Do you recognize this exhibit? A. One second. Sorry. *(Pause)* Yes, I do. Q. And what is this exhibit? Page 840 A. This is a photograph of the defendant's computer at the time of the arrest, or the time that I had it. Q. Did you take this photograph? A. Yes, I did. Q. And how soon after obtaining the laptop did you take this picture? A. Right after. MR. HOWARD: The government offers Government Exhibit 201A. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 201A received in evidence)* MR. HOWARD Q. So, Mr. Kiernan, is it your testimony that this is the first photograph you took of the defendant's laptop? A. Yes. Q. Did you do anything to the laptop, click on any windows, do anything at all before you took this picture? A. Ah, no. No. MR. HOWARD: If we could please just zoom into this window right here, Ms. Rosen. Q. Can you describe what this window contains? A. Sure, except for that big flash I had there when I first started taking the pictures. That's the Pidgin chat client, the Pidgin chat program that allows communications between individuals, and this is a chat with the username Cirrus. Page 841 Q. Do you recognize the username Cirrus? A. I do. Q. And how do you recognize it? A. That's the account that our undercover was using. MR. HOWARD: Now, if you could, Ms. Rosen, if you could just zoom in on the upper left-hand corner of the screen. Q. Here it says "Ubuntu desk-top." What does that mean? A. That was the software -- the operating system that was running on the defendant's computer. Q. Now, does Government Exhibit 201A indicate -- anywhere indicate the time that the photograph was taken? A. Yes, it does, on the second page. MR. HOWARD: Ms. Rosen, could we please flip to the second page and zoom in on the upper right-hand corner. Q. Here it says, "Properties." What is the information that's depicted here? A. Sure. That's metadata that comes with files. So the picture is part of your file that you look at. This metadata is sometimes -- not "sometimes," it is embedded within these files. So this is just the date and times of the times that I took the pictures. Q. So let's first look down here at the bottom where it says "Camera Properties." A. Sure. Page 842 Q. "Camera model: BlackBerry 9930." What is BlackBerry 9930? A. That is my phone. Q. And below that it says, "Date Taken, October 1, 2013, 6:15:56 p.m." A. Yes. Q. What does that refer to? A. That's the time I took the picture in Eastern Time. Q. And why is it reflected in Eastern Time? A. That is what my phone settings were at. Q. And what time zone is San Francisco in? A. Pacific. Q. And at that time how many hours back was it? A. Three. Q. If you look up here under "Picture Properties," there is a line that says, "Modified: October 1, 2013, 3:15:56 p.m." What does that reflect? A. That the converted time from Eastern to PST, minus the three hours. We just took the three hours off. That is what it looks like. Q. Now, Mr. Kiernan, could you just take a moment and flip through your binder of what's been marked for identification purposes as Government Exhibits 201B through 201G, and let me know when you are ready. A. OK. B through G? Page 843 Q. B through G. A. Got you. *(Pause)* OK. Q. Sir, do you recognize what all of these exhibits are? A. Yes. Q. What are they, generally? A. Photos that I took of the defendant's laptop at the time of the arrest. Q. Did you take these photographs? A. I did, yes. Q. Now, as with Government Exhibit 201A, is the time of each photo reflected in the metadata on the second page of each exhibit? A. Yes, it is. Q. And for each one under "camera properties," is the time reflected in Eastern Time rather than Pacific Time? A. It is, yes. MR. HOWARD: The government offers Government Exhibits 201B through 201G. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibits 201B through G received in evidence)* MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201C, please. Page 844 Q. Now, Mr. Kiernan, what time was this photograph taken local time? A. 3:17 p.m. Q. And earlier you testified that the defendant got arrested at about 3:15, correct? A. About, yep. MR. HOWARD: Ms. Rosen, if we could just zoom in on the top bar here, please. Q. Here it says, "Tuesday, October 1, 3:17 p.m." What does this mean? A. The date and time that the computer had on it when it was running. So the time stamp of the computer. Q. And right to the right here, there is the word "frosty" next to a little white picture. Now it is yellow after the highlighting. A. That was the username that was logged in at the time. Q. And is this the username that you were talking about before on the Ubuntu system? A. Yes, the created username, correct. Q. And who's username? A. Frosty, the defendant. That's his username that he created for that. MR. DRATEL: Objection. Q. What user account was the defendant logged into at the time that you took this computer? Page 845 A. The Frosty account. MR. HOWARD: Could you please zoom out, Ms. Rosen, and zoom in on this window right here. Q. What is this window? A. That is a picture of the active buddy list, again, from that Pidgin client that -- from the other pictures which were the actual conversations, there is a buddy list from that same program that shows you contacts that -- your contacts that you use on the chat. Q. Right here, what is the first contact on the buddy list? A. Cirrus. Q. And the second one right under here? A. Inigo. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201D. Now, if you could zoom in on this window that starts up here. Q. What is this window on defendant's computer? A. This is a browser window pulled up to the foreground. So it is a browser window of a website. Q. And what kind of browser was this? A. This was the Tor browser. Q. If you could just look up here, it says, "Support Tor Browser" on the top. Page 846 What is a Tor browser, Mr. Kiernan? A. It is a browser, the same as your regular browser, basically, except you are connecting through the Tor network to sites that aren't available to your regular browser. It is a program that allows you to view those things. Q. Was this Tor browser running when you arrested -- sorry, when you seized the defendant's computer? A. Yes, it was. Q. Now, if you could just zoom in here on the little tab here. Here it says "Support" and a little thing to the left of it. What is that? A. That is the -- it is the support page of the Silk Road server, and to the left is the Silk Road icon, the logo associated with Silk Road, a man on a camel. Q. And right here, this white box here, what is that white box? A. That's the URL, the page that is actually visited on your browser that was present -- that it was looking at at the time. Q. So turn to the first part of the address, silkroadvb5piz3r.onion, are you familiar with that address? A. I am. Q. And what is that address? A. That is the address of the Silk Road server. Q. And right here it says dot-onion. What does dot-onion mean? Page 847 A. Dot-onion is how you route to a -- or how you get to sites on Tor, dot-onion Tor sites, as opposed to the sites that you are usually used to going to, like a dot-com or dot-edu, not that you can't get to them through the Tor browser but the dot-onion is a special category on the Tor network that you can get to through the Tor browser. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201G, please. Q. And, Mr. Kiernan, what is this window here, the white window? A. That is a picture, again, of the full buddy list that was running on the computer at the time. Q. You had taken photographs by this point, correct? A. At this point, yes, I was. Q. What is the white window here? A. Yes. Again, that is the buddy list from that Pidgin software. Q. So, again, we have cirrus and inigo and also later on the list we have mg and smed? THE COURT: Is that right? A. That is correct, yes. MR. HOWARD: Now, Ms. Rosen, could you please publish Government Exhibit 201J. Q. And what is this window, Mr. Kiernan? A. This was the bottom of that buddy list that you just saw. Page 848 Q. I direct your attention to the little icon here on the bottom right-hand corner. Do you recognize what that is? A. I do. That's the logo associated with or the avatar associated with the user account Dread Pirate Roberts on the Silk Road site. Q. Up here there is a little what appears to be some sort of stop sign or some sort of traffic sign? A. Yep. Q. Then next to it is "dread@pl5mmj2ron" and I can't tell, that looks like h-u-t-y, a bunch of characters, dot-onion? A. Yes. Q. Do you recognize what this is? A. Yes. That's the account of the -- that is the Pidgin account to log into the Pidgin client. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201D to the jury. Q. Earlier you testified this is the Tor browser, correct? A. Correct. Q. What, if anything, did you do to look at what other Web pages had been visited previously by the user of this computer? A. Sure. I used the Tor's -- the Tor's, the browser's back button to go back. Q. Could you indicate where the back button is? A. Sure. It's right under the word "Support" with the little icon and the arrow facing to the left. Page 849 Q. And what does clicking on the back button do? A. It brings you to one page before the one that you are currently on. It brings you back one page in your browser. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201K. Q. And so what does this depict, Mr. Kiernan? A. This is the result of clicking that back button, bringing you to the one page before. MR. HOWARD: Ms. Rosen, if you just again zoom in on the URL bar at the top. Q. So here at the beginning it says "silkroadvb5piz3r.onion." Is that the same Silk Road address you testified about earlier? A. Yes. Q. Here at the end it says "slash support." What does that mean at the end of an address? A. That is the page that you are actually on, the actual -- it is the page that you are on. Q. And who picks the name of the page? A. The person designing the website. Q. Did you click on the back button again? A. I did. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201L. Q. Mr. Kiernan, do you recognize what this depicts? A. I do. Page 850 Q. And what is this? A. This, again, is the previous page to the one we saw before. This is the mastermind page of the Silk Road site. Q. And why do you call it the mastermind page? A. I am just going by the name that it is called on the site itself. MR. HOWARD: Ms. Rosen, could you zoom in on the top, please. Q. So here at the end of the address it says slash mastermind; is that what you are referring to? A. That is, yes. Q. Again, this would have been chosen by the designer of the site, is that correct? A. Yes. MR. HOWARD: If you could zoom out for a second? And zoom in on this fifth row right here. Q. Here it says "cold BTC" and below it "144,336.40," correct? A. Correct. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 201M, please. Q. And what does Government Exhibit 201M depict? A. Again, this is the -- hitting the previous button, this is one page before the mastermind page. MR. HOWARD: So let's zoom in on the top of the URL bar on the top of the page, please, Ms. Rosen. Page 851 Q. And here at the beginning is the same Silk Road address that you testified about earlier? A. It is, yes. Q. And what is the name of this page? A. Landing. Q. And down here in this box, what does it say? A. Dread Pirate Roberts. Q. And what does this indicate? A. This was the login name associated with -- the login name used to get to those other pages that you saw before, the mastermind, the support page, all of those pages there. Q. Now, approximately how long did you spend with the laptop in the library performing this triage? A. The whole time, for about three hours. Q. What did you do with the laptop after you completed the triage? A. I gave it over to RCFL, which is a computer team out in San Francisco. The agent's name was Beeson, Chris. Q. So let's take a step back for a second. After you were done with the laptop in the library, what did you do next with the laptop? A. We transported it back to the defendant's residence. Q. And at what point did you provide it to Special Agent Beeson? A. After we were back at the residence, we gave it back to Special Agent Beeson. I gave it to Beeson. Page 852 Q. Did there later come a time that you had access to the contents of the laptop again? A. Yes. Q. And how did that occur? A. That occurred -- after they imaged the drive or made a duplicate of the drive, we got a copy -- we got that copy back to us in New York. Q. And in what format did you get the copy of the hard drive? A. It came on a hard drive. It was a digital -- a forensic image of the defendant's computer that came on a hard drive back to us. MR. HOWARD: Your Honor, may I approach the witness? THE COURT: You may. *(Handing)* THE WITNESS: Thank you. Q. So I just handed you what's been marked for identification purposes as Government Exhibit 500. Do you recognize this? A. Yes. Q. And what is this? A. This is the result of the images taken by Chris Beeson that we got back to us in New York. Q. And how do you recognize it? A. Again, by the serial number on it and the serial number bar codes that match on this. Page 853 MR. HOWARD: The government offers Government Exhibit 500. MR. DRATEL: Your Honor, I think that has to be subject to connection. THE COURT: Let me ask, that is the hard drive that you understand was provided to you from Beeson? THE WITNESS: Correct. THE COURT: All right. All right. It is received. *(Government's Exhibit 500 received in evidence)* MR. HOWARD Q. Now, what did you do after obtaining this hard drive? A. After obtaining this hard drive, I made a staging copy of it. So what I do is I take the drive from Beeson that has the image on it. I plug this into a write locker, just a device, a piece of hardware that connects to the hard drive. And I take the images that were there and I copied them to a drive, or a NAS drive that I have with me. Q. So you create a staging -- what is a staging copy? A. A staging copy. It is a copy that I can work on without working on this one. Q. And you indicated that you plugged it into a write locker. What is a write locker? A. A write locker just takes -- makes this so I cannot write anything to it. Even with the format it is in, the images -- I don't want to write anything to the hard drive, basically. Page 854 Q. Was the working copy the same as the original? A. Yes, it was. Q. And how do you know that? A. I performed an MD5 Hash on my copy that I made. And an MD5 Hash is just a digital fingerprint of the files that I received. And I performed one on what I got from Beeson, and I do my own, just make sure that those match, and I know I'm working on a good copy of the data. That's all. Q. So you are doing a comparison of the hash values to show that they match and they show that they are the same copy? A. Correct. Q. Please flip to what has been marked as Government Exhibit 200A, please. A. Sure. I am running out of room up here. Q. Mr. Kiernan, would it be helpful if I remove the laptop? A. Please. I don't want it to wind up on the floor. MR. HOWARD: May I approach, your Honor? THE COURT: You may. *(Pause)* Q. Do you recognize what Government Exhibit 200A is? A. I do. Q. And what is it? A. A screenshot I took of the MD5 Hashes. Page 855 Q. You said you took this screenshot, correct? A. Yes. I'm sorry. A screenshot I took. MR. HOWARD: The government offers Government Exhibit 200A. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 200A received in evidence)* MR. HOWARD: Ms. Rosen, if you would publish 200A, please. Q. So here it says, "MD5 Hash, Computed hash" and a long string of characters that start with a 1e61. A. Yes. MR. HOWARD: If you could zoom in on that. Q. What is this? A. That is the result of the mathematical -- the equation of the program run on the imaged drive that make that hash, make that value. Q. This was the value that you compared with the value of the file from Special Agent Beeson? A. Correct. Right. THE COURT: Wait. Q. Down here it says January 5, 2015. THE COURT: Wait a second. I want to make sure that I understand what the two things are that are being compared. So there is the hard drive that you received from Beeson? Page 856 THE WITNESS: Right, which had the -- I'm sorry. THE COURT: Which had had the image? THE WITNESS: Right. It had a hash on it, too, but it is the actual hash from the defendant's laptop when they made that image. THE COURT: OK. So when there was an initial image made on the defendant's laptop that Mr. Howard just took back from you and on the hard drive on the laptop, did it have a hash there? THE WITNESS: Yes. THE COURT: Was there a hash there? THE WITNESS: Yes. That is what I am comparing it to. THE COURT: So you are measuring the hash on the laptop to the hash on the Beeson drive? THE WITNESS: Right, that is coming back. THE COURT: All right. I am with you now. MR. DRATEL Q. To be clear, this hash, is this hash of the Beeson drive or it's a hash of the staging copy that you made? A. Both, yeah. So when they perform the image, right, when they said sda4_crypt.dd, that is the name of the file that was made by Beeson from the laptop. All right? That gets put on the drive here, this one. And when I look at it, I compare that hash value with the one that is here, which is the image of the drive from the defendant. Page 857 THE COURT: I see. THE WITNESS: That is all. Q. Just real quickly, at the bottom here, on the bottom right, it says January 5, 2015. A. Mm-hmm. Q. That is the date that you took the screenshot? A. Yes. Q. This was after you performed the analysis of the hard drive? A. Yes. Q. Now, what would have happened if one file had gotten changed during your analysis of the laptop? A. Those MD5s change. They would be different. Q. They would no longer be a match? A. Right. The fingerprints wouldn't match. Q. So after you received the image and made a staging copy, what, if anything, did you do to analyze the contents of the laptop? A. I mounted the image, the DD file, using a tool called FTK Imager. Q. What does it mean to mount the image? A. You see, it's one file right now. When you mount an image, when you -- you take that file and you put it back into the contents over there, the file system comes back up. So you can actually read what was on that drive at the time. You can read the files on it. Page 858 Q. And what kind of software did you use to read the files that were in the image? A. That was the FTK Imager software. Q. Do you have any training using FTK Imager? A. Yes. Q. Approximately how many computers have you analyzed using FTK Imager? A. Hundreds. Q. Mr. Kiernan, if you could take a moment and flip in your binder to what has been marked for identification purposes as Government Exhibits 211 through 216. A. OK. Q. Do you recognize what these are? A. Yes. Q. And what are they? A. These are screenshots of FTK Imager and some of the results. Q. Who took those screenshots? A. I did. MR. HOWARD: The government offers Government Exhibits 211 through 216. MR. DRATEL: No objection. THE COURT: Received. Page 859 *(Government's Exhibits 211 through 216 received in evidence)* MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 211, and if you could zoom in on the left. Q. What does this left -- upper left-hand corner window represent? A. Sure. So that's the file structure from the defendant's laptop. MR. HOWARD: Could we just zoom in on that window. Q. Right here at the top it says "sda4_crypt.dd." What is that? A. That is the file created during that image. That is the file that gets created during the imaging of the drive. Q. And below here we have all of these little folders with names by them. What are these? A. So that's your file structure, your directory, kind of like a filing cabinet that you have at your house where you put all your different files into them. So each drawer is a different folder. And then under that you could have more folders and so on and so on to get to -- Q. I'm sorry. I didn't mean to cut you off. A. That's OK. Q. If you could zoom in down here where the folder is labeled "home." A. Sure. Page 860 Q. And "frosty." This is the home directly on Ubuntu Linux system that you testified about earlier? A. It is. Q. And what does the home directly contain on the Ubuntu Linux system? A. That contains user accounts. Q. How many user accounts did you find on the defendant's computer? A. Just this one. Q. What was the name of that account? A. Frosty. Q. Did you review the contents of files that you found on the defendant's computer? A. I did. Q. During your review of the defendant's laptop, did you find any photographs of the defendant? A. I did. Q. Can you please take a minute to look at what's been marked for identification purposes as Government Exhibit 273 in your binder. A. Sure. *(Pause)* OK. Q. Do you recognize what this is? A. I do. Page 861 Q. And what is the exhibit? A. It is a file found on the defendant's laptop. Q. And how many pages is this exhibit? A. It is two. Q. What is the second page of the exhibit? A. The second page contains the file structure again and some metadata associated with where I found the file. Q. By the way, are there other files that you extracted from the laptop other than this? A. Yes, there are. Q. And for every file that you extracted, did you also include a screenshot of where it was located and its metadata, as you described? A. I did. MR. HOWARD: The government offers Government Exhibit 273. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 273 received in evidence)* MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 273. Zoom in on the top. Q. Mr. Kiernan, is this the contents of the file you just testified about? A. Yes, it is. Q. It says, "Ulbricht, Ross William." It is a passport. Page 862 Can we go to the second page, please. Now, this is the screenshot from FTK Imager, is that correct? A. Yes. Q. And so what is depicted along the very bottom? If you could zoom into this. What does "home/frosty/documents/ archive/documents/reference/ids.jpg mean? A. That is the folder structure or where the file actually was contained on the drive, like what you saw before. MR. HOWARD: Could you zoom out, Ms. Rosen. Q. And what is this window right here on the lower left-hand corner? A. That is the metadata or the data which is describing what that file actually is. Q. Now, are you familiar with metadata on the Ubuntu Linux operating system? A. I am. Q. So, first, I want to draw your attention to the "Date Modified" field, January 5, 2007. What does the date modified field mean? A. The date that it was modified, or changed, or made a change to it. Q. So how could, let's say, a document be modified? A. Going into a document, adding something to a document, removing something from a document, that will change the date modified. Page 863 Q. So this represents the last date that the file was changed, is that correct? A. Yes. Q. Right above that, we have a field called "Date Created." What does date created refer to? A. That's the time or the date that the file was actually put on that machine or that volume, that computer. Q. Does this field refer to the date that the file was created -- first created anywhere? A. No, not a born date but when it is on that machine. Q. So here to the right we see a date of May 8, 2012. A. Correct. Q. That is the date created, correct? A. Correct. Q. Now, in this instance the date created is after the date modified? A. Correct. Q. So what does that indicate to you, Mr. Kiernan? A. That the files were put there at a different time. That is all. They were probably copied over or moved over -- MR. DRATEL: Objection. A. -- or backed up. They were copied over -- MR. DRATEL: Objection. THE COURT: I will allow it. Page 864 A. They were just moved at a different time. Q. Does this indicate to you whether or not this file was first created on this computer? MR. DRATEL: Objection. THE COURT: Based upon your experience, what does that information indicate to you? THE WITNESS: That it was just on a different machine or a drive at a different time and put here later on. Q. Now, this date created of May 8, 2012, is this the only file you found on defendant's computer with a date created of May 8, 2012, or were there others? A. Oh, there were others. Sure. Q. Approximately how many others? A. Hundreds of them. I mean, there are others there. Probably when that user account was created on the machine. MR. DRATEL: Objection. THE COURT: Overruled. Q. Based on your training and experience, in seeing that many -- that quantity of files with that same date created, what does that indicate to you? MR. DRATEL: Objection. THE COURT: I will allow it. A. I'm sorry. Can you repeat that? Q. From your training and experience -- A. Yes. Page 865 Q. -- based on seeing the large quantity of files with the same date created of May 8, 2012, what did that indicate to you? A. Yeah. The files were moved from either another computer or another piece of media to the machine for later on. Q. What is the "date accessed" field? It says October 2, 2013. A. Just when it was looked at or accessed, touched. Q. That was the day after the defendant's arrest, correct? A. Correct. Q. And why would this date be after the defendant got arrested? A. Because we were doing a live image. The machine is on. So all those files, you know, they unfortunately get -- not "unfortunately." They are just accessed during that time, during that imaging of the machine. The machine is on so we're not turning it off to take it so that gets changed. Q. Does this metadata indicate whether or not the file was changed when it was accessed for the purpose of your image? A. It does not. Q. Does it indicate whether or not the file was changed when it was accessed for the purpose of the image? A. No. Q. Was it changed? A. No. The files weren't changed. Page 866 Q. So, Mr. Kiernan, if you could now flip to Government Exhibit 274 in your binder. A. Sure. Q. Do you recognize what this is? A. I do. Q. And what is it? A. Again, a file taken from the defendant's laptop. Q. And who took it from the defendant's laptop? A. A file that I extracted from the defendant's laptop, yes. MR. HOWARD: The government offers Government Exhibit 274. MR. DRATEL: I have no objection. THE COURT: Received. *(Government's Exhibit 274 received in evidence)* MR. HOWARD: Ms. Rosen, could you please publish it. Q. Did you find any chat logs on the defendant's computer? A. I did. Q. And what is a chat log? A. Depending -- it's a file that records or keeps the conversations between two people. Like if you use your phone, if you go back and check your text messages, the same type of deal. It just puts it into a file, depending on the client that you are using at the time on the machine. Q. And what kind of chat program did you find on the defendant's computer? Page 867 A. I found Tor chat on the defendant's computer. MR. HOWARD: If you could please publish Government Exhibit 215, which is already in evidence. And if we could zoom in on the left, upper left window. Q. Mr. Kiernan, this is the directory structure of the computer again, is that correct? A. Yes, it is. MR. HOWARD: And if we could zoom in on this little area here. Q. Here is a folder that says ".torchat," correct? A. Correct. Q. What is that folder? A. That is the full folder for Tor chat when you load -- when you install Tor chat on your computer. Q. Now, Mr. Kiernan, you testified earlier that when you first got the defendant's computer, you saw a Pidgin chat program window open, is that correct? A. That is correct. Q. Is that a different program than Tor chat? A. Yes, it is. Q. Did you find the Pidgin program also installed on the defendant's computer? A. I did. MR. HOWARD: Now, Ms. Rosen, could you please publish 215 again. Sorry. I had one more question. Page 868 Could we just zoom in on the upper right window. Q. What are these lists on the left side of the window? A. That's the log files associated with Tor chat as it keeps the logs on your computer. *(Continued on next page)* Page 869 Q. And if we can just zoom in on a couple of those. That's good. Here you can see there's a whole bunch of characters followed dot log. What does dot log mean? A. Just the formality or the extension of the file that's there. It's just called dot log in this case. Q. So Mr. Kiernan, what is Tor chat? A. A program, again, to allow you to communicate with other people in a program. It -- it's person to -- it's communication between people on the Tor network as opposed to open network. Q. Have you personally ever used Tor chat? A. I have. Q. Have you tested Tor chat? A. I have. Q. Have you saved the logs of Tor chats on your own computer? A. I have. Q. If you save a Tor chat log to your own computer, how is your part of the conversation labeled? A. The username "myself." Q. And if you save a log of a chat you have on your computer, how is the other side of the conversation labeled? A. With the name given to that other user, your other buddy. Q. And who gives that name to the other user? A. The user of the computer. The user of the Tor chat program. Page 870 THE COURT: Why don't you ask the same question, Mr. Howard, in terms of "myself." I'm unclear whether it's a name you designate for yourself or whether it's an automatic name given. Q. Mr. Kiernan, is "myself" something that you choose for yourself as a user of Tor chat, or is it automatically selected to you by the program? A. The program gives you that user account, the username and the log as "myself." Q. And the name of the other party in the conversation, is that automatically selected for you? A. No. You can assign that a name. Q. Could it be assigned anything the user wants? A. Yes. Q. So, for example, if you're chatting with your mother, you can label it "mom" if you want, right? A. Correct, because the usernames in Tor chat are long, tough-to-read names. You can see, as a matter of fact, from that log file it's the actual name of the user on there. So to make it human-readable, you give it an easier-to-use name like "mom." Q. So if we could please look at Government Exhibit 222 in your binder, please. Do you recognize what this exhibit is? A. I do. Q. What is this exhibit? Page 871 A. This is a log file from that Tor chat directory. Q. This is from the defendant's computer? A. From the defendant's computer; yes. Q. And did you extract this file? A. I did. MR. HOWARD: The government offers Government Exhibit 222. MR. DRATEL: No objection. THE COURT: Received. *(Government's Exhibit 222 received in evidence)* MR. HOWARD: Ms. Rosen, can you please publish Government Exhibit 222, please. Zoom in on the first few lines there. Q. Is this what a Tor chat log looks like, Mr. Kiernan? A. It is. Q. So let me just describe the very top line it says "This log file is not signed and has no cogency of proof." Are you familiar with what that is? A. I am. Q. What is that? A. That's, again, a default setting when the log file starts getting created, it puts that in there. Q. So in other words, all Tor chat log files automatically include that at the top, correct? A. They'll put it in there, yes. Page 872 Q. And you testified that you tested and used Tor chat yourself, right? A. I have. Q. And you've saved your own logs, correct? A. I have. Q. Have the logs been true and accurate copies of the conversations that you logged? A. They have been, yes. Q. Now, if we can just -- I'm going to direct you to the second line here where it says 2012-04-24, 17:06. What does that mean? A. It's the date and time of the chat. Q. So it's April 24, 2012, correct? A. Correct. Q. And what format is the time depicted in? A. It's based on the 24-hour clock. Q. So what time is that in time that we more commonly use? A. 5:06. Q. To the right of there, you see this sSh, it's a lower-case S, big S, little H. What is that? A. That's the name given -- that's the name that was assigned to one of the chat participants. Q. It's the other participant in the chat that was logged, correct? A. Yes. Page 873 Q. And it says "greetings" to the right. What is that? A. That's what was typed in, "Greetings." Q. And the next line next to date and time it says "myself: hi there." A. Yes. Q. What is "myself"? A. "Myself" is the user of the client software on the computer. Q. The user who is logging the files on the computer, correct? A. Yes. Q. Now, Mr. Kiernan, can you please flip to what's been marked for identification purposes as Government Exhibit 22B in your binder. Do you recognize what this is? A. I do. Q. What is this? A. An excerpt from the full chat log. Q. Is that an excerpt of the Tor chat log we just looked at? A. Yes, it is. Q. Did you participate in the creation of this exhibit? A. I did. Q. Is this a true and accurate excerpt from the full Tor chat log? A. Yes. they are. Yes. MR. HOWARD: The government offers Exhibit 222B. MR. DRATEL: No objection. Page 874 THE COURT: Received. *(Government's Exhibit 222B received in evidence)* MR. HOWARD: Ms. Rosen, can we publish this and zoom into the top. Q. Right at the top it has 4XSB, a long list of characters, dot log. What does this refer to? A. That's the log file this was found in. It's the user's Tor name. Q. Is this the name of the file as it was stored on the defendant's computer? A. Yes. Q. And here it says "page 1/5." What does page one of five refer to? A. That's the -- "1" being the page that this was on and "5" is how many pages were in the whole chat. Q. So this indicates, in other words, that this is the first page of the larger Tor chat file, correct? A. Yes. Q. And that the larger file had a total of five pages, correct? A. Correct. Q. So I'm going to read it right now. "It's sSh: May I ask to whom I am speaking? A formality of course, myself DPR and you are. SSh: This squid." Page 875 Whose computer was this chat recovered from? A. The defendant's. Q. Mr. Kiernan, I want you to take your time and look through what's been marked in your exhibit binder as 222A all the way through 232E, and let me know when you're done. Look at them generally and let me know. A. I'm sorry. 222A to? Q. To 232E. A. Okay. Q. So do you recognize these exhibits? A. I do. Q. What are they? A. All excerpts from the Tor chat logs that were found in the defendant's computer. Q. And again, these are not full chat logs. They're excerpts, correct? A. Correct. Q. Did you participate in the creation of these exhibits? A. Yes. Q. Are they true and accurate excerpts of the entire log files? A. They are, yes. Q. Does each also contain the file name of the full log file at the top like Government Exhibit 222B? A. Yes. Page 876 Q. And does each excerpt also indicate where in the larger Tor file -- the Tor chat log file it was located? A. Yes. MR. HOWARD: The government offers Government Exhibits 222A, 2223, 2224, and 2225 and 225B, 2226A through 226I, 227A. Apparently, I said four "2's" at one point when I should have only said three "2's." Where was I? THE COURT: 227A. MR. HOWARD: Through 227H, 2228, 222 -- sorry. Just two "2's", 9A through 229E; 231A through 231C; and 232A through 232E. And that's it. THE COURT: So no 228? MR. HOWARD: All of them start with "22." Why don't we do it this way: So we have 2A, 3, 4, 5A and 5B, 6A through 6I, 7A through 7H, 8, 9A through 9E. Now, it's 231A through 231C and 232A through 232E and that should cover it. THE COURT: All right. MR. HOWARD: Just note that 229B was cut at the last second, so that's not one that should be included. THE COURT: All right. Thank you. Mr. Dratel. MR. DRATEL: We had some prior objections which we repeat. THE COURT: Yes. Page 877 MR. DRATEL: To the extent they weren't covered, the others, we make the same objections Vayner, 403. And because there has been some alteration of numbers, there have been some changes. THE COURT: Understood. Those objections are noted. They're overruled. And those documents are received. *(Government's Exhibits 222A, 223, 224, 225A-225B received in evidence)* *(Government's Exhibits 226A-226I, 227A-227H, 228 received in evidence)* *(Government's Exhibits 229A-229E, 231A-231C, 232A-232E received in evidence)* MR. HOWARD: Thank you, your Honor. Q. In your review of the defendant's laptop, did you discover files that appeared to be journal entries? A. I did. Q. Mr. Kiernan, can you please look in your binder what has been premarked for ID purposes as Government Exhibit 240A through 240D and 241. A. Yes. Q. Do you recognize these exhibits? A. I do. Q. And what are they? A. Files I extracted from the defendant's laptop. MR. HOWARD: The government offers Government Exhibits 240A through 240D and 241. Page 878 MR. DRATEL: The same prior objections. THE COURT: All right. Those objections are noted, overruled and those documents are received. *(Government's Exhibits 240A-240D, 241 received in evidence)* MR. HOWARD: Ms. Rosen, can you please publish Government Exhibit 240A. Q. What is the title of this file, Mr. Kiernan? A. 2010.docx. Q. And what is the date that this file was last changed as reflected in the meta data? A. 2/27/2011. MR. HOWARD: Ms. Rosen, can you please add the highlights to this document just for the ease of reading them in. I'm going to read the highlighted portions now. If we can zoom in at the top. "2010. I started the year in the middle of my stint with Good Wagon Books. Donny and I had worked on it the last quarter of 2009 and we were trying to ramp up by hiring people to go door-to-door. It was a real struggle and by the end of our trial partnership, it was clear that we hadn't grown the business to the point that it made sense for me to stay on. "I had to find a job quickly, so I turned to Craig's List and found American Journal Experts. For the next six months, I edited scientific papers written by foreigners. It sucked. The hours were flexible, but it drained me. I hated working for someone else and trading my time for money with no investment in myself." Page 879 Can we go to the next page, please. "While all of this was happening, I began working on a project that had been in my mind for over a year. I was calling it Underground Brokers, but eventually settled on Silk Road. The idea was to create a website where people could buy anything anonymously, with no trail whatsoever that could that could lead back to them. I had been studying the technology for a while, but needed a business model and strategy. I finally decided that I would produce mushrooms so that I could list them on the site for cheap to get people interested. I worked my ass off setting up a lab in a cabin near Bastrop off the grid. In hindsight, this was a terrible idea and I would never repeat it, but I did it and produced several kilos of high quality shrooms. On the website side, I was struggling to figure out on my own how to set it up. Driving out to Bastrop, working on Good Wagon, and trying to keep up my relationship with Julia was taking all of my time. By the end of the year, I still didn't have a site up, let alone a server." Ms. Rosen, can you zoom out to the next page, please. "In 2011, I am creating a year of prosperity and power beyond what I have ever experienced before. Silk Road is going to become a phenomenon and at least one person will tell me about it, unknowing that I was its creator. Good Wagon Books will find its place and get to the point that it basically runs itself. Julia and I will be happy and living together. I have many friends I can count on who are powerful and connected." Page 880 Ms. Rosen, can you please publish Government Exhibit 240B. Q. Mr. Kiernan, what is the name of this file? A. 2010.ODT. Q. And where was it located on the computer? A. I'm sorry. 2011.ODT. Q. And where in the defendant's computer was it located? A. This was in his home/frosty/Documents/journal/2011 directory. Q. And what was the date when this file was last changed? A. 2/5/2012. MR. HOWARD: Ms. Rosen, can you please add the highlights to this document as I'll read them, if you can just zoom in the top. "2011. Still working on Good Wagon Books and Silk Road at the same time. Programming now. Patchwork php mysql. Don't know how to host my own site. Didn't know how to run bitcoind. Got the basics of my site written. Launched it on freedomhosting. Announced it on the bitcointalk forums. Only a few days after launch, I got my first sign-ups and then my first message. I was so excited I didn't know what to do with myself. Little by little, people signed up, and vendors signed up, and then it happened. My first order. I'll never forget it. The next couple of months, I sold about ten pounds of shrooms through my site. Some orders were as small as a gram and others were in the qp range. Before long, I completely sold out. Looking back on it, I maybe should have raised my prices more and stretched it out, but at least now I was all digital, no physical risk anymore. Before long, traffic started to build. People were taking notice, smart, interested people. Hackers. For the first several months, I handled all of the transactions by hand. When they came into my local bitcoin client, I matched them up with the amount of time" -- I'm sorry -- "with the amount and time of the purchase and did all of the necessary account adjustments. Between answering messages, processing transactions, and updating the codebase to fix the constant security holes, I had very little time left in the day, and I had a girlfriend at this time!" Page 881 I'm skipping ahead. "So, while still manually processing transactions and responding to a bigger and bigger message load, I learned to use codeigniter and began rewriting the site. At some point around this time, I also learned how to host my own site and was on my own servers." "Rewriting the site was the most stressful couple of months I've ever experienced. I worked all day everyday, still processing transactions by hand, dealing with scammers, answering messages, meeting new strange people through my site and getting to know them. When I finally got the site ready, there were several new features including a tumbler and automatic mated payment processing." Page 882 "AND in addition to these stressors, Silk Road got its first press, the infamous Gawker article. When you look at the historic #s, you can see right when it happened. A huge spike in signups, and the beginning of an upward trend in commerce that would continue until the time of this writing, and hopefully for much longer. There was really a smattering of press at this time including the local news in FL! Most interestingly, two U.S. senators came out against the site and against bitcoin. They made a big deal out of it and called for a shutdown of the site." "Some major advances were price pegging, vendor ranking, a more sophisticated feedback system, buyer stats, transaction logging and building up the admin toolset. Most importantly, the market began its path to maturity. Vendors and buyers forged great relationships, more vendors came in to fill holes in the market, other completed and variety, customer service, and professionalism emerged. After making about $100k an up to a good 20-$25k monthly, I decided it was time to bring in some hired guns to help me take the site to the next level. This would prove to be the biggest challenge I ever faced. I actually got to see a fairly wide range of employee types. SYG, the schmoozer who winds up being a waste, DA, the model employee. Super enthusiastic, hard working and trainable. Then there was Utah, professional who does it for the money. Gets the job done, but his heart isn't always in it. First I put up an ad for a system administrator. I needed someone to help me take the back end to the next level in security. I had many candidates duke it out in the forum on many topics from os to isolation to software to security. In the end, I made what I thought was a wise decision." Page 883 "I was still working with SYG, so Utah was set to work on rewriting the site. Around this time, Variety Jones showed up. This was the biggest and strongest willed character I had met through the site thus far. He quickly proved to me that he had value by pointing out a major security hole in the site I was unaware of." "He convinced me of a server configuration paradigm that gave me the confidence to be the sole server administrator and not work with someone else at all. He has advised me on many technical aspect of what we are doing, helped me speed up the site and squeeze more out of my current servers. He also has helped me better interact with the community around Silk Road, delivering proclamations, handling troublesome characters, running a sale, changing my name, devising rules, and on and on. He also helped me get my head straight regarding legal protection, cover stories, devising a will, finding a successor and so on. He's been a real mentor. Shortly after I met VJ, I started looking for a right hand man, an administrative assistant of sorts. Someone to answer messages, manage the forum and Wiki, and eventually even dispute resolution. I found that man in Digital Alchemy, who was one of the original members of the site and had been modding the forums for pretty much the whole time. There were lots of applicants, but for some reason DA stuck out as promising, and he has turned out to be invaluable. He quickly learned how to respond to messages and keep things running smoothly. Before long he was managing the forums, the wiki, the messages, the resolution center, scam prevention, and odd jobs for me like mini-research projects and tedious tasks." Page 884 Q. Now, Mr. Kiernan, at the end of this excerpt, there was a reference to an employee named DA. Did you find any references to DA in the Tor chat log files? A. I did, yes. MR. HOWARD: Ms. Rosen, can you please publish Government Exhibit 232B, which has already been admitted into evidence. Zoom in on the top half, a half at a time. "myself: Are you ready to become judge jury and executioner. Da: Yep." Page 885 And then there's an emoticon. "myself: OK, click resolutions, form your support panel. Myself: This will pull up the most past-due resolution. Da: It's loaded. Myself: Top line is how many past due resolutions there are. It says "under review" to the users. The next six lines are the transaction details. Kill resolution link finalize the resolution without crediting buyer or seller. You rarely need to use this, but sometimes both parties are completely unresponsive and you need to clear it out of your queue." By the way, I note this is a conversation from January 8, 2012. The conversation continues: "myself: Left stats table is the buyer. Purchases are the number of purchases that were eventually finalized and not canceled and doesn't count open orders. Refund rate is the total money returned to the buyer from the resolution center divided by the total money spent. And the time-frames are the stats from the past 30 days, 90 days, and the life of the buyer's account. Keep notes of what these numbers mean so you can review them if you forget." Ms. Rosen, can you please publish Government Exhibit 232A, which has already been admitted into evidence. Page 886 Q. Mr. Kiernan, at the top it says here pages "148-149 out of 257"? A. Yes. Q. Does 257 refer to the total number of pages in the full Tor chat log? A. Yes, it does. Q. So now I'm going to read dated March 14, 2012. "myself: Do you make purchases with a DigitalALCH account. Da: [...] No, not for a while. I had at one point but only to way out there drop location. States away :)" Emoticon. Da: I use the KindestDaze generally. Myself: That's good. Your name is getting higher profile on the forums and we wouldn't want anyone with your address from past orders to compromise you. We might want to construct a new identity for you though. Da: Say that I'm quitting. Yea? Myself: Maybe, or just disappear. Let's think on it for a few days. Da: IRL or online? Myself: No, just online. My concern is that LE will see that DA is a player at Silk Road by your forum presence and then track down who you bought from and sold to under that name and then find you irl. Page 887 Da: Damn. I really like the DigitalALCH moniker. It really fit me. Oh, well freedom is better than prison." Emoticon. "myself: Yep. I got to protect my assets too. Da: Do you mean me? Or outside assets. Myself: You." MR. HOWARD: Ms. Rosen, can you please publish Government Exhibit 222A, which has already been admitted into evidence. Q. Mr. Kiernan, this is page one of a Tor chat log chat that's a total of 16 pages, correct? A. Correct. Q. It's dated April 20 -- the first excerpt is dated April 20, 2012, correct? A. Yes. Q. "sSh: I have the forum to manage and the profile updates review. Is there anything else you'd like me to get doing, or shall I refer to DA for such business. Myself: Normally DA, but since he is out of commission, he can't manage it. Myself: That's fine for now. Once we get you trained on support, you'll have plenty to do before he's recovered." It picks up again on April 21, 2012, correct, Mr. Kiernan? Page 888 A. Yes, it does. Q. "Myself: OK, go to .onion/support and tell me what you see. SSh: I see an entire screen of new options! Many radio boxes with various labels. Myself: Perfect. I'll give you a little tour. New vendors, you are familiar with. Click messages. The number next to it is the number of unread messages for SR support and vendor support. Vendor messages go to the front of the queue. It's just like the bulk reply view in the main messages area, but it pulls up something like 75 messages at a time and the options to the right of the message are a little different. SSh: All right. I've got it loaded. It seems that quite a few people need assistance today. Myself: Actually the only difference is the forward to DPR box. If this is checked it forwards all unread messages from the user to me." And once again, the next section starts on April 21, 2012, right? A. Correct. MR. HOWARD: "myself: We already gave him his seller status back, so just tell him to change it. We should have told him to change it before we made him a seller again. Page 889 But I don't want to go back and forth taking and giving. SSh: Okay then. Should I put in a direct message, or add it to the support message on the list page. Myself: Just add it to the message since we haven't sent them off yet. SSh: How's this sound: Your Vendor Status has been restored. Please change your profile to comply with the seller's guide. Best of fortune regarding your business here on the Silk Road. Myself: That's good, but give him a warning too. Something like. Please read the seller's guide very carefully. If we find you out of compliance again, your selling privileges will be permanently removed." Ms. Rosen, can you please publish Government Exhibit 240C, which is already in evidence. Q. Mr. Kiernan, what is the name of this file? A. Daily.ODT. Q. And where was it located on the defendant's computer? A. This was under the home/frosty/documents/journal/2011Q4/December/week 4 directory. Q. And does the meta data indicate the date on which the file was last saved? A. Yes. 12/29/2011. Page 890 Q. "12/29/2011 chatted with VJ again today. Him coming onto the scene has reinspired me and given me direction on the SR project. He has helped me see a larger vision. A brand that people can come to trust and rally behind. Silk Road chat, Silk Road exchange, Silk Road credit union, Silk Road market, Silk Road everything! And it's been amazing just talking to a guy who is so intelligent and in the same boat as me, to a certain degree at least. So, today we talked mostly about the exchange, what to charge, boundary conditions, etc. Then I went for a surf with Billy Becket. Caught a couple of good waves, chatted with him took some wipe outs and went in. Soon after, I ran around the city with Ashley and Kelly. We drank some beer, walked around the city and botanical gardens. I then went out with Jessica. Our conversation was somewhat deep. I felt compelled to reveal myself to her. It was terrible. I told her I have secrets. She already knows I work with bitcoin which is also terrible. I'm so stupid. Everyone knows I am working on a bitcoin exchange. I always thought honesty was the best policy and now I didn't know what to do. I should have just told everyone I am a freelance programmer or something, but I had to tell half truths. It felt wrong to lie completely so I tried to tell the truth without revealing the bad part, but now I am in a jam. Everyone knows too much. Dammit." Mr. Kiernan, during this excerpt, there was a reference to an employee named VJ? Page 891 A. Yes. Q. Did you find any references to VJ in any Tor chats? A. I did, yes. MR. HOWARD: Ms. Rosen, can you please publish Government Exhibit 226G, which has already been admitted into evidence. THE COURT: Just for your planning purposes, we'll end in about three minutes for lunch. MR. HOWARD: Maybe it makes sense to do this exhibit and then take the break. THE COURT: That's fine. Q. Mr. Kiernan, was this another Tor -- this is an excerpt of another Tor chat log recovered from the defendant's computer? A. Yes, it is. Q. And up here it says "page 312 of 1,096." Does that reflect that there were 1,096 pages in the full chat log? A. Yes, it does. Q. And this takes place on January 15, 2012, correct? A. Correct. Q. "VJ." Emoticon or some sort of symbols. "Kicks self for assuming. Should have asked for the code long ago. Just didn't see the need. Mark it down as a learning experience for me as well. Myself: This whole thing has been on a wing and a prayer. Besides basic php and html I've learned everything on the fly. Page 892 Vj: Well, I'm glad I didn't go for that nap, this was much more rewarding. Vj: And you've done a damn fine job but you're becoming more of a target for hackers and better ones as time goes by. Myself: I hadn't opened a Linux terminal until I left freedom hosting a month after the site launched. Vj: Just thank FSM that they didn't start on you earlier. Myself: FSM? Vj: #Diety. Myself: Ahh. Vj: Flying Spag. Myself: I've been incredibly blessed. Vj: I have a lot of admiration for the big brain on you. I don't know two other people that could have done it. Myself: I was a hairs breath from going to jail before the site even launched for growing shrooms." Q. Mr. Kiernan, all of these chat logs that we have reviewed, whose computer were they recovered from? A. The defendant's. THE COURT: Ladies and gentlemen, let's take our lunch break now. We'll resume at 2:00. I want to remind you not to talk to anybody, including each other about anything having to do with this case. Thank you. Page 893 *(Jury excused)* *(Continued on next page)* Page 894 *(In open court; jury not present)* THE COURT: Mr. Kiernan, you can take a break. We're going to pick up again at 2:00. THE WITNESS: Yes. *(Witness temporarily excused)* THE COURT: Let's all be seated. I just had two things: One, Mr. Dratel. You had asked for the hard drive to be received subject to connection. I thought that I heard enough for it to be received, but if you perceive by who is going to testify, if anything occurs that undoes that, then obviously we'll take that into consideration, but it did appear to me there was enough to get it authenticated. MR. DRATEL: That's the reason why it's sort of the cart before the horse to a certain extent. THE COURT: I understand. MR. TURNER: We'll complete the chain with the next witness. THE COURT: Thank you. Then there were the series of exhibits with the 22s that we had, all of which were subject to various objections, including some that weren't noted on the pretrial order because they came in afterwards. I just wanted to make it clear the nature of the Court's rulings. The objections were, among others, the Vayner objection. The Court does believe that given the testimony of this witness, that there is sufficient grounds for authenticity. Page 895 In terms of it not being part of the charged conduct, that's really a relevance objection, and the Court finds that these are directly relevant to a number of issues in the case. In terms of 403, the Court does not find that these are substantially outweighed by the danger of unfair prejudice or misleading the jury or wasting time; indeed, they are evidence which is necessarily to the government's case in terms of the theories that they have posited and not unduly prejudicial, so the Court did allow those, and all of those really fall under the same rationale. Was there anything that you folks wanted to raise before we took our own break? MR. TURNER: No, your Honor. MR. DRATEL: No, your Honor. THE COURT: Thank you. I do have one matter at 1:00. Oh, I don't. It's been taken off-calendar. I don't have a matter at 1:00, so you folks are welcome to keep all of your things there as you see fit. Thank you. We'll return at 2:00. *(Continued on next page)* Page 896 AFTERNOON SESSION 2:10 p.m. *(In open court; jury present)* THE COURT: Let us all be seated. Mr. Howard, you may proceed, sir. MR. HOWARD: Thank you, your Honor. THOMAS KIERNAN, resumed. DIRECT EXAMINATION CONTINUED MR. HOWARD Q. Good afternoon, Mr. Kiernan. A. Good afternoon. Q. So in the morning, you testified that it took approximately three hours to do the triage of the laptop, right? A. That's correct. Q. Again, what were you trying to do with the laptop triage? A. Preserve evidence and not let the laptop get into a state of encryption. Q. And following the triage, you provided the laptop to Special Agent Beeson? A. I did. Q. And approximately how long were you performing the triage in the library itself? A. In the library? About an hour or so. Q. And what happened after you were finished in the library? A. We took the laptop and I carried it and transported it to the defendant's residence. Page 897 Q. And how did you transport it there? A. We had a van or we had a car outside. Q. Did you drive? A. I did not drive, no. Q. And what, if anything, did you do while you were in the car with the laptop? A. Just ensured that the laptop stood on. I didn't want the laptop to turn off during that time. Q. And what did you do after you arrived in the defendant's residence? A. I continued triage, kept the laptop running and then waited for Special Agent Beeson to show up to give it to him. *(Continued on next page)* Page 898 MR. HOWARD: Now, Ms. Rosen, could we please publish Government Exhibit 222G again for just a quick moment. Sorry, I meant 226G. Pardon me. Q. So, Mr. Kiernan, this was the excerpt that we read before we took the break for lunch, correct? A. Correct. Q. Right here at the top it indicates it is page 312 out of 1096, correct? A. It does, yes. Q. Were there other chat excerpts that were taken from this 1096 page file involving VJ? A. Yes, there was. MR. HOWARD: So at this point, Ms. Rosen, if you could please publish Government Exhibit 226F, please. Q. Mr. Kiernan, this is page 964 of the 1096-page chat log, right? A. Correct. Q. This conversation took place on June 1, 2012. A. Yes. Q. "Vj: Also, Variety Jones is dead, poor fella. No more seed biz for him. "Myself: :( "Myself: you goin by cimon now? "Cimon: I was keeping that going as a way to get btc legally in the UK, but I'm leaving the UK, and the legality elsewhere means it's best I shut it down. Page 899 "Cimon: I have no idea what i'm going by now, dammit! "Myself: well I just changed you from vj to cimon on torchat. "Myself: so yer cimon. "Cimon: there ya go. "Cimon: and that's how changes are made. "Cimon: cimon it is." Now, Mr. Kiernan -- actually, Ms. Rosen could you put that back up for a second. So, Mr. Kiernan, up here at the top, we have the name "VJ," correct? A. Correct. Q. And who names the other side of a Tor chat that's logged on a one zone computer? A. The user of that computer. Q. And so down here at 5:53 p.m., you see "Simone"? A. Correct. Q. Is that a different user than VJ? A. A different username. Q. Right, but is it the same person in this chat? A. Yes. Q. What appears to have happened? A. The associated name given by the user of the computer, the defendant, changed it to Cimon. Page 900 MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 227B, which has already been admitted into evidence, and zoom in, please. Q. This is on August 31, 2012, correct? A. Correct. Q. "Cimon: Hey, could you scratch together a little org chart for me, so I know who's supposed to be doing what, on the forums and support? "Myself: sure "Myself: support "Me "Indica|Sativa "SquidShepherd "Forum "Admins "Me "Indica|Sativa "Mods "SquidShepherd "Limetless "Nomad bloodbath "Guru "Myself: Squid talks to indi, indi talks to me. very occasionally Squid and I will talk." Ms. Rosen, could you please publish Government Exhibit 227A, which has already been admitted into evidence. Page 901 And this chat occurred on October 24, 2012, correct? A. Correct. Q. "Myself: DA and squid both went awol "Myself: squid said his comp died and is waiting on a replacement, but that was about 5 days ago now "Myself: DA is gone for good "Cimon:" expletive, "I haven't seen DA onlne since we talked, what happened with him? Myself: got a new guy on who seems good and am looking for another "Myself: he slowly flaked out. the last I heard he had a family emergency to rush off to and didn't know when he'd be back "Myself: right now I'm spending about an hour a day on resolutions and inigo (new guy) is chipping away at the messages "Myself: I tried recruiting from bitcointalk.org "Myself: but I may just dip into the local community "Cimon: dude, really? "Myself: well? "Myself: working for a criminal enterprise isn't exactly attractive "Myself: to everyone "Cimon: What were you paying squid? Page 902 "Myself: $900/week "Cimon: What are the major issues CSRs deal with now? "Myself: the toughest stuff is keeping up with the vendors and knowing when to demote them "Cimon: not including resolutions "Myself: that ties into the resolutions "Myself: besides that, answering messages is pretty trivial, just time-consuming "Cimon: how many vendors get demoted, and how many permanently? "Myself: messages, resolution, vendor quality control "Myself: 1-3 per week "Cimon: what are the issues, just non-delivery? "Myself: it varies "Myself: just a sec "Myself: faking feedback, going around escrow, loan scamming, exchange scamming, fake product..." MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 240D, which is already in evidence. Q. Mr. Kiernan, what was the name of this file as it was saved on the defendant's computer? A. 240D? Excuse me. "Daily.odd." Q. Where was it located on the defendant's computer? A. This is the "home/frosty/documents/journal/2012/Q1/January/ week one" folder. Page 903 Q. And what was the date that this file was last changed, according to the metadata? A. 1/1/2012. Q. "January 1st, 2012 "Well, I'm choosing to write a journal for 2012. I imagine that some day I may have a story written about my life, and it would be good to have a detailed account of it. I did some work in the morning, can't remember now exactly what it was, but it wasn't long before I was responding to text messages and making plans to hang out on the beach. It was a holiday for everyone, so the beach was as packed as I've ever seen it, a teeming mass of humanity, helicopters flying overhead, waves crashing, a real spectacle. I was offered a ticket to a warehouse party by Nicole, but just couldn't bring myself to accept. I just was not in the partying mood. George also invited me to join him camping for 2-3 nights. I wanted to go, but the swell is low and it's just too much time away from Silk Road, and there is so much to do before the rents get here, and before I leave for Thailand. I need to get DigitalAlch set up handling the resolutions, and it just seems like Variety Jones gives my broad sweeping tasks on a daily basis. Emma, Jessica, Cally, Kim, Tim and a couple others, Mike, were all on the beach with me. Playing paddle ball and soaking up the sun. I've been thinking a bunch about what is next for me. I like my little life here in Bondi, but what if I love Thailand, or want to go on even further? I don't want to go backwards, and while I could see a lot more in Australia, I'm not even taking the opportunities that are coming up as it is. I need to find a place I can work from cheap and off the beaten path." Page 904 MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 225A, which has already been admitted into evidence. Q. Mr. Kiernan, this is page 2 of the 15-page chat log, is that correct? A. Correct. Q. "Myself: go here "Myself: http://silkroadvb5piz3r.onion/support "Myself: let me know when you are there "Scout: just waiting for tor … okay, i'm there and it's saying 'no access' "Myself: you are signed in with scout? "Scout: yes "Myself: do you know how to figure out your account id? "Scout: i did many months ago. lol. remind me? "Scout: oh i found it "Myself: what is it? "Scout: 77594f7023 "Myself: try again Page 905 "Myself: refresh "Scout: okay, it worked - i'm in. "Myself: cool "Myself: it's kind of a mess "Myself: but once you learn the tools, it's not so bad." MR. HOWARD: Ms. Rosen, could you please publish that again, and can you zoom in on the first three lines of the chat and put it at the top of the screen, please. And you could please publish 201K on the bottom of the screen, please, and zoom in on the URL bar. Q. So, Mr. Kiernan, here you see during the chat "myself" says "http" and then an address. Do you recognize that address? A. Yes. Q. And is that the same address that you saw in -- on the Tor browser that was running on the defendant's computer? A. It is, yes. MR. HOWARD: Ms. Rosen, could you please publish Government Exhibit 225B, which has already been admitted into evidence. Q. Mr. Kiernan, this chat is on January 26, 2013, correct? A. Correct. Q. "Myself: so, im down a set of hands as of 12 hours ago "Myself: now would be a great time for you to come on board if you are still interested Page 906 "Myself: or do you still have reservations? "Scout: the only reservation i have is about the safety of being part of the staff. safety from legal issues, that is. having a hell of a time getting past that worry. "Myself: the way i got over it is by looking at the risk/reward "Myself: if you look closely at the risk part of it "Myself: you can break it down into 2 parts "Myself: chances of getting caught, and what will happen if you get caught "Scout: right - and i have no idea what the answer is to either of those hypotheticals Myself: I'm not 100% about the what will happen part. It's not like there have been cases in the past like ours. But when you look at the chance of getting caught part, it's incredibly small "Myself: put yourself in the shoes of a prosecutor trying to build a case against you "Myself: what evidence could they pin on you? "Myself: there is nothing on your laptop for them to use, if you obscure your bitcoins propperly, there is no way for them to trace them back to me. Realistically, the only way for them to prove anything would be for them to watch you log in and do your work. "Scout: right. which, as i understand it, they could. Page 907 "Myself: this is just a realization I've come to after doing this for almost 2 years "Myself: sure, someone could stand behind you without you realizing it "Myself: we are definiely on the cutting edge, the fringe. I'm not sure how else to put it, but the biggest con about this work is not the risk of going to jail or having your life disrupted "Myself: it's getting used to and living with that possibility no matter how remote "Myself: and keeping your work a secret." Ms. Rosen, could you please publish Government Exhibit 241. Q. Mr. Kiernan, what is the name of this file as stated on the defendant's computer? A. "Log.text." MR. HOWARD: Ms. Rosen, could you just add the highlights to the portions that we will read for now. Q. And, Mr. Kiernan, the first entry on the top of the first page is labeled March 20, 2013, correct? A. Correct, yes. Q. "Someone posing as me managed to con 38 vendors out of 2 btc each with a fake message about a new silk road posted about cartel formation and not mitigating vendor roundtable leaks. Worked on database error handling in CI." Page 908 "4/9/2013: Ssbd considering joining my staff. "04/10/2013: Some vendors using the hedge in a falling market to profit off of me by buying from themselves. turned of access log pruning so I can investigate later. Market crashed today. Being blackmailed again. Someone says they have my ID, but hasn't proven it." "4/11/2013: Set up tor relays. Asked scout to go through all images on site looking for quickbuy scam remnants. Cimon told me of a possible ddos attack through tor and how to mitigate against it. Guy blackmailing saying he has my id is bogus." "4/13/2013: Inigo is in the hospital, so I covered his shift today. Zeroed everything and made changes to the site in about 5 hours." "4/14/2013: Did support. inigo returned. Started rewritting orders->buyer_cancel, been getting error reports about it." "5/1/2013: Symm starts working support today. Scout takes over forum support." "5/3/2013: Helping smed fight off attacker. site is mostly down. I'm sick. Leaked IP of webserver to public and had to redeploy/shred. Promoted gramgreen to mod, now named libertas." MR. HOWARD: And now, Ms. Rosen, could you actually just stay on the next-to-last page of this exhibit and just focus on the very, very bottom, the last entry. Page 909 Q. What is the date of the last entry in this log file? A. 9/30/2013. Q. What does the metadata reflect about the date that this file was last changed? A. That's not on my copy I have here. MR. HOWARD: Do you want to go to the next page. Can we zoom in on the bottom left-hand window here. Q. And what does the metadata, Mr. Kiernan, indicate about the date that this file was last changed? A. 10/1/2013. Q. Now, Mr. Kiernan, could you flip in your binder to what's been marked for identification purposes as Government Exhibit 242. A. Yes. Q. What is this exhibit? A. A file that I exported from the defendant's laptop. Q. What was the name of the file? A. "Weekly_report1-4-13.txt." Q. Where was the file located on the computer? A. This is from the home/frosty/backup/reference/reports folder. Q. On what date was -- according to the metadata, on what date was this file saved to the defendant's hard drive? A. 1/5/2013. Page 910 MR. HOWARD: The government offers Government Exhibit 242 into evidence. MR. DRATEL: The same objections, your Honor. THE COURT: All right. Those objections are overruled. GX242 is received. *(Govern