Silk Road drug dealer testifies against website's alleged operator

Reuters News
Posted: Jan 28, 2015 7:18 PM

By Nate Raymond

NEW YORK (Reuters) - A New York computer consultant testified on Wednesday about how a heroin addiction led him to become a prolific drug dealer on Silk Road, as prosecutors moved closer to finishing their case against the underground website's alleged operator.

The testimony in Manhattan federal court by Michael Duch, 40, marked the first time jurors weighing the fate of suspected Silk Road mastermind Ross Ulbricht heard from a vendor on the website, where drugs and other illicit goods could be secretly bought with bitcoins.

Duch, who has been incarcerated since pleading guilty and came dressed in jail garb, told jurors a heroin habit that cost him up to $3,500 a week led him to deal the drug on Silk Road, where he previously bought pain killers.

"I saw the ease that came with it," Duch said. "There was a perceived level of safety as well as anonymity."

Duch, who in 2012 earned $75,000 through computer consulting, said he earned $60,000 to $70,000 a month selling ultimately 3.18 kilograms of heroin on Silk Road under the alias "deezletime" from April 2013 until his arrest in October 2013.

The testimony came in the third week of trial of Ulbricht, 30, who has pleaded not guilty to charges, including conspiracy to commit narcotics trafficking. Prosecutors expect to rest their case by Monday.

Prosecutors say Ulbricht operated Silk Road under the alias "Dread Pirate Roberts" in a scheme that generated $200 million in drug sales until authorities shut it down.

Duch, 40, was arrested in Warwick, New York, the same day as Ulbricht, although court records suggest the investigations were initially not related.

Duch pleaded guilty in December to conspiracy to sell drugs, including heroin. While he faces 40 years maximum, he testified that he hopes to avoid a five-year mandatory minimum by cooperating with prosecutors.

Duch, who said he did not know the identity of Dread Pirate Roberts, was the second cooperating witness to testify against Ulbricht.

Richard Bates, a college friend of Ulbricht's, previously testified under a non-prosecution agreement that Ulbricht told him he created and ran Silk Road.

Prosecutors said on Monday they decided not to call a third cooperator, Andrew Michael Jones, one of three alleged Silk Road staff members indicted in 2013.

Jones had been in plea talks as of September, although court records give no indication of any change of plea since. His lawyer declined comment.

The case is U.S. v. Ulbricht, U.S. District Court, Southern District of New York, No. 13-06919.

(Reporting by Nate Raymond in New York. Editing by Andre Grenon)