Posts Tagged: Bitwasp

Oct 13

Feds Arrest Alleged Top Silk Road Drug Seller

Federal authorities last week arrested a Washington state man accused of being one of the most active and sought-after drug dealers on the online black market known as the “Silk Road.” Meanwhile, new details about the recent coordinated takedown of the Silk Road became public, as other former buyers and sellers on the fraud bazaar pondered who might be next and whether competing online drug markets will move in to fill the void.

NOD's feedback from Silk Road buyers, according to the government.

NOD’s feedback from Silk Road buyers, according to the government.

A complaint unsealed Oct. 2 by the U.S. District Court for the Western District of Washington at Seattle alleges that Steven Lloyd Sadler, 40, of Bellevue, Wash., used the nickname “NOD” on the Silk Road, and was among the “top one percent of sellers” on the Silk Road, selling high-quality cocaine, heroin and methamphetamine in small, individual-use amounts to hundreds of buyers around the world.

Investigators with the FBI and U.S. Post Office inspectors say they tracked dozens of packages containing drugs allegedly shipped by Sadler and a woman who was living with him at the time of his arrest. Authorities tied Sadler to the Silk Road after intercepting a package of cocaine and heroin destined for an Alaskan resident. That resident agreed to cooperate with authorities in the hopes of reducing his own sentence, and said he’d purchased the drugs from NOD via the Silk Road.

Agents in Seattle sought and were granted permission to place GPS tracking devices on Sadler’s car and that of his roommate, Jenna White, also charged in this case. Investigators allege that the tracking showed the two traveled to at least 38 post offices in the Seattle area during the surveillance period.

Interestingly, the investigators used the feedback on NOD’s Silk Road seller profile to get a sense of the volume of drugs he sold. Much like eBay sellers, merchants on the Silk Road are evaluated by previous buyers, who are encouraged to leave feedback about the quality of the seller’s goods and services. According to the government, NOD had 1,400 reviews for individual sales/purchases of small amounts of drugs, including: 2,269.5 grams of cocaine, 593 grams of heroin and 105 grams of meth. The complaint notes that these amounts don’t count sales going back more than five months prior to the investigation, when NOD first created his Silk Road vendor account.

Cryptome has published a copy of the complaint (PDF) against Sadler. A copy of Sadler’s case docket is here. NOD’s reputation on the Silk Road also was discussed for several months on this Reddit thread.

Many readers of last week’s story on the Silk Road takedown have been asking what is known about the locations of the Silk Road servers that were copied by the FBI. It’s still unclear how agents gained access to those servers, but a civil forfeiture complaint released by the Justice Department shows that they were aware of five, geographically dispersed servers that were supporting the Silk Road, either by directly hosting the site and/or hosting the Bitcoin wallets that the Silk Road maintains for buyers and sellers.

Two of those servers were located in Iceland, one in Latvia, another in Romania, and apparently one in the United States. See the map above.

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