United States v. Ulbricht
79 F.Supp.3d 466, 96 Fed. R. Serv. 348, 2015 U.S. Dist. LEXIS 2016 (2015)
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Rule of Law:
Evidence of uncharged violent acts, such as soliciting murder-for-hire, is admissible in a prosecution for non-violent criminal enterprise offenses if it is direct evidence of the charged crimes (e.g., protecting the enterprise) or serves a proper purpose under FRE 404(b), such as proving the defendant's identity. Such evidence will not be excluded under FRE 403 if its substantial probative value is not outweighed by the danger of unfair prejudice.
Facts:
- Ross Ulbricht, allegedly operating under the username 'Dread Pirate Roberts' (DPR), designed, launched, and supervised the administration of Silk Road, an online marketplace for illicit goods and services.
- In January 2013, Ulbricht came to suspect a former Silk Road employee of stealing approximately $350,000 worth of bitcoins from the site.
- Ulbricht allegedly discussed with a co-conspirator having the employee executed and later reported that the employee had been captured and killed.
- In March 2013, a Silk Road vendor named 'FriendlyChemist' attempted to extort DPR for $500,000 by threatening to publish the real names and addresses of Silk Road users.
- DPR contacted another user, 'redandwhite,' and negotiated a payment of 1,670 bitcoins (approximately $150,000) for the murder of FriendlyChemist.
- After payment was sent, DPR allegedly received a photograph as 'visual confirmation' that the murder of FriendlyChemist had been completed.
- In April 2013, DPR allegedly arranged with 'redandwhite' to murder four of FriendlyChemist's associates, paying an additional 3,000 bitcoins (approximately $500,000).
- The government stipulated that it was not aware of evidence that any of the solicited murders were actually carried out.
Procedural Posture:
- A federal grand jury returned an indictment against Ross Ulbricht.
- The Government later filed a Superseding Indictment charging Ulbricht with seven counts, including narcotics trafficking, continuing criminal enterprise, computer hacking conspiracy, and money laundering conspiracy.
- Prior to trial, in the U.S. District Court for the Southern District of New York, both the defense and the Government filed motions in limine to determine the admissibility of certain evidence.
- The defendant moved to preclude evidence that he solicited six murders-for-hire, while the Government moved to allow the same evidence.
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Issue:
In a prosecution for non-violent offenses related to operating a massive online criminal enterprise, is evidence that the defendant solicited multiple murders-for-hire admissible as direct proof of the charged offenses or, alternatively, under FRE 404(b) to prove identity, when the murders were never carried out?
Opinions:
Majority - Forrest, J.
Yes, evidence of uncharged murder-for-hire solicitations is admissible. The evidence is directly relevant to proving the elements of the charged offenses and is alternatively admissible under Federal Rule of Evidence 404(b) to prove identity. First, the solicitations are direct evidence of the charged offenses because they show the defendant acting to protect his criminal enterprise from threats like theft and extortion. This is highly probative of his leadership and supervisory role, which is a required element of the Continuing Criminal Enterprise (CCE) charge. Second, the evidence is admissible for the proper purpose of proving identity under Rule 404(b). The government alleged that messages from 'Dread Pirate Roberts' on the Silk Road system about the murders correspond directly with entries in a personal log file recovered from Ulbricht's laptop, which links Ulbricht the person to DPR the online persona. Finally, under the Rule 403 balancing test, the evidence is not unfairly prejudicial. Given the extremely serious charges of operating a massive global criminal enterprise, evidence of soliciting violence to protect it is not unduly prejudicial, and any potential prejudice is reduced by the government's stipulation that no murders were actually carried out.
Analysis:
This opinion demonstrates the broad, inclusionary application of FRE 404(b) in the Second Circuit, allowing evidence of 'other bad acts' for nearly any purpose other than proving criminal propensity. It establishes that even uncharged and uncompleted acts of extreme violence can be admitted as direct evidence in a non-violent case if they are 'inextricably intertwined' with the charged criminal enterprise, such as by showing the defendant's control and willingness to protect it. This decision is significant for prosecutions of digital crimes, affirming that a defendant's online communications and personal digital records (like a log file) can be powerfully correlated to prove their identity as the operator of an anonymous criminal platform. The court's Rule 403 analysis underscores that the scale and seriousness of the charged crime provide the context for determining whether other bad acts are 'unduly' prejudicial.
