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Federal Agent Says He Secretly Infiltrated Silk Road

NEW YORK -- A federal agent told jurors on Wednesday he covertly became an employee of the website Silk Road, chatting with its operator about "damn regulators" minutes before authorities arrested the man they believe ran the online black market. Jared Der-Yeghiayan, a U.S. Department of Homeland Security special agent, testified in Manhattan federal court that in July 2013 he took over a Silk Road moderator's account and participated in the arrest of its suspected operator, Ross Ulbricht. The testimony came on the second day of Ulbricht's criminal trial. He faces seven counts including operating a continuing criminal enterprise and conspiracy to commit narcotics trafficking. Silk Road was an online black market bazaar where users could anonymously buy drugs and other illicit goods using bitcoins. Prosecutors say it operated from 2011 to October 2013, generating $200 million in drug sales. Ulbricht, 30, admits that he created Silk Road, but his lawyer said Tuesday he was the "fall guy" for its true operators at the time of his arrest in October 2013.

During the trial Wednesday, Der-Yeghiayan said he became a Silk Road moderator after a support staff member called "cirrus" gave him access to that account. He reported to the website's operator "Dread Pirate Roberts," and earned $1,000 a week in bitcoin, he said. After an IRS agent flagged Ulbricht as the Dread Pirate Roberts' possible alter ego, Der-Yeghiayan said he became part of an operation to try to confirm that and arrest Ulbricht.

FBI shuts down largest illegal drug website 2:34

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— Reuters