Australian pleads guilty in U.S. for Silk Road drug site staff role

By Nate Raymond

NEW YORK (Reuters) – An Australian man pleaded guilty on Friday to U.S. charges stemming from his role as a staff member of Silk Road, an underground website where people bought drugs and other illicit goods using bitcoin digital currency.

Peter Nash, 42, pleaded guilty in Manhattan federal court to conspiracy to commit narcotics trafficking and money laundering, a month after a U.S. jury convicted the suspected mastermind behind Silk Road, Ross Ulbricht.

Nash, a former senior manager at a support service for adults with mental disabilities, said he became involved with Silk Road in 2013, initially to buy drugs and for “social connections.”

Nash said he never knew the real identity of Silk Road’s operator, who he said asked him to moderate its chat forum. For 10 months of work, Nash said he earned as much as $30,000, which he used to buy drugs.

“I deeply regret my conduct and any consequent harm I caused,” he said.

Nash faces life in prison when U.S. District Judge Thomas Griesa sentences him on May 26.

Silk Road operated from at least January 2011 until October 2013, when authorities seized the website and arrested Ulbricht at a public library in San Francisco.

The website relied on the so-called Tor network, which lets users communicate anonymously. It accepted payment through bitcoins, which according to prosecutors allowed users to conceal their identities and locations.

By the time it was shut down, Silk Road had generated around $200 million in sales, prosecutors said.

Prosecutors said Ulbricht, the website’s admitted creator, operated Silk Road under the alias “Dread Pirate Roberts.”

Ulbricht, 30, was found guilty in February of charges including conspiracy to commit drug trafficking, money laundering and computer hacking. His lawyer has promised an appeal.

Two months after Ulbricht’s arrest, prosecutors in December 2013 announced charges against Nash and two other alleged Silk Road staff members, Andrew Jones and Gary Davis.

Nash said at the time of his arrest in Australia that he was about to go to Europe to propose to his fiance, then a doctoral student. He has been incarcerated ever since.

Jones, a former Silk Road site administrator, previously pleaded guilty in October and agreed to cooperate with authorities. He had been slated as a possible witness at Ulbricht’s trial, though he ultimately was not called.

Davis, another alleged administrator, is pending extradition in Ireland.

The case is U.S. v. Jones, U.S. District Court, Southern District of New York, No, 13-cr-950.

(Reporting by Nate Raymond in New York; Editing by Dan Grebler)