VANCOUVER—British Columbia is laying claim to $1.4 million US in Bitcoin it seized years ago from a mail-order marijuana dealer — a dealer the government now claims was a vendor on the clandestine Silk Road website.
The allegations, which have not been proven in court, were made in a lawsuit filed by B.C.’s director of Civil Forfeiture, an office founded in 2006 to go after proceeds of crime or assets used in unlawful activity.
StarMetro is withholding the man’s identity due in part to a court-ordered publication ban on any information that may identify his children. The Civil Forfeiture Office, however, claims the man was known online by the pseudonym MarijuanaIsMyMuse, a name that carried weight on the Silk Road.
In court filings, the man denied selling drugs on the now-defunct black market — where everything from firearms, drugs to hit men were offered in exchange for cryptocurrencies — and denied ever using or earning Bitcoin for unlawful activity.
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The Civil Forfeiture Office is seeking 226.4 Bitcoins. At the time of seizure in April 2013, one Bitcoin was worth $140.87 US, but as of June 29 of this year, Bitcoin are worth $6,243 US a pop. The office said this is the first cryptocurrency seizure in its 12-year history of seizing suspected criminal goods.
The dealer was sentenced in 2015 to nine months in jail for trafficking marijuana. Neither the Vancouver police nor the Civil Forfeiture Office were able to explain why the man’s assets are now being sought, years after his drug conviction. Both offices declined to comment, saying the matter is before the courts.
StarMetro attempted to reach the man at his current information-technology job in his hometown of Victoria but was unsuccessful. His lawyer, Lolita Rudovica, issued an emailed statement.
“The property subject to civil forfeiture seized by the police in this proceeding is neither proceeds of crime nor an instrument of unlawful activity. We are currently in the very early stages of the case,” Rudovica said.
The man’s LinkedIn page, now taken down, included stints working in cryptocurrency. Court records described how he had owned two different businesses, focused on cellular and computer technology, respectively. The man also volunteered for the Vancouver Police Department and with Crime Stoppers. Before his arrest, he had no criminal record.
The new evidence in the lawsuit and past court records suggest he was only busted because his two children, toddlers at the time, wandered outside his home while he was asleep, catching the attentions of passersby. One of them called 911.
In a report submitted by the Civil Forfeiture Office, Vancouver police Const. Gordon Stokes described being dispatched to a newly renovated two-floor home in the Kitsilano neighbourhood for a report of “infant children” wandering into traffic. The elder of the toddlers, a three-year-old, led the officer inside the home.
The officer described how he called out to see if anyone was home. No one answered. The smell of unburnt marijuana was strong within the home. In one of the bedrooms, Stokes discovered duffle bags, vacuum sealers, mailing labels, a weigh scale, Ziploc bags and heavy-duty clear plastic.
Eventually, the police report said, the toddler’s father was located in the upper floor of the home. Const. Anna Lohvinovska explained in her report that the man seemed confused, telling officers he had been sleeping and that his children were supposed to be downstairs.
“Const. Stokes asked (the man) for identification; (he) said that he had it in his wallet in his bedroom,” Lohvinovska wrote. “(The man) looked very confused and fidgety; his hands were shaking. (He) began stepping back inside his house saying he needed to use a washroom.”
The man was arrested, and the children were returned to their mother. The next day, police came back with a warrant and searched the home.
Meanwhile, police recommended charges against two others: a person listed as a primary tenant and a man who showed up while police were present and identified himself as a tenant. Court records show the two were not convicted in the offence.
According to evidence filed by the man’s lawyers, police seized nearly 15 kilograms of marijuana during the course of the investigation. Some of it was stored in Ziplock bags, some in vacuum-sealed bags, and court records show some marijuana was found in already-sealed envelopes, complete with mailing labels and stamps. The marijuana present at the scene was valued at $100,000 if sold by the pound.
Police also seized various packaging materials, numerous hard drives, memory cards and several laptops. Three of those hard drives allegedly hold the Bitcoin in question.
On June 27, the man argued in his latest response to the lawsuit that police have continued to keep the hard drives in spite of a court order last year to return the electronics initially seized in 2013.
Those items include a silver Dell XP laptop, to be returned to the man now alleged to be MarijuanaIsMyMuse, and a camcorder, memory card, gun licence application paperwork and personal computer tower, to be returned to another tenant of the home. That tenant was also charged in the case but had his charge stayed by the Crown prosecutor.
The Vancouver man said he went to pick up those items in April 2017; however, the hard drives were missing. The other tenant’s lawyer inquired about his missing hard drive and was told in May 2017 that all of the drives had been seized by police for an investigation.
The Vancouver man is arguing that the seizure of the hard drives was unlawful.
“The defendant seeks a finding from the court that his rights were breached,” reads the man’s response to court, “and seeks the exclusion of any evidence obtained by searching private property and obtaining evidence in contravention of the Charter and in violation of a court order by the VPD.”
The lawsuit filed by the Civil Forfeiture Office alleges that the hard drives also contain records of the man selling far more than just marijuana, including MDMA, cocaine, ketamine, crystal meth, heroin and Viagra. It’s these records, the Civil Forfeiture Office claims, that tie the man to Silk Road and his online alias MarijuanaIsMyMuse.
Silk Road gained worldwide notoriety in October 2013, about six months after the man’s arrest, when the Federal Bureau of Investigation in the U.S. arrested the site’s founder. The website operated under the cloak of anonymity in the “Deep Web,” using software such as Tor, which makes tracing users virtually impossible. The site favoured Bitcoins as an anonymous, untraceable digital currency.
It’s not hard to find references to MarijuanaIsMyMuse and his Silk Road operation, online and elsewhere. The name was cited by lawyer and journalist Eileen Ormsby in her book Silk Road, which detailed her discoveries after the fall of the site’s founder. A brief reference explains how MarijuanaIsMyMuse would include a slip of paper in sent packages, asking buyers to use responsibly while instructing law enforcement to go away.
When reached by phone, Ormsby described how archives of old postings on the website persist online. Part of the information that still exists was extracted by Rasmus Munksgaard, a PhD student at the University of Montreal’s school of criminology.
In an interview, Munksgaard said he built a program that pulls data from Silk Road’s online archives, allowing him to extract information on forum posts. His method allowed StarMetro to identify posts written by MarijuanaIsMyMuse before and after the April 2013 arrest in Vancouver.
Munksgaard said his research has made him familiar with the name MarijuanaIsMyMuse, considered one of the more successful purveyors of cannabis around that time on the site.
“People are going to talk and say who’s the best marijuana vendor ... There’s just a few thousand vendors on these markets on a typical day,” Munksgaard said.
MarijuanaIsMyMuse first identified itself as a new vendor on the site on Nov. 8, 2011, soon boasting that the name had grown to reach the top one per cent of vendors on the site.
“I/we am/are MarijuanaIsMyMuse. Or I/we suppose TeamMuse is more appropriate ... What began almost a year ago as a one-man journey on a bold new marketplace has become a multi-man operation,” the user wrote in one post.
No mention of the arrest was made in any of the posts StarMetro examined. However, about three months after the Vancouver man was arrested, MarijuanaIsMyMuse announced some changes to the team.
In particular, two members were dropped. The team was also responding to concerns that some buyers had been scammed and that the user was no longer a vendor on the site.
“We have dropped 2 team members and added 2 new ones that are on their game,” the user wrote on July 15, 2013. “We are fully functional and not scammers. Hope this sheds light on any doubt that we are and still want to be your one stop shop on SR.”
Meanwhile, it appears that seizures of Bitcoin or other cryptocurrencies alleged to be involved in crime may soon become more common.
“Given the proliferation of cryptocurrency and its documented use in facilitating criminal transactions in other jurisdictions, the Civil Forfeiture Office anticipates receiving more referrals from B.C. law-enforcement agencies involving alternative currencies,” reads a statement from the Civil Forfeiture Office.
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