Four University of Manchester students ran an international drug dealing operation from the “dark web” of the internet, a court has heard.
The defendants used the now-closed Silk Road website to import, export and supply large quantities of controlled drugs ecstasy, 2CB, LSD and ketamine between May 2011 and October 2013.
The operation’s “prime mover”, Basil Assaf, 26, and his fellow conspirators James Roden, 25, and Elliott Hyams, 26, were arrested on the same date the FBI seized the Silk Road servers and it was announced the US Government had seized the online marketplace.
Silk Road launched in February 2011 hidden on the dark web and advertised banned drugs and other illegal commodities for sale with users creating their own accounts.
William Baker, prosecuting, said when investigators raided Assaf and Roden’s Manchester city centre flat in October 2013 they discovered “what can only be described as a drug dealing factory”.
The fourth conspirator, Jaikishen Patel, 26, was arrested in May 2014.
Mr Baker said the four men shared a “common interest” in consuming drugs while at university and progressed to selling them to other students in the city.
He said: “In May 2011 they went online selling drugs on the Silk Road website on the dark web. They posted the drugs in the mail to people throughout the country and the world.”
More than 6,300 transactions in exporting and supplying drugs took place including 16.7kg of ecstasy in its crystal form – equivalent to 240,000 tablets with a street value of just under £750,000.
Sales on the Silk Road website were valued at 1.14 million US dollars (£812,000), Manchester Crown Court heard.
But the total sales figure, said Mr Baker, was greater because they also supplied drugs in person for cash and when possible avoided paying Silk Road’s commission fees by receiving vouchers, using online payment systems and receiving Bitcoin transfers to Bitcoin addresses which have not been traced.
The prosecutor said the defendants enjoyed a lifestyle “far above that of typical students” including taking holidays to Jamaica and the Bahamas.
Assaf also boasted of his fondness for Veuve Clicquot Rose champagne and that he had enough money to pay for his education and buy a flat in Manchester city centre, the court heard.
Among items seized in the October 2013 raids was Roden’s Iphone which contained a photograph of a flask which bore the image of Walter White – lead character in the Breaking Bad TV series who transforms from chemistry teacher to crystal meth supplier.
Also discovered was an envelope containing drugs which had a return name of Walter White – which Mr Baker said appeared to “a sort of running joke” between the defendants.
The prosecutor said Assaf was in control of the monies by paying his co-defendants and retaining monies hidden in Bitcoin accounts that have not been traced.
He also controlled two Silk Road accounts named Ivory and Cheezy Dave, with the former nominated as Silk Road “drug dealer of the year” in 2011.
The Crown say Assaf, originally from Amersham, Buckinghamshire, has hidden his proceeds of drug trafficking in Bitcoin.
Assaf, Hyams – also formerly from Amersham – Roden, and Patel all pleaded guilty at earlier hearings to various counts of conspiracy to importing, exporting and supplying controlled drugs.
A fifth defendant, Joshua Morgan, 28, has admitted assisted an offender in his paid role of packaging the drugs.
All five defendants appeared on Monday for sentencing which is scheduled to last up to three days.