PORTLAND — The biggest methamphetamine dealer on the now-defunct Silk Road online marketplace pleaded guilty Tuesday in Portland to his role in a $607,000 drug and money laundering conspiracy.
Jason Weld Hagen was scarcely your standard meth dealer. The 40-year-old Vancouver resident holds a Ph.D. in philosophy from Purdue University.
At his plea hearing, Senior U.S. District Judge Robert E. Jones asked Hagen how he came to sell meth through the anonymous portals of Silk Road and the secretive world of the Bitcoin black market.
Hagen told the court he left college hoping to pursue life as either an entrepreneur or a professor of philosophy.
“I decided to become an online entrepreneur,” he said.
In a federal court affidavit, Hagen acknowledged that from roughly August 2012 to December 2013, he trafficked in meth and laundered the proceeds, making thousands of online sales in the U.S. and abroad.
The sales came through Silk Road, an anonymous Internet marketplace that began to sell a wide array of illegal products, including drugs, beginning in 2011, according to government prosecutors.
Silk Road served as a kind of Wild West bazaar for illegal guns, heroin, false passports and all manner of shady transactions. And it was all hidden on the cloud, an open secret with a website full of advertisements.
Hagen took measures to avoid detection as the source of the meth. He communicated with customers using digital encryption. And he used a “TOR” ( The Onion Router) account to hide Internet Protocol addresses that might have linked him to sales of America’s most dangerously addictive stimulant.
Government court papers suggest that Hagen, using the screen name “hammertime,” began to advertise meth for sale on Silk Road in November 2012.
Assistant U.S. Attorney Johnathan S. Haub told the court on Tuesday that the investigation leading up to Hagen’s undoing began when Portland police arrested a man on drug charges. The man later fled the state, only to be hunted down by the U.S. Marshals Service.
Facing a drug charge, the man agreed to cooperate in the federal investigation. He went to the U.S. Attorney’s Office in Portland, where he opened a TOR account for Haub to help the government identify the man behind “hammertime.”
Federal authorities in Oregon joined forces with a task force convened in Baltimore, which had been alerted that the meth was being sold out of Oregon.
The task force — including the investigative muscle of the FBI, Homeland Security Investigations, Secret Service and the U.S. Postal Inspection Service — labored to shine a light on those behind Silk Road.
Eventually, the feds began to buy meth from “hammertime,” paying with Bitcoin units, a kind of cybercurrency that bypasses banks.
Government prosecutors on Dec. 10, 2013, indicted Hagen and three other people — Chelsea L. Reder, Richard E. Webster and Donald R. Bechen — for their alleged roles in selling 17.6 pounds of meth on Silk Road. Webster is accused of supplying the meth, with Reder and Bechen serving in supporting roles.
The conspirators sold the drug in small increments, typically a half-gram at a time and hidden inside DVD cases labeled with the words “South Beach Workout,” Haub told the court.
In all, according to the indictment, Hagen and his crew made 3,169 sales. The meth was purchased across the U.S., Australia, the U.K., Czech Republic and other nations, according to government lawyers.
Hagen pleaded guilty to conspiracy charges of exporting controlled substances and money laundering. While it’s not clear how much time he will be sentenced to serve, the illegal exporting charge carries a mandatory minimum of 10 years, Haub said.
Earlier this month, a federal jury in Manhattan found Silk Road founder Ross Ulbricht guilty of multiple charges including computer hacking and drug trafficking.
