Sheldon Kennedy, age 26, of Lincoln, Nebraska was charged by complaint on charges arising from the alleged sale of drugs, guns and counterfeit currency on a website known as Silk Road.  The complaint was filed on January 31, 2014 and unsealed February 20, 2014 after his arrest in Miami, Florida.  As of today, Kennedy still has not been presented and arraigned in the District of Maryland.

Kennedy’s charges stem from the widespread enforcement of those affiliated with the Silk Road website. Silk Road was seized by U.S. authorities in October of last year due to the alleged illicit activity facilitated by the website and its administrators.

According to court documents, Kennedy was implicated through discussions between agents with Homeland Security Investigations and a confidential source. The source began working with federal agents in November 2011.  Since that time, undercover agents zeroed in on Kennedy and his alleged activity on the site.

The probable cause serving as the legal basis for the complaint against Kennedy was established through information provided by the confidential source.  However, the veracity of the source is clearly in question based on court documents. Specifically, in the supporting affidavit itself, a footnote reveals that the source was not originally truthful with agents during the investigation and moreover, the source was arrested due to his continued use of illegal drugs.  In an effort to corroborate the source’s information, which is required by law if veracity is in question, the government agents rely on the agents’ review of the Silk Road site, email accounts, and the source’s computer files.

A criminal complaint bypasses the grand jury process for establishing probable cause when bringing charges against a person.  Since it is the grand jury that typically determines whether probable cause exists to indict an individual, probable cause for filing a criminal complaint must be determined in a different manner. Although it can be established through information obtained from a confidential source, the truthfulness and reliability of the source is critical.  Even in a case such as this where the agents “corroborated” the source’s story, the defense should certainly review the issue as to whether probable cause was lawfully established.  If able to attack the underlying probable cause, Kennedy can in turn challenge the lawfulness of the complaint against him.

Apparently, Kennedy also gave incriminating statements to agents when a search warrant was executed at his home on June 28, 2013.  Kennedy was detained and signed a Miranda waiver.  Although Kennedy may be cooperating with agents at this point, it is still worth addressing whether he knowingly and intelligently waived his Fifth Amendment rights. Kennedy may be able to use any missteps taken by the government in plea discussions going forward, or alternatively, at sentencing.

Kennedy has been charged through a criminal complaint with conspiracy to traffic controlled substances (21 U.S.C. § 846), possession of a firearm in furtherance of a drug trafficking offense (18 U.S.C. § 924(c)), the willful transfer, sale or transport of a firearm without a license to another unlicensed person, out-of-state (18 U.S.C. § 922(a)(5)), and conspiracy to pass counterfeit U.S. currency (18 U.S.C. §§ 371 and 472).

Ross Ulbricht, aka “Dread Pirate Roberts,” allegedly created and operated Silk Road.  He has been indicted in Maryland and New York on charges related to the website.  Three other individuals in Maryland have been charged as well; Jacob Theodore George IV, Curtis Clark Green, and David Lawrence Handel.

The author of this blog is Margaret S. Ververis, an attorney specializing in Federal Criminal Defense matters with the law firm of Ferrari & Associates, PC. If you have any questions please contact her at 202-440-2581 or ververis@ferrariassociatespc.com.

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