Silk Road's Biggest Meth Dealer "Hammertime" Pleads Guilty In Oregon Court

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On Tuesday, a philosophy PhD turned “online entrepreneur” and Silk Road drug dealer pleaded guilty to his part in a conspiracy to sell 17 pounds of meth for more than $600,000 on the Silk Road.

Jason Weld Hagen, 40, known as “hammertime” on the Silk Road, was charged alongside three other Washington residents on December 18, 2013, for conspiracy to distribute meth around the world through the Silk Road in addition to 15 counts of money laundering.  All four pleaded not guilty. The arrest came two months after the Silk Road servers were seized by the feds in Iceland and the online marketplace’s mastermind, Ross Ulbricht, was arrested in October 2013.

Now just two weeks after Ulbricht was convicted for creating the site Hagen used to earn more than half a million dollars, Hagen has pleaded guilty to two of 19 charges–“conspiracy to export 50 grams or more of actual methamphetamine” and “conspiracy to commit money laundering.”  The maximum sentence for the first is life in prison, with a mandatory minimum of 10 years in prison and 5 years supervised release. The maximum sentence for the second charge is 20 years in prison.

“I provide this affidavit to assist the government in seizing all proceeds of my illegal activity in drug trafficking and money laundering,” Hagen wrote.

In his affidavit, Hagen explains that he sold meth and laundered money on the Silk Road between August 2012 and December 2013, accepting Bitcoin as payment and using Tor to communicate with customers. Hagen then exchanged the Bitcoin for dollars and used a wide array of bank accounts and PayPal accounts to distribute the money to his co-conspirators.  Hagen and his codefendants made over 3,000 sales globally, including in Australia, Canada, the Czech Republic, Italy, and the UK, according to the affidavit.

At Hagen’s residence, the feds found a number of bank accounts, cash cards, fake IDs, and PayPal accounts. Hagen especially draws attention to a Visa card from Bank Zachodni in Poland, which Hagen says he used to anonymously convert Bitcoin into cash. Hagen also notes that the feds found 32 pre-paid debit cards and ten burn phones upon searching a codefendant’s home.

With the plea agreement, Hagen agrees to forfeit $712,916.12 to the government, including money seized by the feds at the time of his arrest and the $607,220 he earned through the drug trafficking conspiracy.

In the affidavit, Hagen agrees to provide passwords for all seized account to the government, stating that he is the “real party of interest with respect to these accounts and to the exclusion of all others.” The affidavit lists 8 pre-paid card accounts, 24 American Express accounts, 6 Bitcoin accounts, 3 Bulbul investment accounts, 3 Coinbase accounts, and 124 email addresses belonging to Ebay/PayPal accounts.  The account numbers and names are redacted in the affidavit, but the email addresses appear in plain text.

Hagen’s trial was originally scheduled to begin a year ago but was delayed until this month. On February 4, the same day Ulbricht was found guilty in Manhattan, Hagen asked for a plea hearing, which was scheduled and held Tuesday. Hegan will be sentenced on May 27, 2015.