Just like Amazon, only different: Silk Road was the #1 purveyor of everything illegal until its recent FBI sting and shutdown.

In today’s murky world of cyber crime, it’s become a battle of who can out-hack who. And somewhat to the underworld’s surprise, the FBI is getting pretty darned good at out-hacking the hackers at their own game. Where once a few guys sat in an unmarked van and watched bad guys through one-way windows, today a good federal agent has to be well-versed in the dark arts of cyber hacking.

Silk Road Bust Explained: Sort Of

Nowhere was this reality better illustrated than in the FBI’s recent sting of Silk Road, the site well-known to be every bad guy’s black market source for weapons, drugs, sex and even things as ominous as hired hit men.  They call this type of site the “darknet”; and you can think of it as the equivalent of a back alley where the criminals are waiting to meet their customers behind some old garbage cans and a homeless guy sleeping off his drunk. And Silk Road was the worst of the worst of it.

For sure, the FBI has had to get down and dirty as well to infiltrate the worst of the worst on the Internet these days.

Here’s a little overview of how it all went down with Silk Road, which, according to FBI Agent Christopher Tarbell of the FBI’s cyber-crime unit in New York, was  “the most sophisticated and extensive criminal marketplace on the Internet today.”

Hidden Networks, Disguised Servers

Using an underground computer network – referred to as “Tor” or “The Onion Router” (the latter is a system developed by the U.S. Navy Research Lab as a way to hide military communications)- Silk Road was able to send out computer information via three or more different servers, which in turn hid the actual identity of the site’s users. Using Bitcoin crypto-currency – a digital form of money that’s come under much government scrutiny of late – Silk Road’s operators told its customers that no matter what they did, no matter how illegal it was, their actions and their identities could not be traced by law enforcement.

Under this guise, Silk Road gained the dubious distinction of becoming the “eBay”of black market goods and services, wracking up a staggering $1.2 billion in sales via some one million online customers. Whatever you wanted, you could find it there, from phoney driver’s licences to bogus passports, from illegal drugs to any kind of weapons, and from hackers to forgers to the aforementioned hit men.

According to court documents, feds combined good old-fashioned investigation methods with new-age cyber-sleuth techniques to bring the up-to-no-good website to its knees.

Of course, no one at the FBI is going to reveal exactly how they were able to track down these hidden servers, buried behind cyber-façades in exotic countries like Romania and Latvia.  All we know is that – along with colleagues in the DEA and the good ol’ IRS and U.S. Customs – these agents zeroed in on six of these servers, were able to duplicate their contents, and then stealthily watch as the bad guys went about their business of buying and selling illegal goods and services. At that point, the G-men were able to shut the whole operation down, grabbing its assets in the process, which amounted to some 26K in Bitcoins (worth a reported $4 million), while arresting the head bad guy in charge, Ross Ulbricht, at his home in San Francisco on October 1.

While we may never know what hacking secrets the FBI used to achieve this coup, some cyber hacking experts do have their theories about it.

Nicholas Weaver, a researcher at the International Computer Science Institute in Berkeley, California specializing in network security and underground economics, says his best guess from reading court papers is that feds were able to crack the computer codes used to keep Silk Road operational, after which they could access the servers and grab IDs and addresses. Armed with that info, the G-men could find the physical servers and work with local enforcement where the servers were located to seize them and then ultimately, the perps as well.

But the exact details will likely never be known, for obvious reasons.

“That is the $64,000 question. They have not explained how they did it,” says Weaver.

Maybe these great minds can help Obama with the Affordable Care website now.