Are you asking how the government can prove that the money in Silk Road's accounts are the proceeds of illegal activity? They have digital records all over the place to prove that. The magic of Bitcoin and the internet--where all activity is neatly recorded in server logs with timestamps. They can prove that without proving that Ulbricht is the one that engaged in the illegal activity. Indeed, Ulbricht's contention is precisely that.
Does a fee collected for helping with illegal transaction is by itself illegaly obtained money?
If you are a cab driver and you have a client that you know is riding your cab to perform illegal trade. Does the police have right to seize your fare?
The courts do decide this. They have decided this.
For assets to be forfeited the government literally sues the property[1] and is required to show the item is subject to forfeiture. If the asset is eligible for forfeiture the owner can claim that they are innocent[2] and prevent the property from being forfeited.
In this case DPR is not claiming that the wallet is his. Because if he did he'd likely harm the criminal case against himself.
Note how the government filed suit against "all assets of Silk Road" - not DPR.
This isn't some secret thing that only the government knows about. You can go to http://www.forfeiture.gov right now and read required notices of forfeiture for all sorts of assets.
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[1] This is how we get court cases with fun names like "United States v. $124,700 in U.S. Currency" and "United States v. Forty Barrels and Twenty Kegs of Coca-Cola"
That said, my understanding is yes, if you know that the purpose of the travel is illegal, then you are aiding and abetting. If they can show it to a "preponderance of evidence" standard, they have the power (not "right") to seize your fare. If they can show it beyond a reasonable doubt, they have the power to punish you as well.
As rayiner mentioned previously, the preponderance of evidence standard is actually not terribly out of place here, being that disputes about ownership of property are generally settled that way.
And yes, it is something for a court to determine.
A hotel owned by someone who has no criminal record or charges is being seized because some of its guests have used it to commit their crimes.
Edit: Seems like the Judge ended up dismissing this specific attempt but the key to take away from this is that the government will try and also sometimes win such cases.
Well, to a degree. That was a bigger grab, since (at least as far as I can see in the article) they did not allege - much less demonstrate - that he had knowledge of any specific instances of criminal behavior.
In some circumstances, it's legitimate - "Yeah, I'll be getaway driver for your heist for $X..."
The allegation there was that he knew about these activities and was turning a blind eye to profit from it. And as you note, the government didn't win there.
Material goods are neither innocent nor guilty. Like rayiner explained, the phrase doesn't apply here. The bitcoins are not on trial and can't be convicted and sent to jail.
