Faketoshi, The Early Years — Part 1
MyLegacyKit (Link to original medium.com post)
Gregor Sailer: Carson City VI/Vågårda, Sweden, from the series “The Potemkin Village”, 2016
Written by Arthur van Pelt, with assistance from CryptoDevil
ABOUT EDITS to this article: as more material might become available
after publication of this article, it will have edits and updates every now
and then. In that sense, this article can be considered a work in progress,
to become a reference piece for years to come.
Intro
How did Craig Wright (full name Craig Steven Wright) become one of a
plethora of modern day Satoshi Nakamoto pretenders — of whom Jorg Molt,
accused of defrauding $214 million from 50 investors, was finally arrested a
few weeks ago?
Let’s try to find an answer to this question, and map out what we know
about the years 2003–2013 (Ryan v Wright lawsuit, and aftermath) and
2011, when Craig apparently first learned about Bitcoin, up till the very end
of 2015 when Wired and Gizmodo magazines published their now infamous
articles about Craig Wright possibly being Satoshi Nakamoto. And let’s not
forget about the ATO raids that quickly followed the next day! Are these
events related after all, or not?
One of the most infamous Craig “Faketoshi” Wright forgeries backdated March 2008, created after April 2013. The
domain information-defense.com was only registered in January 2009, for example.
In this series of three articles, we will learn everything about the Ryan v
Wright lawsuit that ran from 2003 to 2006, including all appeals, but had an
aftermath till 2013 which almost caused Craig to go bankrupt. Then there’s
the fraudulent 2013 New South Wales Supreme Court claims, the extremely
thorough ATO inquiry in 2013 — 2015, and we will of course show the reader
a fair number of the numerous forgeries that Craig Wright created in 2013,
2014 and 2015 to support his Bitcoin fraud and false Satoshi claims.
Part 1 will cover November 2003 — February 2014.
Part 2 will cover February 2014 — December 2014.
Part 3 will cover January 2015 — December 2015.
Disclaimer: You will see many times the $ symbol being used. Since Craig
Wright lived in Australia in the period of these articles, the $ symbol used in
numbers related to Craig will always refer to the Australian dollar (AUD),
except where indicated otherwise.
The Run Up
In 1999, Craig raised one Australian company:
Vin De La Terre Pty Ltd (June 9, 1999)
which morphed into DeMorgan Information Security Systems Pty Ltd
(December 17, 2001)
In 2001, Craig raised another Australian company:
Ridges Estate Pty Ltd (December 17, 2001)
Let us begin, at the outset, by framing both the character and the historical
behaviour of Craig Wright, in providing you a summary of his legal
'difficulties' arising from a breach of contract and subsequent contempt of
court in 2003.
Original hearing October 30, 2003 and resulting Judgement November 6,
2003
Craig and Lynn Wright were, in a personal capacity and through ownership
of a corporate entity shareholder, the majority owners of the Australian
company DeMorgan Information Security Systems Pty Limited.
"The company’s business includes the provision of information technology
consulting services in general, and specifically the monitoring of computer
systems to guard against “hackers” or other unauthorised intruders."
Its main customers were the Australian Stock Exchange (ASX), Craig's
former employer, along with the Rail Infrastructure Corporation (RIC) and a
number of other businesses. At the end of June 2003, the shareholders of
DeMorgan entered into an agreement with Michael Ryan, to sell 5% of the
company shares to him for $50,000. Part of the agreement included a non-
compete clause which, it doesn't take a law degree to understand, precludes
those involved from attempting to poach the company's clients should they
subsequently leave its employ.
One month later, following their new investor’s all-too-late discovery of
questionable spending within the company, Craig and Lynn Wright resigned
as directors and, you guessed it, Craig set about approaching DeMorgan's
clients for business, including his former employer the ASX, where he still
maintained a good relationship with its employees, with him being cited as
claiming he would “spend over a million dollars to see DeMorgan go under”.
Ironically, it would turn out that Craig would, indeed, be found liable for a
little under half that amount following the resulting liquidation of DeMorgan
arising from his damaging behaviour. A $425,000 bankruptcy notice being
charged against Craig Wright in recovery actions sees him eventually settle
to avoid the inevitable in 2013.
DeMorgan's new shareholder, clearly smarting from having invested in a
business he’d not been given the full truthful picture of, only to see its board
members abandon ship one month later and set about damaging the value
of his investment further, took them to court, where they were found guilty
of a breach of contract and instructed to cease and desist from further
contact with the company's clients.
This is the part in the movie where a narrator would cut in with a wry, "Craig
Wright did not cease and desist from further contact with the company's
clients".
Fast forward to 2004 and Mr Ryan has now had Mr and Mrs Wright dragged
back into court for their nefarious activities in contravention of the original
court's judgement.
HEARING DATE(S): July 26, 2004, July 27, 2004, August 28, 2004
JUDGMENT DATE: August 31, 2004
The long and the short of this contempt of court case is that email records
from Craig's accounts, telephone logs from his mobile number, visitor sign-
in logs at DeMorgan client, ASX offices, as well as actual invoices he issued,
served to chart a damning record of numerous and persistent efforts by him
to secure business after he had left DeMorgan and after he had been told by
a court judgement to stop contacting its clients.
Craig’s attempted defence, a low-tech version of his oft-repeated mantra he
would come to rely on in the coming years, "It wasn’t me, I was hacked".
But the judge, like those who would follow in later years, saw through his
absurd excuses:
Subsequent sentencing demonstrated that judges do not take kindly to
defendants who brazenly lie to them and ignore their rulings, "In my view Mr
Wright’s deliberate flouting of his undertaking makes this a serious offence.
His lack of contrition exacerbates its seriousness. There is a need to bring
home to a contemnor the seriousness of his contempt. For the purposes of
the Crimes (Sentencing Procedure) Act 1999, s 5(2) these are my reasons
for my determining that a sentence of imprisonment is required in this case. I
propose to sentence Craig Wright to a term of imprisonment of 28 days.”
This sentence of 28 days imprisonment was suspended on condition that
Craig would perform 250 hours of community service, and he was ordered
to pay the costs of the proceedings.
In a subsequent 2005 appeal against this judgement, Craig did, in fact,
attempt to challenge one particular email amongst the overwhelming
evidence against him, citing a slew of claimed IP address differences and
disputed access to proxy servers as ‘proof’ it was not he who had sent it, in
desperate hope it would magically exonerate him in the face of all other
evidence and reason.
It did not.
Source: http://www8.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWCA/2005/368.html
So, it is this record of dishonesty and desperate reliance on refusing to
recognise the validity of evidence which serves to expose his lies and fraud,
through his attempts to claim that 'it cannot be proven that somebody else
was not responsible for them’, namely, his "I was hacked" go-to, we will see
repeated again and again throughout his subsequent entanglement in the
following years with the ATO, the Kleiman case, the media and the wider
Bitcoin community as a whole.
Craig Wright obtained quite a few IT/Cybersecurity related certificates during his career.
From Craig’s current blog, we learn that he received a “golden handshake”,
by the end of 2008 from his employer BDO, which indicates he was not
leaving voluntarily.
“When I worked at BDO, I took the idea further, and was involved with the
development of computer-aided audit tools (CAATs). I was constantly
surprised by the level of fraud and corporate misappropriation within every
organisation I ever audited. Most issues were very small and added up to be
a material amount.
The launch of Bitcoin occurred when it did not as a response to the global
financial crisis but as I was offered a golden handshake and could leave in
December 2008 and start working on the project in 2009.”
Craig Wright worked at BDO from November 2004 till December 2008
In 2009, Craig raised two Australian companies:
Information Defense Pty Ltd (January 29, 2009)
Integyrs Pty Ltd (May 11, 2009)