Faketoshi, The Early Years Part 2
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
We hope you truly enjoyedFaketoshi, The Early Years Part 1. Lets
recap Part 1 for a bit before we continue with Part 2.
2003–2006
Craig Wright abandons his own consulting company when a new
shareholder hed persuaded to invest in it discovers that the financials dont
add up. Then sets about poaching his old clients from under the new
investor and winds up in court on breach of contract.
Court orders him to stop approaching clients — ignored, Court finds him
guilty of contempt, the judges sentence him to 28 days imprisonment,
suspended on condition that he performs 250 hours of community services,
and Craig is ordered to pay the costs of the proceedings.
Thus begins a decade-long pursuit of Craig by the lawyers for his old
company for recovery of hundreds of thousands of dollars in debt he owes.
2009
Craig incorporates two business entities and sets about filing specious
claims for tax rebates on ten-years worth of ‘Intellectual Property’ derived
from his university studies which he insists were purchased for millions by
these two companies, directly from him.
2010
The Australian Taxation Office (ATO) find Craig Wright’s claims suspect and
conduct an audit and interviews, looking deeper into his tax returns and
business activities — none of these returns or business activities, records
and transcripts from the time show, cite Bitcoin in any capacity whatsoever.
2011
Craig Wright and Dave Kleiman attempt to land four US Department of
Homeland Security (DHS) contracts and set up a US business entity (W&K
Info Defense Research LLC) in order to handle the application process
through — all four are rejected outright by DHS. The US company that Dave
had incorporated has no further purpose and is left to be automatically
struck off the active register by administrative dissolution.
2012
Having recently learned of the existence of Bitcoin, Craig floats the idea of
setting up some sort of Bitcoin bank. Long on ambition, but short on
viability, it doesnt progress anywhere as an actual project.
2013
In April of this year, Dave Kleiman dies and Craig almost immediately seizes
on the opportunity to re-write the nature of their past dealings, by filing two
massive claims in NSW Supreme Court of almost $30 million each against
their, dormant and defunct, US company ‘W&K Info Defense Research LLC’
which they’d solely used to file their rejected applications for US DHS
contracts. The court relies on Craig’s own declaration and valuation of the
company’s supposed assets and debts owed to him and, as the legal action
is uncontested (as Craig was basically suing himself, with backdated ‘help
of at that point in time ex-CFO Jamie Wilson), it rules in his favour,
whereupon he promptly adds the value’ to his rebate scam.
To load up the value of his intra-business transactions even more, he
introduces the notion that purchases across his companies are being made
through Bitcoin instead of bank deposits and transfers. For this he
apparently finds public addresses on the Bitcoin blockchain and starts
declaring to the tax authorities that he has been mining and buying Bitcoin
since 2009 and that he owns and controls the multiple Bitcoin addresses
hed submitted in his bookkeeping records to the ATO. A notable moment
arrives by the end of 2013 when the ATOs Refund Integrity department
launches their next audit of Craig’s tax rebate claims which, unlike
previously, now contain supposed Bitcoin-related transactions.
February 2014
The ATO is becoming more and more sceptical of these multi-million-dollar
transactions he is claiming took place for which he has filed for massive
amounts in GST and R&D rebates. Their audit of Craig finds that 94% of his
income or that of his business entities over the prior two years is derived
from these tax rebates. ATO wants proof the Bitcoin transactions took place
but he, instead, insists that no Bitcoin was actually ‘paid’ in a regular on-
chain transaction, that these business dealings were conducted by drawing
up a document of a ‘transfer of value’ where the purchaser of the product or
service could ‘call on’ the value of the Bitcoin held in trust.