Craig Wright's tangled web - part 1

Contributed by: PM Saturday, July 20 2019 @ 04:19 PM UTC

Craig Wright's schemes fall, in my mind, into three entangled but separate stages. The first is where Craig takes control of W&K Info Defense Research LLC, a company that belonged to his dead best friend, and uses this to give himself court-sanctioned control of multi-million dollars worth of alleged Intellectual Property. The second stage is where he uses this alleged property to trade between various companies he owns and claim R&D and/or tax rebates from the Australian government. Emerging from both of these is the third stage where he goes into full "billionaire mode", claiming to be Satoshi Nakamoto.

This article covers the first of those stages - the illegitimate takeover of W&K and the creation of a vast fortune of non-existent IP.

2011

• 14th February 2011
  Dave Kleiman forms[*1] W&K Info Defense Research LLC[*2] . Dave is listed as the sole member of the corporation, as a "manager / member" (MGRM). Nonetheless this does appear to be a joint venture between Dave Kleiman and Craig Wright, hence the W&K from their initials.
• 2nd March 2011
  The purpose of W&K at this stage appears to be bidding on government research projects. W&K submits four proposals to the US DHS BAA program:

  BAA Number	Title	Cost
  BAA 11-02-TTA 01-0127-WP	Software Assurance through Economic Measures	$650,000
  BAA 11-02-TTA 05-0155-WP	SCADA Isolation	$1,800,000
  BAA 11-02-TTA 09-0049-WP	Risk Quantification	$2,200,000
  BAA 11-02-TTA 14-0025-WP	Software Derivative Markets & Information Security Risk	$1,200,000

• 31st May 2011
  Unfortunately all four of the proposals were rejected[*4] by the DHS, so W&K did not receive any of the money they hoped for to fund this research.

2013

• 26th April 2013
  Dave Kleiman died[*5] in his home in Florida.
• 29th April 2013
  Craig posted[*6] an emotional video in tribute to his dead friend. A watchable version is available here[*7] .
• 25th July 2013
  Craig filed a Statement of Claim to the NSW Supreme Court in Australia, suing W&K for $28,254,666! This incredible claim states the following:
  • Craig gave $20,000,000 worth of bitcoin and gold bonds to W&K, as a "bond"
  • Craig implemented the four DHS BAA projects that were rejected by the government
  • Therefore W&K owes Craig $5,850,000 + $1,701,633 in interest for those projects
  • W&K has to repay the $20,000,000 that Craig "loaned" to it
  • "The contract stated that a breach would lead to liquidated damages to the amounts stated as the project limits. If the liquidated amount is not paid all IP returns to the sole ownership of the plaintiff"
  That last point is important. Craig had no intention of recovering the £20,000,000 he'd supposedly given W&K, since this money never existed. He wants a legal claim to some "IP" that also never existed.
• 13th August 2013
  Doubling down, Craig filed another claim[*8] in the NSW Supreme Court, for $28,534,049.79! (An amount almost identical to his first claim.) This claim doesn't make much sense, but it alleges:
  • Craig loaned W&K bitcoin, worth $13,917,775 at the time the claim was filed
  • Craig conducted "a project for the development of a Bitcoin SDK and exchange"
  • "The IP is software and code used in the creation of a Bitcoin system"
  • Craig also supplied another $20,000,000 as a "bond"
  • Once again, "the contract stated that a breach would lead to liquidated damages to the amounts stated as the project limits. If the liquidated amount is not paid all IP and systems returns to the sole ownership of the plaintiff."
  So Craig is suing his dead friend's company for almost $57 million, but he is willing to accept some "IP" in lieu of all that money. There is no indication of what happened to the cold $40M "bond" money that was supplied as bitcoin and gold bonds. Since Dave was dead at this point, how could Craig get what he was after?
• 16th August 2013
  It's not clear if this actually happened on this date, but it is what Craig claimed later. Craig appoints his employee Jamie Wilson to be a director of W&K. He held a "board meeting" on this date with just himself and Jamie present, and then he voted "yes" for Jamie to become a director.

  Jamie "will act as director for the purposes of consenting to orders and the company to be wound down". "It was agreed that following the motion to accept the debt owed by the company (W&K), it would be closed."

• 19th August 2013
  Craig now decides that he can represent W&K in the legal action he is taking against the company. He filed two Acknowledgements of Liquidated Claim[*9] to the NSW Supreme Court, where he is listed as both the plaintiff and defendant! In these he effectively admits that his claims for $57M are valid.
• 28th August 2013
  Craig files Consent Orders[*10] to the NSW Supreme Court, basically stating that W&K accepts the claims for $57M against it, and agreeing to provide "intellectual property" instead. These consent orders are signed by Jamie Wilson on behalf of W&K.
• 4th November 2013
  Craig submits an affidavit[*3] to the NSW Supreme Court, describing the "board meeting" that took place on the 16th of August.
• 6th November 2013
  The NSW Supreme Court finds in favour[*11] of Craig against W&K, since W&K allegedly consented to this action. Craig is awarded the ~$57M he was claiming for, except "the court notes the agreement of the parties that the plaintiff will accept the transfer of Intellectual Property held by the plaintiff in full and final satisfaction of the judgement".

So what was the point of all this? Craig alleges that he provided over $40,000,000 in bonds and loans, and worked for years on various DHS projects and Bitcoin code, and he's willing to walk away with only the rights to some unspecified IP. The point is that he now has "evidence" provided by the court that he owns over $50M worth of IP. He can now sell that "IP" to his various Australian companies, and claim tax and R&D concessions based on this. That's the subject of the next post in this thread...

Craig Wright's tangled web - part 1
https://satoshi.itch.es/article.php?story=20190720161936496

[*1] https://www.courtlistener.com/docket/6309656/1/4/kleiman-v-wright/
[*2] http://search.sunbiz.org/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=EntityName&directionType=Initial&searchNameOrder=WKINFODEFENSERESEARCH%20L110000199040&aggregateId=flal-l11000019904-dce79b55-176a-4442-93a7-3c8896316aa2&searchTerm=W%26K%20Info%20&listNameOrder=WKINFODEFENSERESEARCH%20L110000199040
[*3] https://www.courtlistener.com/docket/6309656/24/4/kleiman-v-wright/
[*4] https://www.courtlistener.com/docket/6309656/24/21/kleiman-v-wright/
[*5] https://en.wikipedia.org/wiki/Dave_Kleiman
[*6] https://web.archive.org/web/20130509011754/https://www.youtube.com/watch?v=pGmZ7v3TB2Y
[*7] https://youtu.be/uVtOkE5vHbY
[*8] https://www.courtlistener.com/docket/6309656/24/11/kleiman-v-wright/
[*9] https://www.courtlistener.com/docket/6309656/24/30/kleiman-v-wright/
[*10] https://www.courtlistener.com/docket/6309656/24/19/kleiman-v-wright/
[*11] https://www.courtlistener.com/docket/6309656/24/22/kleiman-v-wright/