Better late than never, but justice has been served – According to a report in archiv.ihned.cz, The owner of Sheep Marketplace Thomas Jiřikovský – who was responsible to one the biggest exit scam in Dark net history of around $40M at the time (when the Bitcoin value was extremely high) was arrest for money laundering after purchasing a luxury house and trying to launder the stolen money, after converting it from BTC, using fake companies and transferring it to his girlfriend account.
Full Translation of the Czech article:
Notes about the translation:
The article is a bit confused, mixing narratives together – mixing official “sheep market” narrative (meaning, someone external stole it) with Tomáš’s official narrative (“I had nothing to do with it, it was on my server by acciddent”) and with police story (“he has the money, we proved it”). It also doesn’t really mention it was darknet marketplace with drugs, it only mentions that it was “an online marketplace”, and it says that Tomáš was the hacker that stole the money – but again it’s a confused article in general. So at times it doesn’t make that much sense; I think that’s because the reporter didn’t really follow the case that well and mixed stuff together. Anyway, let’s do this.
How the bitcoins were laundered: millions from abroad, a house written* on granddad
(*note: this idiom – “written on somebody” – means in Czech “officially owned by”, “officially done by” – as in, officially granddad owned it)
- Police officers blocked house costing 8.7 million Czech Crowns bought by Czech programmer for suspicious bitcoins
(note: all amounts are in Czech Crowns, 1 million is 36.300 eur / 39.000 usd, 8.7 million is 316.000 eur / 340.000 usd)
- Czech from Hodonin (city in Czech Rep.) area is being investigated for stealing money from online market, from which 100 million Czech crowns disappeared
- Czech criminals are increasingly using the virtual currency for saving their gains, say Ministry of Finance dirty money detectives
Laundered house: villa in Lužice [<- a small town] is, according to police, a “proceed of crime”. It was supposedly used for laundering dirty money. That’s why police seized it.
Last year in January, a new bank account of 26-years old Eva Bartošová had a payment, that made Air Bank (Czech Bank) safety controls flash (an idiom). Almost 900 thousand Crowns from a foreign company that exchanges virtual bitcoins into real money.
The young woman could not credibly explain to the bank officers the source of the money. Only additional investigation revealed that millions already went using this road. And that behind it was a certain Tomáš Jiřikovský, that was connected by amateur internet investigators with stealing money from web marketplace Sheep Marketplace, where people traded in large numbers with the bitcoin currecy. The damage was described by the operators of the marketplace as more than 100 million.
(My note to the above: as I said, the article is confused.)
According to HN (<-short for the news name, Hospodářské Noviny), police officers seized his house near Hodonín, that he bought for bitcoins and that he wrote on his granddad.
“The case is in a phase where we cannot comment”, told Petra Vedrová, a police spokesman for South-Moravian district.
Profesor signed, grandson paid
The story can however be reconstructed from documents saved on cadaster (note: I don’t know how is it in other countries; in Czech we have a cadaster with information about real estate ownership – http://en.wikipedia.org/wiki/Cadastre , and it’s perhaps suprisingly public and open). According to the decree about seizing the house with a pool and garden in the town of Lužice the police officers wrote, that the programmer Jiřikovský and his wife Eva Bartošová (note: the girl from earlier) from laundering dirty money. The 8.7 million, that was used to buy the house, can be from the funds stolen from Sheep Marketplace.
“Your money, our provisions, all were stolen”, wrote the operators of the marketplace on their web not long before they had to close it two years ago. They thought that someone found an error in the system and took 5400 Bitcoins. According to the exchange rate at the time, around 109 millions.
(My note: Again, they are confused and keep on writing that sheep was some legit online marketplace and Tomáš is the hacker that stole money from it.)
The officers of Ministry of Finance’s Financial Analytical Office, that are detecting suspicious transactions, mapped how the Jiřikovský’s money travelled. They first left from the abroad company Bitstamp Limited, that is selling and buying bitcoins. The millions then arrived with several transactions either on the account of Jiřikovský and Bartošová, or on the account of the real estate company and the lawyer that worked on the house sale. Part of the money went to the original owner of the house, another part of the money went on her bank as one-time payment of a mortgage.
The house is however in the cadaster written on Jan Goliáš, a granddad of Jiřikovský, that added no money to the transaction. That it was just an effort to conceal the real owner is demonstrated by the police by the fact that Jiřikovský was the one that insured the house.
“The real estate properties were fully paid by the finances, acquired by the transactions of the virtual currency bitcoin,” say the detectives. Jiřikovský, according to bank data, took 839 thousand Czech crowns in cash from bank. Again from bitcoin.
The mobile number, that was used by Jiřikovský before, is owned by somebody else. HN tried to contact his wife through Facebook – but without a reply. And his granddad Goliáš was not available in his office on Mendelev University. On this university the 74-yeat old professor works as a renowned expert on fruit production
(Note: the next two paragraphs are writtten very confusingly.)
Jiřikovský never talked publicly, at the time of the Sheep Marketplace affair he made an announcement that he only allowed the so-called webhosting – meaning that for money he allowed place and service for other internet pages. Even a website that a fans of Sheep Marketplace made. But he had nothing to do with the market.
When Jiřikovský found in the fall 2013, that the web is illegal, he turned it off. He did not expand on why it would be illegal, but it could have something with drug selling, that people today sometimes buy with bitcoins.
Key question: the money origin
Because of the police silence we cannot tell, how deep are the police officers in the case. If they only investigate money laundering, or if they want Jiřikovský for his role in stealing money from the marketplace.
They should, because so-called “legalization of procceeds of crime” can only be proven if the police officers clearly name the exact crime where the dirty money comes from.
In the past the detectives thought that they are on a trace of 5.3 billion laundering in Prague exchange. They stopped the investigation of the owners – they couldn’t prove that the money were dirty. (not sure if they are talking about BTC exchange, probably not, the money is too big for that and this paragraph is kinda irrelevant)
The worldwide trend of dirty money ending in bitcoin more and more is confirmed by the Ministry of Finance specialists.
“We detected a growth of suspicious trades, where the gains from criminal activity end up in virtual currency,” warned last year annual report of Financial Analytical Office.
Full details about the Sheep marketplace scam can be found here (among some other details)
This was the doxxed owner of sheep that turned out to be the real person behind the market:
In Dec-2013, during a media interview – Thomas denied being the person responsible for the Sheep Marketplace scam, Thomas was never arrested until know, even though that his name details were well known and reported to the Czech police soon after the scam.
Some more pictures of the house he bought using the stolen BTC: