Tomáš Jiřikovský, whose name may be familiar from the alleged Sheep Marketplace doxxing1 published by darknet commentator Gwern Branwen, has discovered that no amount of "tumbling" can legitimize unexplained funds to fiat authorities once within their domain. As reported2 today by Hospodárske Noviny, a Czech-language daily newspaper focusing on economic and business matters, Czech police arrested Jiřikovský after the Czech FINCEN equivalent3 tracked millions of Czech Crowns from Bitstamp, Ltd to accounts tracable to him, primarily an Air Bank account recently opened by his wife, Eva Bartošová.
The only public comment from Jiřikovský on the matter was posted in early 2014 to the front page of a hosting site registered in his name, Šnekweb, denying involvement in operating the marketplace4. Though Jiřikovský's explanation may have discouraged internet vigilantes from pursuing the trail, it did not protect him from fiat law enforcement.
How Jiřikovský's activities affected Bitcoin's price, and the implications of his capture for actors such as Verto and Kimble, perpetrators of the Evolution scam, are left as an exercise for the astute reader.
-----BEGIN PGP SIGNED MESSAGE----- Hash: SHA512 On 2 November 2013, I was contacted on IRC by a pseudonymous chatter, "an anonymous security hobbyist". He said he had some information for me if I would swear to keep it secret. I agreed as long as it didn't involve violence like hitmen. He had been impressed by [my bet against Sheep & BMR](http://www.reddit.com/r/SilkRoad/comments/1pko9y/the_bet_bmr_and_sheep_to_die_in_a_year/) and agreed with me that the official Sheep story about `sheepmarketplace.com` was too stupid for words, and wanted to share the info with me. He then told me he had just finished researching Sheep Marketplace and was highly confident that the operator was a Czech programmer by the name of "Tomáš Jiřikovský", and further, earlier that day he had mailed off his results to the FBI. (He also claimed credit for the BMR & PBF leaks.) After reading through his results, checking some of the links to see if they were as described, agreeing with him that Tomas matches the profile for the Sheep operator uncannily well, and reflecting how stupid I was to not look harder at sheepmarketplace.com because as soon as you see the forum posts where Tomas complains about the problems of running a Bitcoin-using hidden service it's completely obvious that Tomas=Sheep, I suggested he contact Tomas. He declined, saying he didn't want to spook Tomas (he is not a big fan of drugs), although he agreed I could release the results within 7 months. The most I managed to get out of him was permission to [post a cryptographic hash precommitment](http://www.reddit.com/r/SilkRoad/comments/1ptd6b/precommitment_proof_of_knowledge_about_a/): $ echo 'Sheep Marketplace was founded and run by Tomáš Jiřikovský (random nonce: 19093)' | sha512sum 43a4c3b7d0a0654e1919ad6e7cbfa6f8d41bcce8f1320fbe511b6d7c38609ce5a2d39328e02e9777b339152987ea02b3f8adb57d84377fa7ccb708658b7d2edc - I was as precise as I could be at the time; saying it was a precommitment to Tomas's identity would have clearly breached the agreement. Anyway, I took his notes, made copies of all the webpages linked in, and prepared a single compilation in MAFF format: https://dl.dropboxusercontent.com/u/182368464/2013-11-03-sheepmarketplace-doxxing.maff The basic overview of the findings: 1. Tomas owns the hosting service for the sheepmarketplace.com VPS server. There were very few domains hosted there as well, and he controlled several of them. 2. The site itself seemed to be very closely connected to SMP, using the same basic technologies and possibly a non-public API 3. The official excuse does not wash as sheepmarketplace.com was set up not long after SMP itself 4. Tomas is the earliest known promoter of SMP (1 February 2013), and recommened SMP & BMR over Silk Road (11 April 2013) 5. Tomas is a C++ QT Nette Framework Czech developer who runs Ubuntu, exactly like the SMP developer 6. Tomas has complained about the memory demand of `bitcoind` on a VPS server, and discussed the difficulties of functionality like email from hidden services 7. Tomas or his girlfriend are active users of Tor, as evidenced by screenshots of their computer 8. it's not clear what Tomas's current job is 9. but it is clear that as of October, he was working on an e-commerce site which was having problems with buggy accounting of deposits 10. Tomas posted a .htaccess file which has the same (buggy) functionality as that of SMP 11. He is an accused Bitcoin scammer A few of these could be explained as coincidence. But all of them? At this point, I would rate Tomas as >75% likely to be involved with SMP in some fashion. -----BEGIN PGP SIGNATURE----- Version: GnuPG v1.4.15 (GNU/Linux) iEYEAREKAAYFAlKaXN8ACgkQvpDo5Pfl1oJ+HwCgnQmvBZFTHkzDEHzayEmrTnjB d+oAnjK0a0UFDwg+wAvkDxsjer6w8rXl =tYBY -----END PGP SIGNATURE-----
Translated by Reddit user karelb (emphasis indicates karelb's commentary):
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 Cadastre with information about real estate ownership – , 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.
Finančního Analytického Útvaru ↩
Good morning dear users,
we were informed before some time, that our webhosting service is accompanied with illegal marketplace Sheep Marketplace. We are webhosting service and sheepmarketplace.com domain had only fanpage on our servers, not a real marketplace.
At the moment we have discovered suspicious content on sheepmarketplace.com domain, we turned off this site. This was happened before two months!
We are very sorry for that, but we realize someone named Karel Bílek (http://facebook.com/syn.bozi or http://karelbilek.com) is gossiping around internet we are owners of SheepMarketplace. Today we have taken legal actions against this person and we will charge him for this gossip.
Best wishes to you and have a nice and quiet holidays.