kleiman v wright satoshi trial 2021

Satoshi Case in Florida: What’s the deal with the ATO documents?

Across three days of Dr. Craig Wright testimony, the jury in the Kleiman v Wright Satoshi Case has seen hundreds of exhibits. Emails, Bitmessages, legal documents, tweets, blog posts and too many other categories of information to list have all been thrown at the jury to try and establish a business partnership between Dr. Craig Wright and the late Dave Kleiman in creating Bitcoin.

But much of the plaintiff’s time with Dr. Wright on the stand has been spent far away from the topic of Dave and Dr. Wright’s work together, instead choosing to take an extended look at a series of audits and investigations done by the Australian Taxation Office (ATO) into Dr. Wright’s businesses in Australia.

Certainly, this detour seems highly relevant to Dr. Wright’s personal life. He explained on the stand this week that since 2006, the ATO had been pursuing him relentlessly to the point that Dr. Wright says he and his companies were audited over 200 times between 2006 and 2013. Dr. Wright has said outright is that the reason is because he has always been up front with them about his involvement in Bitcoin, and that the ATO either didn’t understand it at the time or were openly hostile to the idea of digital money.

On the stand this week, Dr. Wright talked about just how bad the ATO’s “witch hunt” became:

“I was getting 17 audits a quarter. They shut down my companies and didn’t stop until I had to leave Australia.”

There is at least some reason to believe that the ATO’s interest in Wright went beyond the agency’s routine tax administration, as Dr. Wright says it did. The very same day that Wired and Gizmodo outed Dr. Wright at Satoshi Nakamoto based on likely hacked data, the Australian Taxation Office raided Dr. Wright’s home in Australia in an action so big it made national news. The employees of the ATO were among the only people on the planet who knew of Dr. Wright’s claim to Satoshi, and they were ready the moment the tabloid reveal hit the stands.

Why the plaintiffs are so keen to put in front of the jury the copious amounts of material which originate in these vast audits is obvious, even if it doesn’t speak to the relationship between Dr. Wright and Dave Kleiman. Across these years of audits, the ATO has accumulated reams of documents, either evidence they collected as a part of their investigations, transcripts from interviews with Dr. Wright and his lawyers and what appear to be detailed adverse rulings against tax positions that Dr. Wright had taken.

In other words, it’s a ready-made package of materials which were collected with the express intention of proving Dr. Wright to be a tax dodger at the very least. It is a gift for any lawyer with Dr. Wright on the stand.

It’s worth pointing out that like most of this case, there is frustratingly sparse and incomplete evidence about the extent and nature of Dr. Wright’s dealings with the ATO. Transcripts are incomplete or contain obvious transcription errors, documents which purport to be from the ATO are missing seals or headers, and there’s generally a lack of independent authentication for many of the documents which were supposedly provided by the ATO to Ira Kleiman.

This is a problem for the plaintiffs because there’s also evidence on the record that gives reason to doubt what evidence does exist relevant to the ATO question.

For example, the interview transcripts on the record show counsel for Dr. Wright in Australia confronting an ATO representative about an adverse ruling against a tax position that one of Dr. Wright’s companies had taken. The ATO insisted this ruling was issued, but it turned out there was never any record of it, while an actual ruling which the ATO initially said they had given in September was claimed by Dr. Wright to have been created in November and backdated. Dr. Wright produced expert witnesses in the course of the ATO’s dealings with him who opined that emails allegedly sent by the ATO to Dr. Wright had been tampered with: for example, the expert identified anomalies which indicated that emails were not sent on the dates they were timestamped.

Another episode from this week’s testimony demonstrated this, too. One of the documents that was produced at one of Vel Freedman’s Socratic peaks was a letter from Andrew Sommer, a partner at law firm Clayton Utz who was representing one of Dr. Wright’s companies in the ATO investigation. Sommer informed them that the firm would no longer be able to represent them because “information has been provided to our firm which raises serious questions about the integrity of documents provided by Dr. Craig Wright, both to our office and to the Australian Taxation Office.”

Both Dr. Wright and his wife Ramona Watts have maintained since their first depositions that this was the result of pressure improperly exerted on Sommer by more senior lawyers within the firm in an effort to protect the lucrative work that the firm had with the ATO.

In fact, Dr. Wright’s wife Ramona Watts testified in her deposition that the letter was preceded by a phone call from Sommer:

“…he said: I’ll be sending you a letter that’s quite standard, and it’s going to sound awful, but this is my position because I have been told from the top.”

It is convenient, but it’s also in keeping with the relationship between Sommer, Dr. Wright and Watts. In another private email, which also preceded the formal termination letter, Sommer said he felt obliged to reach out to them personally because of the “great regard” he had for the both of them.

A lot of the documents originating in the ATO web of investigations and audits were thrown at Dr. Wright in this way, and the response was more or less the same: this transcript has no seal so can’t be authenticated, that ATO ruling has no heading whatsoever and might as well have been taken from the bottom of the courthouse printer tray.

All of this evidence was the subject of a hard-fought pre-trial battle by Dr. Wright’s side to have it excluded at trial. In addition to complaining that the documents could not be authenticated, they argued that the probative value of the documents are greatly outweighed by the prejudicial effect documents of this nature are likely to have on the jury.

But after that skirmish and having now spent days of Dr. Wright’s time under oath presenting and re-presenting documents relating to the ATO investigation, it does beg the question: what’s the point of all this? There’s a conspicuous lack of any representative from the ATO on the witness list, so the deficiencies in the documents which are supposed to have come from them aren’t going to be resolved in any way. There might be things in that bundle of documents that Dr. Wright can’t explain—given how long ago these audits took place and how many there were, there are probably many. Some of these things might even relate to Dave Kleiman.

Unless any of those things can be shown to be both authentic and proving of Dave’s contribution to the invention of Bitcoin, it’s all ultimately just noise. After all, isn’t that the reason Dr. Wright is in court in the first place?

CoinGeek will feature Kurt Wuckert Jr. in daily recap coverage which will be livestreamed on a daily basis at 6:30 p.m. EST on our YouTube Channel.

Check out all of the CoinGeek special reports on the Kleiman v Wright YouTube playlist.

New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.