'Fanciful' bitcoin blackmailer jailed

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Napier man Gregory O'Neil was jailed for attempting to blackmail companies. Photo / Duncan Brown
Napier man Gregory O'Neil was jailed for attempting to blackmail companies. Photo / Duncan Brown

A Napier man alone with a computer and nothing better to do than attempt to extort millions of dollars of internet currency bitcoins from major New Zealand companies, has been jailed.

Appearing in Napier District Court today, Gregory David O'Neill, 56, was sentenced to five years and seven months, having previously pleaded guilty to eight charges of blackmail.

It stemmed from what lawyer Eric Forster said was a "fanciful" spate of crime in which O'Neill had little or no intention or means of carrying out his threats if the companies didn't pay-up.

In a rare move, Judge Geoff Rea read to the court one of the letters sent by O'Neill on August 14 last year, but has suppressed any details leading to the identification of the companies, including the nature of their businesses.

The ordered letter of 22 paragraphs and about 400 words used the reference "we" and claimed to be from an unnamed group, recipients being told if there was a need for further communication "we" would include the words "people not profit."

It opened: "The contents of this letter are to be taken seriously, we are absolutely determined in our demands and all threats will be carried out if our demands are not met."

"We have no hesitation at all following through with our threat and will not hesitate to do so in your country," it continued.

The letter writer demanded 100 bitcoin deposits and full payment of 500 bitcoins by the end of the month, to prevent a campaign of sabotage over anything up to the next three years and three months.

It said if the full payment deadline wasn't met "we" would begin to carry-out the threat, and it would cost 1000 bitcoins to stop, and it also threatened to enact the threat if any of the bitcoins or the "bitcoin wallet" were tracked or monitored.

It further threatened to contact "various media" to inform them of "our threat" and the company's stance if demands weren't met.

The tradeable value of 50 bitcoins at the time was about $410,000, Crown prosecutor Steve Manning had told the Judge, who calculated the sum sought in each letter to be worth about $3 million.

Judge Rea said receipt of the letters could only be described as "chilling", as the companies decided what to do in the face of threats against their own operations and risks for New Zealand in general.

It was regarded as les serious than the offending of Auckland man Jeremy Kerr, who was last year sentenced to eight-and-a-half years on two charges of similar blackmail, but which involved distribution of laced material and appeared to target a rival business.

Judge Rea said that while O'Neill may not have had the means to carry out his threats, it was not such a "wake-up call" as suggested by his lawyer, and the companies were entitled to have taken the threats seriously.

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