Saturday, October 21, 2023

The fake hitman, the crypto king and wild revenge plan gone bad

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The fake hitman, the crypto king and a wild revenge plan gone bad

Kobus Steyn thought he’d found a whale of a client. Then his assignment turned from make-work to murder

For Kobus Steyn, the job was clear enough: put together a team to locate and surveil a vice-admiral in the Thai navy and then, when the opportunity arose, kill him. 
Steyn, a gruff 60-year-old with a slightly greying full head of hair, tired deep-set eyes and a square jaw, had spent more than three decades in clandestine security work. In his native South Africa, the former policeman had been involved, by his own account, in some shady operations as the country transitioned from apartheid. Later, he’d set up a private firm that investigated everything from failed marriages to corporate fraud. He even taught security management at the University of Johannesburg for a while before deciding that the land of his birth no longer valued his expertise.
Steyn had settled in the tiny, oil-rich monarchy of Brunei, in south-east Asia, where his wife found a job teaching English to the children of the local elite. While the work during his policing career had been highly physical, Steyn now mainly operated from behind a computer screen. He built himself a network among the South African diaspora, most with military or law enforcement backgrounds, which he could call upon for help. One day in early March 2020, an old police colleague phoned Steyn, saying that he was working for a German guy in Central America who had a problem across the world in Thailand. Would Steyn be available to take on a job there? 
On a conference call the next day, Steyn was introduced to a wealthy German engineer and entrepreneur named Rüdiger Koch. In his mid-fifties, powerfully built with a girth suggesting he enjoyed a beer or two, Koch stumbled into bitcoin in the early days when it was trading at less than $5. Crypto’s take-off in the intervening years had made him rich. He explained that he wanted an investigation carried out into the alleged sale of illicit diesel in Phang Nga Bay and the Andaman Sea. The German believed senior members of the Thai navy were involved in a scam. Koch was ready to pay Steyn’s expenses, travel and lodging, and was offering a $40,000 completion bonus. Steyn accepted the assignment, and the two men agreed on a daily fee of $300 to cover outgoings. 
It was left to the friend who had introduced the two men to explain to Steyn what had happened to Koch in Thailand a year earlier. Those events and their consequences proved more convoluted and unhinged than Steyn could have possibly imagined. A trove of thousands of voice and text messages, with accompanying documents and photos, spanning three years and reviewed as part of a Financial Times investigation, indicate that Koch had become deeply paranoid. In the communications, Koch muses on imprisoning, torturing, even executing people who might have stood in the way of his metastasising desire for revenge. Koch did not respond to multiple emails requesting comment and, when reached by telephone, he ended the call when asked to respond. Messages between the two men were shared with the FT by friends of Steyn, who said he feared for his wellbeing and that of his family after falling out with Koch. Going public now would offer some protection, they hoped.

The pod was anchored 14 miles off the coast of Phuket in the azure waters of western Thailand. Designed and built by Koch, the cramped hexagonal living space of about six square metres was perched atop a huge, partially submerged spar buoy, adopting a maritime engineering principle typically employed in offshore oil rigs and wind farms. It would become a temporary home to a 49-year-old former bitcoin trader named Chad Elwartowski and his Thai girlfriend, Supranee Thepdet. The pod was christened XLII, or 42 in Roman numerals, a reference to Douglas Adams’ TheHitchhiker’s Guide to the Galaxy, in which the number is said to be the answer to the meaning of life.
The pod’s true purpose, when it was christened in early 2019, was to make good on a long-held dream, some might say fantasy, of neo-libertarians and techno-futurists. More than a decade before, Silicon Valley titan Peter Thiel helped found the Seasteading Institute, along with Patri Friedman, the grandson of economist Milton, aiming to promote experiments in “homesteading the high seas”. The idea was that nasty taxes and governmental oversight could be side-stepped by living in international waters, beyond the control of any individual state. 

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These illustrations do not depict actual events or individuals. They are an artist’s interpretation of scenarios imagined in this article
Elwartowski, a former defence contractor and software engineer, became enthused by the idea after hearing Friedman speak at a crypto conference. By 2017, Elwartowski was in French Polynesia and involved in an initiative known as the Floating City Project. He’d hooked up with Thepdet, a social media influencer and crypto enthusiast. While the Floating City idea flopped, Elwartowski got to know Koch, who was then living in Thailand. Conversing online in a forum for libertarians, Elwartowski believed he’d found a genius in Koch, whose background in mechanical engineering seemed to have armed him with creative ideas to solve thorny seasteading problems.
Koch had already built a spar that he wanted to float off the Thai coast as part of a personal project focused on creating a “launch loop”, a theoretical (and possibly fantastical) system for launching objects into orbit, without rockets. Seasteading, Koch figured, was an obvious alternative application for his technology. The trio agreed they would seek to be the first to truly test seasteading in practice.
Small as it was, the pod they prepared to launch two years later was seasteading’s slightly roomier equivalent of the Vostok 3KA space capsule that housed Yuri Gagarin during the first manned space flight. But XLII was also a “big [middle] finger . . . to all those out there who want to control other people’s lives through force,” Elwartowski declared in a YouTube video. By early February, the team was cracking the champagne and streaming live to a Seasteading Institute party in San Francisco. Joe Quirk, the institute’s president, visited the pod to record the joyous occasion, capturing the pioneering couple dancing on the top deck of the structure. “You cannot buy this view,” Thepdet declared. “You can see the sun set and the sun rise and see the thousand million stars.” Elwartowski promised to “build many more, based on what we’ve learnt with this prototype . . . We’re looking for freedom-loving people to come join us.” Koch was on and off the pod at this time, popping over from Phuket by boat for visits.
Eight weeks later, the novelty started to wear thin. Articles began to appear in the Thai press questioning whether the experiment amounted to a challenge to national sovereignty. A media firestorm ensued, with furious denunciations from politicians, the military and a host of talking heads on TV. Thepdet, a Thai national, was branded a traitor, with commentators frequently noting she might be subject to the death penalty if and when she was apprehended. Koch watched with alarm as the project was condemned. 
© Butcher Billy
Tipped off about a likely military intervention, Elwartowski and Thepdet, along with Koch, fled by yacht — first to Malaysia, where they were denied the right to disembark, and then to Singapore. Back in Phuket, meanwhile, Thailand’s Third Naval Area Command sent a flotilla of three vessels, led by the HTMS Sriracha, to board and search the deserted pod. Then they towed the whole once-in-a-generation experiment in radical freedom back to shore.
A year later, Koch was still furious about the debacle, which had cost him about $150,000. With Steyn on his payroll, he wanted to know who among the Thai authorities was responsible for what he considered to be an outrageous act of aggression against an innocent residential vessel. Was there a warrant in Thailand for his arrest? Which local politicians were involved? What was the name of the prosecutor on the case? Each new answer Steyn provided proved a step deeper into the maze of Koch’s desire for vengeance. 

Steyn’s original assignment, to discover evidence of supposed corruption among Thai naval officers, arrived just as Covid-19 hit in March 2020. It would be another 10 months before he actually made it in to Thailand. In the meantime, there was a ton of media material to go through related to the XLII affair, which could be done remotely. Steyn briefed his client and took new instructions via Signal, the encrypted messaging app. 
Koch was 11,000 miles away in Panama, where he’d co-founded the company Ocean Builders with Elwartowski and a Canadian tech entrepreneur named Grant Romundt. They planned to design and build homes for individuals wanting to live offshore. Steyn was only able to ferret out bits and pieces about his new client’s past. In conversation, Koch boasted of extensive military experience, which Steyn doubted. Online records indicated that Koch had worked as an IT consultant in the banking industry, having first got a masters degree in mechanical engineering from the Technical University of Braunschweig. Crypto had changed the trajectory of his life, and he was reportedly the founder of the first Africa-focused crypto exchange, Fikisha Africoin, which has since disappeared from the internet. With the price of bitcoin having risen ten-thousand-fold since Koch bought in, there was every reason to believe he was worth double-digit millions of dollars.
Steyn often provided Koch long readouts of his findings about the pod raid by the Thai navy, written in a clipped style that reads like a cross between Columbodialogue and blurbs from Soldier of Fortune video games. Steyn thought he had some reassuring news for his boss: the interest of Thai authorities was focused solely on Elwartowski and Thepdet. Koch was not named and not a person of interest to local police. But Koch abruptly dismissed the information. 
Steyn found this reaction a little odd, but his priority was keeping his client happy and engaged. The ex-policeman was using the Signal messaging app on his desktop computer, enabling him to pump out detailed reports at speed. Koch, on the other hand, was mostly sending short, sometimes garbled, responses from his phone, which he supplemented with voice messages. 
Some of them elaborated on Koch’s new fascination which, by the standards of committed seasteaders, was in fact an old fascination. Since the earliest days of the movement, the idea of recommissioning a cruise liner had seemed the fastest route to libertarian utopia. Trouble was, they were expensive and various hare-brained, ship-based plans had come to nothing. Then Covid hit, bringing the price of cruise ships down dramatically. 
In October 2020, Koch, along with Elwartowski and Romundt, purchased an ex-P&O Cruises vessel at the knockdown price of $9.5mn. The plan was to take ownership of the 70,000-tonne ship in Cyprus and sail it to a new berth in the Gulf of Panama, where it would serve as a liveaboard crypto trading venue, with 777 residential units on 14 decks. The Panamanian government, with its tradition of looking the other way on unconventional arrangements, was seemingly more amenable to the kind of experimentation that had flopped so badly in Thailand.
Koch flew to Limassol to join the ship on its maiden voyage under a new name, the MS Satoshi, named after the bitcoin creator. It should have been a moment of transcendence for Koch, a chance to overwrite the pod disaster. But chat transcripts and voice messages between Koch and Steyn indicate that Koch believed Thai authorities would somehow try to scuttle the venture. Thai agents had been sent to Cyprus to stop him, he mused to Steyn, after two trespassers were found at the dock. “I have to assume that they are assassins,” Koch said. “But if that is the case, I will invite them for a chat in the machine shop of the ship.” Later, he reported that an intruder had been detained in the ship’s brig. 
“Was this guy part of the crew?” Steyn asked. 
“No. Entered over the mooring lines,” Koch replied. “All on cam . . . ”
“The only way to deal with a threat like that is to eliminate it completely,” Steyn advised. “Do not play games with the scum. Get rid of him.” 
A couple of days later, Koch sent an update: “Let him go. Was ex crew trying to steal. Normal burglary.”
Among seasteading enthusiasts, the excitement about the crypto ship was intense. A slew of promotional videos and a marketing website promised it would be for “everyone from digital nomads to YouTube influencers, start-up teams and established businesses”. Friedman took to Facebook, boosting Ocean Builders by name and adding: “So glad liberty activism has advanced from Guy Fawkes violence to peaceful exit!” He posted too soon. 
Rather than Thai secret agents, the project was scuppered by international maritime law. The global cruise business is one of the most closely regulated industries on the planet. By the time Koch and his cohorts were halfway across the Atlantic, the reality that keeping the MS Satoshi shipshape and legally compliant would prove ruinously expensive had become apparent. Insurers were not keen on covering a floating crypto-trading venue, and the Panama Maritime Authority was reluctant to classify the MS Satoshi as a non-seagoing vessel, which might have reduced costs. Docking the ship at a port near the Panama Canal, the venture was abandoned and the MS Satoshi sold. It was a setback for the seasteading movement. But for Koch, it was yet another public relations disaster and humiliation that stoked his resentments.

By early 2021, Steyn had established himself in Phuket. Even before he’d landed on the island, known internationally for its hedonistic beach scene, it had become clear that the original brief was only of peripheral interest to Koch. His real obsession was senior members of the Thai navy, in particular Vice-Admiral Sittiporn Maskasem, the man most publicly associated with the impounding of the XLII pod. 
In Phuket, Steyn found that a loose network of informants focused on trailing the vice-admiral and his staff already existed. Koch had been bankrolling them since the XLII project. Steyn’s job quickly became professionalising this network, making sure they got paid and collating all the information gleaned as a sizeable team followed Maskasem around Phuket on scooters. Koch was prone to responding to Steyn’s reports with long voice messages, making grandiose claims and bombastic threats. In April 2021, Koch declared that the Thai authorities “need to learn their lesson . . . You have to realise you are a single fucking human, even if you are an admiral. And we’re coming for you.
“This is not an army we are fighting,” Koch went on. “This is a mafia. The Thai vowed eternal war against us. They excluded all amicable resolutions. Eternal war it is.”
Steyn’s responses would often simply join the flow of conversation sent by his client. On other occasions he would push back. In May 2021, for instance, Steyn fired off a 500-word note, concluding: “There is no police action against you or Ocean Builders for that matter. The main complaint was against [Elwartowski] and [Thepdet] . . . I also told you before that [Maskasem] was not the main architect of the events . . . He was an order taker and acted on instruction of his superiors.”
Despite cultivating the language of an international hitman, Steyn had never actually heard of people being “eliminated” in the private sector. No one had asked him to murder someone before. But, with Koch, he was actively discussing the pros and cons of various assassination plots. He estimated that a drive-by shooter would cost about $1,500. The texts and voice messages are peppered with references to armour-piercing bullets and the limitations of laser sights, as the two men apparently tried to impress each other. In retrospect, many of the conversations read more like the fantastical pre-mission briefings in the blockbuster Hitman video games than the dialogue of two adults.
Steyn, according to those who know him, says he never had any intention of carrying out such plans. But he has never clearly articulated why he engaged in the conversations, other than indicating that at some point he hoped to soften Koch’s objectives. Still, texts and voice messages show that, earlier that year, a price for Maskasem’s head had been fixed between the two men: the equivalent of $500,000 in crypto at the time. 
Koch would later veto the idea of shooting Maskasem as he travelled by motorcade: “No high-power guns. No explosives,” he wrote in July 2021. “We can’t shred a car convo with an M2 in downtown [Bangkok],” before following up with a voice message: “We need to hurt these guys; we need to cause them pain.” On the messages, Koch’s voice comes through between breathy pauses, thickly accented and sometimes eerily deadpan. “Only then will they move to a reasonable stance. I will essentially own this country.”
Communications from around this time also suggest Koch was suffering paranoiac episodes. In Panama, an associate had reported to Koch that two unidentified men had been making inquiries about him and trying to find his home. When Steyn heard about it, he offered to put together a security team to travel to Panama. But Koch declared he was moving to a new location each night for his own protection, while also spiking his apartment with an unspecified lethal substance. “Anyone coming in here is going to die,” he told Steyn. The two men turned out to be legal couriers, trying to serve Koch papers as part of a dispute involving the MS Satoshi.

At dawn in Phuket, Steyn’s phone pinged with another message from Koch, who’d fired off something in anger at the end of the day in Panama. “We still have not dealt any measurable damage to the enemy,” Koch wrote in early 2022. “How long do you expect me to play this game? All I am doing is pumping money. Zero result.”
A constant theme in the conversations during this period is financing. Koch repeatedly refers to “the bloody money thing” in response to Steyn’s pleas for cash. During his early days in Phuket, Covid lockdowns meant Steyn was able to stay in high-end beach hotels at knockdown rates. Shops and bars were closed, rendering the raucous centre of the local sex industry, Patong’s infamous Bangla Road, all but tourist-free and without its trademark neon glow. But as restrictions lifted later in 2021, the go-go bars and massage parlours re­opened, visitors returned and hotel prices rocketed.
By then, Steyn had rented a simple room and was spending his time greasing the palms of informers and sex workers who might help him. He was aware Koch wanted some show of violence against the Thai establishment. Steyn wasn’t planning to provide it. But he figured he might be able to convince Koch to explore alternative ways to make his influence felt. With tourists streaming back, Steyn saw a financial opportunity that might keep Koch’s money flowing: go-go bars.
Koch initially resisted the idea, having already amassed a self-declared fortune. Yet Steyn persevered for months, putting together a business plan aimed at making Koch a local “king-maker”, operating bars, restaurants and massage parlours that would act as a pipeline for bribing police and local officials. Total capital outlay would be $690,000, but the investment would yield revenue of almost $600,000 a month once Phuket recovered, Steyn predicted. 
Koch was unconvinced until March last year, when he had a sudden brainstorm. Could one of the bars have a secret, soundproof room built at the back, he wondered. Somewhere they could hold someone for extended questioning. Someone like the public prosecutor Koch believed was still after him. As he mused at the time: “A place where we can treat long-term guests like [him], who might be with us for a couple of years . . . with the comfort they deserve.” 
Steyn went along with the idea to get a green light. He registered a company, the Royal Villa Phuket Company, which was majority-owned by Koch’s son, a Thai national, to meet local registration requirements. Three bars were acquired: the Chicago Club, Gold Bar and Tiffany’s a Go-Go. The Chicago was judged too large and expensive to run and was subsequently sold. But at Tiffany’s, the Whiskey and Cigar lounge was renamed “Rudi’s”, in honour of Koch. It was “not a spot for beer and tequila drinkers, and appeals to a more discerning customer”, Steyn proudly told Koch. “In Rudi’s, patrons will experience the ultimate conclusion of their bucket-list wishes,” Steyn went on, seemingly unaware that he might as well have been talking about the two men’s relationship.

From Colón, a rundown city at the Atlantic Ocean entrance to the Panama Canal, the road heading north-east hugs the Caribbean; calm blue waters on one side, lush tropical vegetation on the other. A military checkpoint marks a turn-off towards Linton Bay Marina, home to a hundred or so vessels. It’s also the site of Ocean Builders, the pod design and production business Koch established with Elwartowski and Romundt. In the early months of 2022, the whole enterprise looked to be thriving. Koch had established himself in a cavernous shed, and his team was busy marketing an improved pod design.
At its peak last year, according to several sources familiar with its operations, Ocean Builders employed about 30 people, two-thirds of whom were Panamanians, alongside expats from the US, Canada and South Africa. Former employees, speaking on condition of anonymity, recalled a chaotic operation, with frequent disagreements. While money was splashed on equipment, such as a huge 3D printer, there were frequent short-term financial pressures. Panamanian workers had to be paid in cash every 14 days, yet Koch and some of his colleagues frequently found themselves frozen out of their local bank accounts, probably due to the source of their funds. Ocean Builders did not reply to numerous requests for comment.
Still, the price of crypto had flown higher and, with the Seasteading Institute promising to bankroll projects around the globe, Ocean Builders was ready to unveil its futuristic offering to the newly rich. Its SeaPod would come in two models: a flagship, three-level pod offering 77 square metres of space and a slightly smaller single-floor SeaPod Eco. Each had panoramic windows, outdoor patio space and outriggers for things like solar panels or a hot tub. They were priced at up to $1.5mn.
© Butcher Billy
A two-day launch event was planned for September last year, to which various Panamanian dignitaries were invited, including the president Laurentino Cortizo. A group of enthusiasts and journalists were flown in from San Francisco, along with members of the architectural press. After the 2019 setback in Thailand and the abortive MS Satoshi venture, the SeaPod introduction promised to be a moment of genuine progress for seasteading. “All the best for your big day,” Steyn wrote Koch. “I really wish you all the very best on your future role as a pioneer in alternative lifestyles.”
On the first day, about 350 guests were welcomed by robotic dogs at a glitzy presentation in Panama City, where Ocean Builders chief executive Romundt declared: “My mission . . . is to share with you a vision for a positive future.” The next day, the entourage would move to Linton Bay, on the north shore, to see a pod for themselves. Meanwhile, without the knowledge of his co-founders, Koch had come up with elaborate plans for a parallel event in Phuket, which he described as a “false flag operation”. 
The XLII had been impounded at the Phuket Deep Sea Port. Koch thought it would be a good idea if the pod was destroyed in a “barbecue” timed to follow the extravaganza in Panama. The arsonists would be kitted out to look like Thai sailors, suggesting they were following orders. The whole thing was to be framed as an act of retribution on the part of Thai authorities, supposedly enraged by Ocean Builders’ success. Perhaps Koch imagined himself, like Michael Corleone in The Godfather, baptising his family’s newest member while violently settling other scores.
Steyn was instructed to assemble a team in Phuket, outfitted with Thai navy uniforms from a supplier in Bangkok. Koch wired $40,000 to cover costs, such as bribing security at the port. Displaying his engineering acumen, he also provided guidance on what kind of accelerant to use, calculating how long it would take for the pod to become fully engulfed in flames: “Ordinary fuel burns out too quickly. I have a special cocktail that is sticky and not easily extinguishable . . . ”
He also provided the slogans the fake mob should chant as the pod burnt, including: “You have failed in Thailand and you will fail again in Panama . . . ” The slogans were to be spoken in Thai. With the back-to-back plans, Steyn enthused: “We will be national and international news. It will be massive.” 
On the second day of the SeaPod launch, under a sunny Caribbean sky and with a calypso band playing in the background, Koch and Romundt clambered on to a stage at the Linton Bay Marina. They smiled and waved, then cut a long blue ribbon held by two hostesses dressed in short white yacht-chic dresses and matching shoes. The first SeaPod was christened Phoenix. Allan Baitel, a Panamanian native and the company’s spokesperson at the time, was busy providing quotes for journalists covering the event. “We have a Panamanian workforce here . . . that have been trained, that have learnt to build these structures . . . with the help of the engineers that we have brought from Germany, and from South Africa, and from the United States . . . We hope to duplicate this a hundred-fold,” he told AP.
Guests queued up to tour the structure, but by mid-afternoon so many of them had climbed aboard that the pod began to tilt towards the dock. Then it began to disappear. Ocean Builders rushed out a statement, blaming a “ballast tank and pumping system malfunction”. It insisted no one had been hurt and that there was no contamination of the surrounding water. But the reputational damage had been done. The SeaPod had sunk.

Koch blamed himself in a rambling voicemessage to Steyn: “The whole thing is a complete disaster. It is beyond my wildest fears . . . This was a complete fuck up, and it was my fault.” The Phuket port barbecue had to be called off, Koch decided. “The admirals are probably rolling on the floor, laughing. It’s going to be news all over the planet tomorrow. One million dollars spent for negative publicity,” he said. “I think I’m done.”
Having abandoned the SeaPod venture, at least for the moment, Koch noted that he would have time to “take care of loose ends in Thailand”. He wanted to “eliminate anyone who had anything to do with” impounding XLII. “Those people should pray to their fucking Buddha.”
But by then, Steyn’s situation in Phuket was sinking too. His attempts to muscle into the Bangla Road bar scene had brought him into contact with someone he later claimed was a conman. His money troubles intensified and, according to the text and voice messages, Koch became increasingly suspicious of Steyn. Disagreement between the two intensified through December 2022, when Steyn was forced to surrender ownership of the go-go bars. 
When Koch finally accused him of theft, Steyn threatened to go to Thai authorities and the press with what he knew. Information about Koch’s vendetta appears to have leaked to the Seasteading Institute in San Francisco, which cancelled a contract it had with Ocean Builders in January 2023. “Congratulations. I decided to shut down Ocean Builders completely,” Koch wrote to Steyn, almost in resignation. “That was discussed after the disastrous grand opening last year, and this makes the decision final. I will not receive a public backlash just to save a money-losing operation.”

Amid the squabbles, it seems Koch finally turned his imagination towards Steyn. “I picked some nice little scumbags from the streets of Colón,” he told him. “Putting them through some Nikita training. Once they are old enough, they will be 100% loyal . . . They will know how to eat and talk with manners. And they will know how to use a box cutter or a G36.”
Steyn assumed Koch was referencing the 1990 Luc Besson film, La Femme Nikita, in which a female felon is retrained as an assassin. A G36 is an assault rifle used by the German military. Steyn didn’t make much of the threat at the time, according to the transcripts. The row continued until March this year, when Steyn cut off communications. He left Thailand and is now living in hiding.
Back in January this year, the Ocean Builders team released a news update declaring, with “great sadness”, that Koch was stepping down as president and chief engineer. Health reasons were cited and the move was said to be effective immediately, with Koch taking on a future “advisory role”. But Koch was still working at the Ocean Builders’ yard, when the FT made a quiet visit recently, directing a small team of welders, grinding and binding the giant rusting underbelly of a new Ocean Builders pod. 
Publicly, the venture is now run on a day-to-day basis by Romundt, while Elwartowski has taken over as president. Undeterred by the sinking last year, the demonstration pod from the launch has been refloated at Puerto Lindo, close to the Ocean Builders’ yard. Adventurous individuals can rent it out for $595 a night, meaning that, for now, Koch’s seasteading dream is more high-end Airbnb than new Atlantis. 
Paul Murphy is head of the FT investigations team
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