This Canadian man entered the Fortis hospital in India with intense vomiting
and diarrhea. Hours later, he was dead. The next day, his body was on its way back to Canada.
Local authorities saw nothing suspicious. Instead, they labeled the death
as an acute case of gastroenteritis and intestinal perforation. But, the moment
this man died, he took hundreds of millions of dollars with him.
His death sparked authorities in the US and Canada to scramble to
find those millions. What they discovered blew everyone away.
Now, the world obsesses over his death. Hundreds of digital detectives want to
answer thousands of questions. But, one stands out above the rest. What if he isn't dead?
Let's talk about Quadriga in this episode of Forensics.
Gerald Cotten followed the typical bitcoin millionaire persona:
a nerdy introvert who had made it big with crypto. But you wouldn't
have guessed he was a trailblazer in the Canadian cryptocurrency exchange market.
His company, Quadriga Fintech Solutions, ran the Quadriga Exchange, which had become
the biggest in Canada. As bitcoin surged, Cotten's fortune increased.
He lived in luxury, having yachts and a Cessna that many called the Cadillac of the skies.
Cotten and his wife, Jennifer Robertson, traveled the world and lived the good life.
He also donated his money and time to causes. That's how he landed in India. Part of his mission
was to attend the opening of an orphanage, where he had donated $11,000 for supplies.
The couple landed in New Dehli on November 30, 2018. First,
they visited the Taj Mahal and other iconic landmarks in India. Then, on December 8,
they landed in Jaipur and made their way to the Oberoi Hotel, one of the most luxurious in India.
This place is a dream destination. But, for them, it turned into a nightmare in a matter
of hours. As the evening progressed, Cotten began complaining about stomach cramps. He
had long suffered from Chron's disease, but the discomfort wouldn't subside this time.
An ambulance rushed him through the streets of Jaipur to the private Fortis Hospital.
Things only worsened. The severe case of gastroenteritis showed signs of possible
perforation. Staff rushed to move him to the ICU but failed to stabilize him.
At 2:45 pm on December 9, he went into cardiac arrest. Though the doctors managed to revive him,
he flatlined two more times. Finally, at 7:26, on December 9, Gerald Cotten died.
The hospital staff listed his cause of death as cardiac arrest due to perforation. There
was no report of something unusual, though it's rare for people to die from Chron's disease.
Two days later, on December 11, Jennifer Robertson and the body of
her deceased husband arrived in Canada. A coroner signed a death certificate,
and Cotten was dead, and more than $200 million vanished.
The millions didn't belong to him in the first place. Instead,
more than seventy thousand people had trusted his exchange with their money.
Now, the money was stuck in crypto wallets somewhere in the blockchain.
Cotten's death left authorities and crypto experts scrambling to find them.
But, to the outside world, Cotten didn't look like a thief. Well, looks can be deceiving.
Cotten grew up in the small town of Belleville, Ontario, and loved computers and the internet.
So there's nothing strange except that he participated in scams since he was fifteen.
In 2003, he arrived at the website TalkGold. This was a haven of High-yield Investment
Programs that promised ultra-high returns with little to no work.
Now, HYIPs are, most often than not, a scam.
These schemes balance taking people's money and keeping up a lie that maintains their trust.
This world lured him in, and there was no turning back.
Under the username Sceptre, he became one of the most active users.
In January of 2004, he had already created his first investment program, S&S investments
and the promises were worthy of a teenager.
"All I will say is that we will generate your return and that we
are not what is called a ponzi or pyramid scheme."
In months, he had hundreds of unsuspecting investors. But he had no money,
or investment plan. So, now, they were chasing him, and he felt the heat.
"If a threat of any kind is made...you
are stating that you do not wish to receive a refund and you will not receive one".
At one point, Sceptre owed money to 235 investors,
but he never paid it back. By May of 2004, S&S Investments had disappeared, and so had Sceptre.
That's when Lucky-Invest appeared, and Cotten made one crucial mistake. Once,
he answered a question for Sceptre under his new username. This little mistake earned him
a reputation in this shady world, so he went into stealth mode and his companies disappeared.
So, while Cotten lived in and out the world of scams and Ponzi schemes, another player
in our story also made headlines: Omar Dhamani. Dhamani ran ShadowCrew, an online marketplace
for stolen credit card numbers and, in 2005, a court found him guilty and sentenced him to 18
months in jail, but this wouldn't slow him down. In 2012, the mysterious Quadriga Fund was born,
and it promised great returns. The name comes from the four-horse carriage from Ancient Rome,
who were the founding investors. The thing is that nobody knew who they were.
Around this time, Gerald Cotten moved to Vancouver, a city becoming a crypto hub. So,
it seemed like the perfect destination for him.
Cotten even became the director of the Vancouver Bitcoin Co-Op,
and his nerdy personality was helpful. After all, he seemed harmless. With a
big smile and an ability to explain, he lured more and more people into bitcoin.
At the same time, nearing 2013, Cotten and a business partner incorporated QuadrigaCX.
This wasn't the same as the Quadriga Fund, which still "operated" but had no activity.
Quadriga CX got off to a great start in 2013. It was the cheapest, fastest,
and “safest”, in the country. It was the first exchange to hold a license
from Canada's anti-money-laundering authority.
So, while Quadriga CX rose to the top in no time, the Quadriga Fund disappeared in silence. There's
no evidence, still, on why. There's also no clear indicator of who ran it or even created it. But,
let's face it, having the same is too much of a coincidence and it wasn’t the only one.
New character in the story is
Michael Patryn has earned a reputation in fintech as the
"go-to" person when it comes to the topic. At least, that's what some
articles write about him. Plus, he teaches Thai kickboxing and is a personal trainer.
He was also an MMA fighter and had a Master's degree in Social Psychology
from the University of California, Santa Barbara.
Well, that's what he says.
He also was active in TalkGold, that's where he met Cotten,
and the two would become friends. Who knew that such a place of fraud could form such
bonds. Plus, their friendship took them to some interesting places.
Liberty Reserve was a new digital currency gaining strength after it began in 2007.
It had no anti-money-laundering policies or verified information. In short,
it had all the excellent markings to be a scam.
As the years passed, Liberty Reserve grew. It was massive, with more than 78 million
transactions totaling more than $8 billion.
People couldn't send their funds directly to buy and sell Liberty Reserve. Instead,
they had to use exchanges, which charged fees per transaction.
Authorities grew suspicious and pounced on the company, as well as on those exchanges.
They found more than thirty exchanges, where people sent their money to buy
the digital currency. Amongst them was one Midas Gold account.
This one had seen more than $5.2 million flow through it on its way to Liberty Reserve.
The owner of the Midas Gold account was Mr. Patryn. But not Michael Patryn. Omar Patryn.
The email with which he had registered the account was gerald.cotten@gmail.com.
Now, Omar Patryn isn't Michael Patryn's brother. They are the same person. And
this isn't even his original name.
His name is Omar Dhamani, who would create Quadriga CX with
a business partner: Gerald Cotten. Quadriga CX had a lot of advantages,
such as speed and cost, but it also benefited from a series of events. Back in 2014, there
were few major crypto exchanges in the world, and those that had made it big were, in fact, massive.
But, as big as they were, they weren't immune to hacking.
So, in one year, most of the most significant funds in the world had shut down,
paving the way for Quadriga to become a big name.
Plus, Cotten was making a name for himself in the crypto world.
He appeared in podcasts and articles, and some were even candid. In one, he revealed
that he kept passwords in pen and paper, which would later create an entire myth around him.
Then, there was the way he handled business. One of his goals was to take Quadriga public right
when bitcoin's value rose. It made perfect sense.
So, yes, things seemed optimistic for Quadriga. But, there was a problem,
and it was Quadriga itself.
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Quadriga not only failed to go public, but by June 2015, it had no cash. Plus, it had lost 45% of its market share.
Desperate to see their investments pay off, investors put in $600,000 more,
including $200,000 from Patryn. But, it was to no avail. It was a sinking ship.
By early 2016, the entire board in Quadriga had quit,
including Patryn. But, it still handled a lot of money.
So, just like that, Cotten was left alone in charge of a crypto exchange
that was so big that the Canadian government grew suspicious. The central bank issued a cease-trade.
The cease-trade ended right when bitcoin was becoming more valuable. The exchange
saw around $2 billion in transactions, and it profited from every one. This was at a
time when more and more people wanted in on Bitcoin, so for Cotten, things were great.
But what the world didn't know was that Quadriga was nothing more than Cotten and his laptop,
for better or worse. Three days before Gerald
Cotten and Jennifer Robertson arrived in India, he signed a will. The date was November 27, 2018.
Cotten left everything $100,000 Canadian for their
two chihuahuas. Oh, and he made Robertson the owner of his every possession should he die.
Is it common practice? Yes. Some people have signed wills before traveling,
but there was nothing of concern for Cotten.
Then, they traveled to India, where we know what happened.
Or do we? On December 10, one day after Cotten died, the Fortis hospital asked
for a no-objection certificate. This states that there was no foul play in his death.
Then, the hotel rushed to have the body embalmed. But the first professional
rejected it as it came from a hotel and not a hospital or the police. So,
they rushed to a university hospital, where a junior embalmer did the job.
That same day, Jennifer Robertson checked out of the hotel at 3:30 pm, paid for the remaining days,
and flew to New Dehli. By the 11th, she was already landing in Canada with the embalmed body.
On the 12th, a Canadian death certificate showed that Cotten died
in India on the 9th. But, the death certificate from India tells another story.
First of all, it wasn't until the 13th that the local authority emitted the certificate.
And, yes, I know that typos exist. But, in a death certificate?
This document is vital, and I can't fathom how nobody noticed this mistake.
Then, on the 14th, Jennifer Robertson called the local manager to help her
sell Cotten's fancy private plane. She explained that her husband had died and
that she didn't need the Cessna for herself. The same went for the yacht.
As for Quadriga, the company waited until January 14, 2019, to announce that Cotten had died.
Immediately afterward, it went into maintenance.
Of course, the moment the news came out, people rushed to withdraw their funds but couldn't. With
the site down and no more communication from Robertson, people were in the dark.
By January 31, Quadriga filed for creditor protection, and the case
escalated to higher authorities. This means that the person in charge of everything has to
sign an affidavit where they swear by certain conditions, and that was Jennifer Robertson.
The money was the most important thing, and she said she had no idea
where the passwords for the cold wallets were.
She did say there was a dead man's switch that would send cold wallet passwords to her and
others in charge. But, the email never came, and that email was the only path to finding the more
than $200 million that had gone missing. QuadrigaCX had more than $200 million in
its name because bitcoin was on the rise, and Cotten had made a name for himself.
But the platform was shaky at best. In June 2017, the platform failed to verify a smart contract,
losing $14 million in cryptocurrency. And that wasn't the only problem.
The platform had no proper accounting system. Instead,
it used third-party software to make payments and no adequate tracking.
So, when $67,5 million came in December 2017,
Canada's Central Bank took notice. It investigated and could not track the money
back to its owners, so it seized $25 million and froze close to 400 users.
Cotten’s name took a hit. Even his relatives were having trouble with banks in Canada.
And things were about to get much worse.
Users rushed to withdraw their funds from Quadriga. But the system was so
flawed that it was impossible.
In fact, it all seemed perfectly flawed.
Scams work at first. The HYIP scheme pays some people off to maintain their reputation. Then
it collapses, blaming something like the unpredictability of the investment world.
As the bitcoin price was collapsing, more and more users were desperate to
remove their money from the exchange, and they ran into a brick wall. A user
even sued Quadriga for failing to pay back $137,000. But Quadriga didn't answer back.
Right at this time, Cotten's life was also taking a toll. He grew secluded,
stopped seeing friends and family, and made fewer media appearances. By November 2018,
he called the local airport to say that he couldn't pay the lease on the plane.
So, if at this time, the Quadriga Exchange would have collapsed due to reasons,
it would've made perfect sense. After all, it had all the signs of an HYIP. But that's the thing.
It didn't collapse.
Canadian authorities assigned Ernst and Young as a monitor while Quadriga sorted
everything out. What Ernst and Young found made things way more complicated.
Outside analysts found no conclusive evidence that the cold wallets ever existed. Moreover,
they weren't convinced that there was enough activity to show their presence.
So, another question came up: Where had the funds gone? Were they stuck or missing?
Then, on January 26, almost two weeks after entering maintenance,
Quadriga was still accepting deposits. It only went offline
two days after the last transfer, which had three weeks days after Cotten's death.
Then, the weird facts kept piling on top of each other. On February 6, 2019, Quadriga
sent $350,000 to a cold wallet by accident. It's a cold wallet that no one can access.
It reminds me of Cotten's mistake back with Lucky-Invest and S&S.
Ernst and Young did find some cold wallets, but they had been empty since April 2018.
So that's how one man's death enthralled the entire world.
The media loved the case. Patryn took a beating, and his dark past came out, but he claimed
everything happened after he left. In fact, he blamed Cotten for struggling to find work.
Journalists flew worldwide to find Cotten. When they landed in India, the authorities saw
no harm done. To them, Cotten was just another death. But there was
the will and the death certificate with errors.
When word got out in Canada, local contractors rushed to the couple's former home
to find a safe, or anything, where the passwords would be. They found nothing.
Then, authorities discovered that Cotten had used aliases, such as Aretwo Deetwo and Seethree Peeo,
to transfer funds from Quadriga to other exchanges. These funds included 76,000 users.
The case was confusing enough for people even to ask for an
exhumation of Cotten's body for DNA testing.
And I'd love to see that because, in the end, Quadriga is the best example
of a Ponzi scheme played out to the highest level.
As for Robertson, after signing off all Quadriga's assets, she got $90,000,
the wedding ring, and a Jeep. That's it.
Robertson published a book where she tries to clear her name and does a terrible
job. Still, she insists that she knew nothing of her husband's work, but that's a far claim.
Granted, she is trying to rebuild her life, and so is Cotten.
Oh, yes, he's out there, don't you think?