Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Hackers Hijack Couple's Country

WESTCLIFF-ON-SEA, England -- Eager for a challenge, Roy and Joan Bates proclaimed their own country 33 years ago on an abandoned North Sea military platform and appointed themselves prince and princess of Sealand.

They asserted territorial independence 10 kilometers off the British coast under a red-white-and-black flag. They issued passports, stamps and coins and successfully beat back British claims in court and German invaders in situ.

But while the couple were defending their borders in a spirit of adventure and tax-free living, the Principality of Sealand was hijacked on the Internet by an alleged international fraud ring with interests in weapons trading, drug smuggling and money laundering.

Sealand was born over a few pints in a pub. Bates knew there were platforms in the North Sea, and one evening he and his friends began talking about forming a country on one. Only Bates got serious.

He consulted lawbooks and international lawyers and could find no legal obstacles to the project. So in September 1966, Roy and Joan Bates occupied Rough's Tower, a gun and landing platform on two enormous concrete pylons that housed as many as 200 soldiers at a time during World War II. They declared it a tax-free "country" and claimed exemption from British income taxes.

"I did it because everyone told me I couldn't do it," Roy Bates said.

The first hint of a Sealand clone, in Roy Bates' memory, came after the 1997 murder of fashion designer Gianni Versace and the suicide of his killer, Andrew Cunanan, on a Miami boat. Police said the German businessman who owned the boat had a Sealand passport and diplomatic license plates.

Bates was puzzled, he says, because he had issued passports only to a few hundred friends and collaborators and didn't know the German businessman.

Then, about a year ago, a friend called Bates from the United States to say he had seen Sealand's web site, which boasted 160,000 citizens and several foreign embassies. The prince and princess of Sealand didn't have embassies f or even a web site.

The mystery began to unravel in March after the Civil Guard, Spain's paramilitary police, arrested a flamenco nightclub owner for selling diluted gasoline at his Madrid filling station. Identifying himself as Sealand's "consul," he produced a diplomatic passport and tried to claim immunity from prosecution.

A check with Spain's Foreign Ministry turned up no such country, prompting investigators to treat Sealand as a criminal gang.

Police raided three Sealand offices and a shop that made Sealand license plates. Sealand operatives, they reported, had sold diplomatic credentials to Moroccan hashish smugglers, negotiated with Russian arms dealers and tried to channel millions of dollars through three Spanish banks for mysterious Russian and Iraqi clients. About 80 people are accused of committing fraud, falsifying documents and usurping public functions.

Roy Bates denies any links to the busted Sealand gang, and Spanish police say no one in his family is a suspect. "They're stealing our name, and they're stealing from other people," Joan Bates said. "How disgusting can you get?"

But as police pursued his Spanish rivals, Bates struck the deal he'd been waiting for.

Sean Hastings, a 32-year-old American veteran of Silicon Valley and Caribbean-based computer ventures, had been looking for a safer offshore headquarters.

Bates embraced the idea of a pirate cyber-site f one operating beyond the reach of lawsuits, government subpoenas and tax inspectors. He leased space on the platform to Hastings' company, Havenco, which has set up generators and hundreds of server computers f the tools that allow web site access, communications and financial transactions.

With a few dozen technicians on the platform, the company's site went online last Tuesday, fielding inquiries about how to buy shares in the server computers.