For those that don't want to read everything - here is a short summary.
Zhou Tong used to run bitcoinica. Using inside information, he stole bitcoins at least two times from that company.
The last theft was traced directly back to him.
With no way to defend himself, he made up a fictional character that NO PERSON ever met, or spoke to, other than Zhou Tong himself. He blamed everything on this other person, therefore making himself look innocent. Of course, ZERO evidence was ever presented that this person is real.
We're now told this imaginary person cannot be contacted - so Zhou hopes we will all just forget about his theft. He still owes the community 5,000 btc. Religious (aka gullible) people may believe his story, but the rest of us know he is a thief.
WHY NO SCAMMER TAG? He donated a lot of money to the forum.
To read the entire story:
https://bitcointalk.org/index.php?topic=95738.0