Scammer Tags- Pirate Pass Through operators ?

[JoelKatz]

Affiliate scams and confidence men certainly deserve the tag, but not flat "honest" pass throughs, who could plausibly have been duped.

This one time, yes. But next time, nobody has any excuses.

[hannesnaude]

1)  The scam wasn't known as a scam for certain.

Yes, it was.

Joel, you give people too much credit. Some of us here are dumber than a box of hammers.

Personally I also feel that it is not the PPT operators we should be going after, but rather those who formed part of the Pirate propaganda machine irrespective of whether they operated PPTs or not. So if you operated a PPT, but did not campaign for Pirate you get away with it. Simply providing a service that the market demands.

But if you went around claiming to know the business model, saying stuff like "No-one with half a brain thinks this is a ponzi" and tirelessly shouting down anyone who dares disagree, then you were either on the payroll or so incredibly stupid that others should be warned against paying heed to anything you say. Unfortunately we can't prove who is unethical and who is developmentally delayed. So I suggest that they should be made to choose between scammer tags or dumbass tags. It has to be one of those.

[bitlane]

Personally I also feel that it is not the PPT operators we should be going after, but rather those who formed part of the Pirate propaganda machine irrespective of whether they operated PPTs or not. So if you operated a PPT, but did not campaign for Pirate you get away with it. Simply providing a service that the market demands.

I can't help but think of the 'Good Sumaritan Act' and how it saves people from being charged with assault or sued by a would-be-victim, after they break the ribs of that 'victim' who's life they are trying to save by performing the Heimlich maneuver, in order to actually save that person's life, rather than leaving them to choke to death...LOL

[iCEBREAKER]

There is no way to prove payb.tc, the operator of the BitcoinMax PPT, knew or did not know the nature of pirate's operation.

That doesn't matter; the reasons payb.tc is a scammer are that he

1) refused to recognize the reality of the BS&T default, preferring to remain mired in the past and demand full payment

2) refused to comply in good faith with pirate's request for PPT account information

3) refused to comply with his own BitcoinMax account holders' requests that their account info be passed through to pirate

4) suddenly proclaimed an 'all-or-nothing' stance towards pirate, despite having been willing to trust him previously, only after the default was announced


Payb.tc, next time both your PPT account holders and pirate ask you to do something (such as pass their PPT account info through to pirate) DO IT.

[SgtSpike]

Sorry, but everyone in the situation knew what was happening.  There was no murder, in which the murdered person didn't know he was going to be murdered.  This is therefore an invalid argument.
The investors knew that it may be a scam.

You kind of just contradicted yourself. First you say that everyone knew what was happening. Then you say the investors knew that it may be a scam. Did the investors know it was a scam?

Are you saying everyone who claimed it wasn't a Ponzi was lying and that everyone really did know that it was a Ponzi scheme all along? If so, the PPT operators who didn't say they knew it was a Ponzi were lying, just like Pirate. Right?

If someone comes up to you and says "I will steal your money if you give it to me, but I will fake very high interest rates to make it look as if you're making money." and you give him money, when he steals the money, did he really scam you?  Scamming is lying/not fulfilling a contract.  If, as you said, it was so blatantly obvious that it was a scam, then the PPT operators didn't scam anyone.  They merely offered a service that they knew no more about than we did.

If it's your position that everyone knew it was a Ponzi scheme all along, then the PPT operators were knowingly participating in a Ponzi scheme. They're as deserving of scammer tags as Pirate.

Ok, let's turn the situation around then.  Let's assume you are right, and EVERYONE knew this was 100% a scam and a ponzi.

Then why do the pass through operators get their reputation dinged again?  For servicing the people who wanted to gamble their money on the scam?  Uhh, not in my book!  They held up their end of the bargain, which was to pay out as long as pirate was paying out.

And I don't see how "knowingly participating in a Ponzi scheme" makes someone a scammer.  There are plenty of openly-ponzi "investments" or "services" or whatever you want to call them on this forum.  Are you saying that every one of those operators should also receive a scammer tag?

To me, the scammer tag is a result of someone not holding up to their word or contract.  Pirate should receive it, since he promised to pay out, and did not.  The insured PPT's that didn't pay out should receive it, since they promised to insure their deposits, and haven't paid them out.  The uninsured PPT's should not receive it, because they did what they said they would do.  They didn't scam anyone.

Now, certainly, I'm not saying that participation in a Ponzi scheme is legal, or morally "good", but I fail to see the connection between that and the scammer tag.  As long as the PPT's were up front about what they were investing in and upheld the terms of the agreement they stated, they did not scam anyone.

[JoelKatz]

2) refused to comply in good faith with pirate's request for PPT account information

3) refused to comply with his own BitcoinMax account holders' requests that their account info be passed through to pirate

He had to do these two things, for reasons that I explained elsewhere. He had no other way to protect those of his investors who did not wish their information given to Pirate. Had he passed through information to Pirate, there is no way he could have prevented Pirate from trying to settle his debts directly, depriving other of his investors of their rightful share of those payouts. If you and I each half own a house, you can't cut the house in half, sell half of it, and keep all the profits as "your half". We are each entitled to half of the proceeds of the sale of any part of the house. You are not fully entitled to all the proceeds of the sale of half of it leaving me to try to sell my half by myself.

[JoelKatz]

Ok, let's turn the situation around then.  Let's assume you are right, and EVERYONE knew this was 100% a scam and a ponzi.

Then why do the pass through operators get their reputation dinged again?

For the same reason Pirate does.

For servicing the people who wanted to gamble their money on the scam?  Uhh, not in my book!  They held up their end of the bargain, which was to pay out as long as pirate was paying out.

There is no such thing as "gambling" on a "scam". Gambling and scamming are mutually exclusive.

And I don't see how "knowingly participating in a Ponzi scheme" makes someone a scammer.  There are plenty of openly-ponzi "investments" or "services" or whatever you want to call them on this forum.  Are you saying that every one of those operators should also receive a scammer tag?

Knowingly participating in a Ponzi makes you a scammer because you are paying the Ponzi operator make you the recipient of fraudulent transfers.

To me, the scammer tag is a result of someone not holding up to their word or contract.  Pirate should receive it, since he promised to pay out, and did not.  The insured PPT's that didn't pay out should receive it, since they promised to insure their deposits, and haven't paid them out.  The uninsured PPT's should not receive it, because they did what they said they would do.  They didn't scam anyone.

They did precisely the same thing Pirate did. In fact, they paid Pirate to do what he did!

Now, certainly, I'm not saying that participation in a Ponzi scheme is legal, or morally "good", but I fail to see the connection between that and the scammer tag.  As long as the PPT's were up front about what they were investing in and upheld the terms of the agreement they stated, they did not scam anyone.

They scammed everyone else who paid into the Ponzi scheme, just like Pirate did.

[SgtSpike]

Knowingly participating in a Ponzi makes you a scammer because you are paying the Ponzi operator make you the recipient of fraudulent transfers.

I guess here is the meat of what we disagree upon.  I don't agree that participating in a ponzi makes you a scammer.  And pirate is only a scammer in my book because he didn't admit it was a ponzi up front.  If he had admitted it was a ponzi from day 1, then I wouldn't see any reason to give him a scammer tag.

Open ponzis are illegal only because the law says they are.  I don't see participation in a ponzi as any different than other forms of gambling.

One definition of gambling:
2: to stake something on a contingency : take a chance

[JoelKatz]

Knowingly participating in a Ponzi makes you a scammer because you are paying the Ponzi operator make you the recipient of fraudulent transfers.

I guess here is the meat of what we disagree upon.  I don't agree that participating in a ponzi makes you a scammer.  And pirate is only a scammer in my book because he didn't admit it was a ponzi up front.  If he had admitted it was a ponzi from day 1, then I wouldn't see any reason to give him a scammer tag.

The PPT operators didn't admit it was a Ponzi either.

Open ponzis are illegal only because the law says they are.  I don't see participation in a ponzi as any different than other forms of gambling.

Then you don't understand what a Ponzi scheme is. The crux of a Ponzi scheme is that depositors are told that there is some underlying business or investment that does not actually exist.

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The Ponzi scheme usually entices new investors by offering higher returns than other investments, in the form of short-term returns that are either abnormally high or unusually consistent. Perpetuation of the high returns requires an ever-increasing flow of money from new investors to keep the scheme going."

One definition of gambling:
2: to stake something on a contingency : take a chance

Right, but you can't take that literally. Otherwise, everything would be gambling. Crossing the street takes the chance that you'll get hit by a car but it's not gambling. When you are being lied to about what is happening with your money, that's scamming, not gambling. When you play craps, that you might win or lose is gambling. That the casino might not pay you even if you win or that the table might be rigged is not part of the gambling equation.

[muyuu]

In these cases where they advertised clearly what they were exactly reselling, I see no scam.

I have only followed, and not too closely, Goat's PPT. He insured Pirate's bond partly, and horoured his contract. No scam there whatsoever.

These people didn't claim to respond for Pirate's solvency and there very existence proves there was a suspicion something might go wrong. Am I missing something important?

[JoelKatz]

In these cases where they advertised clearly what they were exactly reselling, I see no scam.

Again, you're responding to the argument nobody's making. We're not saying PPT operators scammed *their* *depositors*. We're saying they scammed *other* *pirate* *depositors*, just like Pirate did.

I have only followed, and not too closely, Goat's PPT. He insured Pirate's bond partly, and horoured his contract. No scam there whatsoever.

Again, we're not saying PPT operators scammed their own depositors.

These people didn't claim to respond for Pirate's solvency and there very existence proves there was a suspicion something might go wrong. Am I missing something important?

For the fiftieth time, like seriously -- you're missing that they paid Pirate to make their customers the recipients of fraudulent transfers of other people's money where they knew that other people were told that money would actually be invested and where they knew that paying that money to their customers didn't constitute a legitimate investment of any kind. PPT operators paid Pirate to cut their customers in on his Ponzi scheme.

[muyuu]

For the fiftieth time, like seriously -- you're missing that they paid Pirate to make their customers the recipients of fraudulent transfers of other people's money where they knew that other people were told that money would actually be invested and where they knew that paying that money to their customers didn't constitute a legitimate investment of any kind. PPT operators paid Pirate to cut their customers in on his Ponzi scheme.

Did PPT customers get any sort of special treatment? Better rates? earlier payment? Honest question, I wasn't following that closely as I totally disregarded Pirate's obvious Ponzi while it was actually running.

[SgtSpike]

In these cases where they advertised clearly what they were exactly reselling, I see no scam.

Again, you're responding to the argument nobody's making. We're not saying PPT operators scammed *their* *depositors*. We're saying they scammed *other* *pirate* *depositors*, just like Pirate did.

I have only followed, and not too closely, Goat's PPT. He insured Pirate's bond partly, and horoured his contract. No scam there whatsoever.

Again, we're not saying PPT operators scammed their own depositors.

These people didn't claim to respond for Pirate's solvency and there very existence proves there was a suspicion something might go wrong. Am I missing something important?

For the fiftieth time, like seriously -- you're missing that they paid Pirate to make their customers the recipients of fraudulent transfers of other people's money where they knew that other people were told that money would actually be invested and where they knew that paying that money to their customers didn't constitute a legitimate investment of any kind. PPT operators paid Pirate to cut their customers in on his Ponzi scheme.

Ok, this is the first time I have heard you say that you don't consider the PPT's to be scamming their depositors.  This was the argument I was trying to dispel the whole time, so I am glad we agree.

[SgtSpike]

One question remains though Joel... if the PPT's deserve a scammer tag for aiding people in participating in the ponzi, wouldn't everyone who participated in the ponzi also deserve the scammer tag, since they "stole" funds "illegitimately" from other investors?

[muyuu]

One question remains though Joel... if the PPT's deserve a scammer tag for aiding people in participating in the ponzi, wouldn't everyone who participated in the ponzi also deserve the scammer tag, since they "stole" funds "illegitimately" from other investors?

That's what I'm making out.

I'm trying hard here to understand how a late entrant in a PPT is in any better position than a late entrant directly in Pirate's Ponzi, other than the fact that the PPT operator may suck up a bigger part of the butthurt when it finally collapses. This makes the operator a scammer? makes no sense whatsoever. If they were indeed having a better rate then he'd have a point.

In any case, by this argument all securitization should be banned, which I think it's ridiculous. The PPT themselves weren't opaque and were very public about their exact conditions. I believe this is perfectly legitimate.

People who invest in non-audited securities directly or indirectly do so at their own risk and they should be able to shoot themselves in the foot. GLBSE will start offering some surface proof of operation for those who want some standarised book-keeping of ventures. And in any case you should be wary of anything you cannot very closely verify.

[Littleshop]

2) refused to comply in good faith with pirate's request for PPT account information

3) refused to comply with his own BitcoinMax account holders' requests that their account info be passed through to pirate

These two items are a smokescreen and make zero difference.  All of your other points stand. 

[JoelKatz]

One question remains though Joel... if the PPT's deserve a scammer tag for aiding people in participating in the ponzi, wouldn't everyone who participated in the ponzi also deserve the scammer tag, since they "stole" funds "illegitimately" from other investors?

Yes. But again, I'm willing to give people who can even remotely plausibly claim that they didn't know it was a Ponzi scheme a free pass this one time. But hopefully now everyone understands that when something is obviously a Ponzi, it is in fact a Ponzi (or related scam).

[JoelKatz]

I'm trying hard here to understand how a late entrant in a PPT is in any better position than a late entrant directly in Pirate's Ponzi, other than the fact that the PPT operator may suck up a bigger part of the butthurt when it finally collapses. This makes the operator a scammer? makes no sense whatsoever. If they were indeed having a better rate then he'd have a point.

Knowingly paying someone else to make you the recipient of fraudulent transfers makes you a scammer.

In any case, by this argument all securitization should be banned, which I think it's ridiculous. The PPT themselves weren't opaque and were very public about their exact conditions. I believe this is perfectly legitimate.

Again, nobody is arguing they scammed their own depositors. You can stop beating to death the argument that nobody is making.

People who invest in non-audited securities directly or indirectly do so at their own risk and they should be able to shoot themselves in the foot. GLBSE will start offering some surface proof of operation for those who want some standarised book-keeping of ventures. And in any case you should be wary of anything you cannot very closely verify.

The problem is that they shoot other people in the foot, not just themselves. When someone invested in Pirate, they were paying Pirate to take someone else's money -- someone who was told their money would be legitimately invested -- and give it to them. Clearly, that is not an actual investment in any sense of the word.

I don't see how you can make this argument work unless you want to argue that Pirate also did nothing wrong because everyone who invested with him knew what they were doing and he didn't do anything he promised he wouldn't do. The scam is not that Pirate couldn't make payouts. The scam is that the transfers were fraudulent because there was no actual investment activity.

[SgtSpike]

Again, Joel, why are you targeting the PPT operators themselves if that is the case?  It sounds as though EVERYONE who received funds from the ponzi more than they invested should be labeled as a scammer, based on what you are saying.  And everyone who received less funds from the ponzi than they invested should be labeled a victim.  True?

[JoelKatz]

Again, Joel, why are you targeting the PPT operators themselves if that is the case?  It sounds as though EVERYONE who received funds from the ponzi more than they invested should be labeled as a scammer, based on what you are saying.  And everyone who received less funds from the ponzi than they invested should be labeled a victim.  True?

I'm making the arguments that I'm making because I believe that they are true and because I believe that getting the community to accept them will reduce the number of times the community needs to learn this painful lesson. Passing the buck doesn't cut it with me.