Scammer tag: PatrickHarnett

[cunicula]

It is incomprehensible that not the entirety of pass-through operators are labelled as scammers anyway.

+1

And the people who labelled them as scammers before the scheme collapsed should get anti-scammer tags.

[Shadow383]

It is incomprehensible that not the entirety of pass-through operators are labelled as scammers anyway.

+1

And the people who labelled them as scammers before the scheme collapsed should get anti-scammer tags.

This is an idea I can thoroughly get behind 

[JoelKatz]

What happened here was this: PatrickHarnett advertised a depositing scheme, recallable on demand, paying 5% a month. He then unilaterally changed the interest rate to 1% (or below that, in steps, something like that). This in itself is a breach of contract, as he wasn't also simultaneously repaying holders on demand, but we'd have let it slide.

Then, he converted deposits into unrecallable paying ~1% a week. So basically what PatrickHarnett has done was transform an interest bearing recallable deposit into a sort of miner bond, where he pays "some" interest and the principal can never be recovered. This is not acceptable.

Scammer tag, please. Patrick Harnett is Peter Lambert v2.0.

There's no evidence this was a scam. In fact, everything I can see suggests that it was simply a common mistake. As the transcript shows, the agreement was based on the common understanding that he had no or limited Pirate exposure.

This turned out to be incorrect. It's not clear that this is Patrick's fault. This fault is equally on both sides of the agreement. At the time, the only evidence that Patrick had significant Pirate exposure was the common sense realization that it was likely that people were borrowing from him to invest in Pirate and lying to him about it.

Aug 10 08:06:31 <mircea_popescu>   listen i actually wanted to talk to you.
Aug 10 08:06:38 <patrickharnett>   hi
Aug 10 08:06:54 <mircea_popescu>   hey. your deposits still bs&t free ?
Aug 10 08:07:21 <patrickharnett>   I run a slightly complicated business, but most of the deposit accounts I run are BS&T free
Aug 10 08:07:39 <patrickharnett>   that's what the market wanted
Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that
Aug 10 08:10:41 <patrickharnett>   mainly because the 15,500 coins I hold on deposit are not invest in BS&T
Aug 10 08:10:56 <mircea_popescu>   well that works. i'd like to put 500 bitcoins with you
Aug 10 08:11:02 <mircea_popescu>   do you mind id'ing with gribble ?
Aug 10 08:11:28 <patrickharnett>   I was only planning on being here a minute so didn't id

Here we see both parties making the same mistake. Both parties had substantially the same information and made substantially the same mistake. Why is this Patrick's fault? Patrick has stated in another thread that he is paying this debt back the same way he is paying back similar debts. He is taking responsibility for his share of the common mistake and his lenders should do the same.

[cunicula]

Any idiot could see that these arrangements were scams from the outset. Now the schemes are in default and it is time to deliver the scammer tags.
If you don't assign a debtor in default a scammer tag, then what are scammer tags for?

You are arguing that Patrick and MPOE are idiots. That may be the case. Regardless, the defaulted debtor should get the scammer tag.

[JoelKatz]

Any idiot could see that these arrangements were scams from the outset.

Ahh, okay.

Now the schemes are in default and it is time to deliver the scammer tags.

So you are arguing both Patrick and Mircea should get scammer tags?

If you don't assign a debtor in default a scammer tag, then what are scammer tags for?

He's not a debtor in default. He's one party to a contract partially invalidated by a common mistake. A scammer tag would be for someone who uses fraud or deception, not for someone who makes a mistake where the other parties to his agreements equally make mistakes.

You are arguing that Patrick and MPOE are idiots. That may be the case. Regardless, the defaulted debtor should get the scammer tag.

I am not arguing that. You are. You are the one who said, "Any idiot could see that these arrangements were scams from the outset."

I disagree. I don't think either party realized that there was significant Pirate exposure. The premise on which this agreement was made was false due to no greater fault on either side. The parties mutually should bear the cost of their common mistake. Patrick is making partial payments as he is on other similar debt he has.

There's no evidence this was ever a scam. There's no evidence of any fraud or deception. Patrick has admitted this mistake and is attempting to rectify it as best he can.

Enforcing a contract as agreed, when that contract is based on a common mistake, is inequitable. If the mistake is not due to one party's fault more than the other, then both parties should bear the costs of their mistake.

[cunicula]

Patrick has admitted this mistake and is attempting to rectify it as best he can.

As have many scammers in the past who went on to scam again.

There should be objective criteria for assigning a scammer tag.

Debtor in default -> Scammer tag until debt is paid off.
Not in default -> No scammer tag
Not a debtor -> No scammer tag

Without objective criteria, the tag will just depend on who your friends are. As it does today.

[JoelKatz]

Patrick has admitted this mistake and is attempting to rectify it as best he can.

As have many scammers in the past who went on to scam again.

There should be objective criteria for assigning a scammer tag.

Debtor in default -> Scammer tag until debt is paid off.
Not in default -> No scammer tag
Not a debtor -> No scammer tag

Without objective criteria, the tag will just depend on who your friends are. As it does today.

It's not clear he's a debtor in default. He's a debtor in default if it's equitable to enforce the contract as agreed. But because the contract was based on a common mistake -- that Patrick's loan portfolio did not have significant Pirate exposure -- it's inequitable to enforce the contract as agreed.

Say you and I both believe that you have part ownership a particular car. I agree to pay you $5,000 and you agree to transfer to me your ownership interest in the car. If it turns out that you don't own the car at all, it's inequitable to insist that I still pay you the $5,000 in exchange for your zero ownership interest in the car. I wouldn't be a "scammer" because I broke the agreement, even if it technically appeared to say that all you had to do was transfer to me whatever interest you had, even if that was none at all.

Here there was a common mistake underlying the contract. It's inequitable to enforce the contract as agreed.

By the way, I doubt there are any courts that would enforce a contract of this sort. The usurious interest rates pretty much assure that the contract can only be kept by fraud or coercion and virtually assures this kind of outcome. Blame for that goes equally to both sides, IMO. Anyone who is legitimate and likely to pay back won't borrow at such high interest rates. The only people willing to pay such ridiculous rates are people who don't expect to have to pay back out of their own money.

Both sides deserve equal blame for this outcome, and I see no logic to applying a scammer tag to a transaction where both sides are at equally at fault.

I'd be open to an argument that Patrick is imposing an unfair portion of the default costs on his lenders. They should be shared.

[greyhawk]

Now that Standards & Poor has to pay back investors for their false ratings, it should be pretty obvious to require Harnett to pay back pirate investors for his false ratings.

[JoelKatz]

Now that Standards & Poor has to pay back investors for their false ratings, it should be pretty obvious to require Harnett to pay back pirate investors for his false ratings.

Nobody has yet admitted publicly that they relied on those ratings. If anyone does, we can try to figure out whether we should laugh or cry.

[cunicula]

Both sides deserve equal blame for this outcome, and I see no logic to applying a scammer tag to a transaction where both sides are at equally at fault.

I'd be open to an argument that Patrick is imposing an unfair portion of the default costs on his lenders. They should be shared.

Scammer tags are issued in the public interest. Blame is irrelevant.

Borrower in default gets scammer tag -> signal "this person is in default don't lend to this person"
Creditor gets scammer tag -> signal "meaning "

Obviously the latter signal is useless. Therefore, scammer tags are only assigned to borrowers in default.

Regardless of whether Patrick is a good guy or whatever, there may still be idiots who would agree to lend him more funds.
The scammer tag is intended to protect these idiots from their own stupidity.

[ElectricMucus]

Both sides deserve equal blame for this outcome, and I see no logic to applying a scammer tag to a transaction where both sides are at equally at fault.

I'd be open to an argument that Patrick is imposing an unfair portion of the default costs on his lenders. They should be shared.

Scammer tags are issued in the public interest. Blame is irrelevant.

Borrower in default gets scammer tag -> signal "this person is in default don't lend to this person"
Creditor gets scammer tag -> signal "meaning "

Obviously the latter signal is useless. Therefore, scammer tags are only assigned to borrowers in default.

Well I could claim for example that I borrowed you money and provide forged evidence to support my claim, which would make me a scammer.

[JoelKatz]

Creditor gets scammer tag -> signal "meaning "

Meaning that person is a scammer and you shouldn't borrow money from them. (See the post above me for one way they could abuse this, but there are many others.)

Obviously the latter signal is useless. Therefore, scammer tags are only assigned to borrowers in default.

I don't agree. If Patrick's portfolio had consisted of deposits from people with scammer tags, people might not have so easily underestimated the risk.

Regardless of whether Patrick is a good guy or whatever, there may still be idiots who would agree to lend him more funds.
The scammer tag is intended to protect these idiots from their own stupidity.

It's not clear why that would be stupidity. He might want to borrow funds to finance his debts better. There's no evidence he would mislead people about the circumstances. He has no history of doing so. If he wants to borrow money so he can settle his debts with those he had to force terms on and instead owe money to people he freely negotiated terms with, why should that be discouraged? (But that's the best argument I've heard so far. If that's the reasoning, I wouldn't consider it particularly unfair or unreasonable -- just a bad idea.)

[Dalkore]

Am I the only one who after reading the transcript, does not understand what is wrong other than the allegation that a deposit has not been paid back in a timely manner.     Could the OP please summarize what is actually the issue so we can weigh the evidence.  Just posting some logs out of context and having someone passionately arguing with the OP using Pirate references is not enough. 

I want your argument so I can weigh it.



Appreciated,
Dalkore

[Puppet]

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that

That turns out to have been a lie, and hardly an innocent one.

[Dalkore]

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that

That turns out to have been a lie, and hardly an innocent one.

I believe after reading what he has said after the Pirate default, is that he under-estimated the exposure people who were his borrowers,  to Pirate, but that he did not have prior knowledge. 

A bank counts debt is holds as assets & liabilities.   Unless you have more evidence, I am not sure this alone should meet the bar.   I have been visiting his thread in another section and so far, he has been slowly paying people back in regular intervals.


 

[Puppet]

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that

That turns out to have been a lie, and hardly an innocent one.

I believe after reading what he has said after the Pirate default, is that he under-estimated the exposure people who were his borrowers,  to Pirate, but that he did not have prior knowledge. 

If he didnt know, he shouldnt have said it categorically like that and mislead potential investors.
As for him paying back slowly; so are a few other labeled scammers. Im all for removing the tags once they paid everything back.

[MrTeal]

I'd say there's a bit a difference between PH who's paid back half the money and is making reasonable progress towards getting it all paid off and someone like Hashking who's paid a couple percent of his debt, has said the rest will take at least 3 years, and demands people be nice to him or he'll just cut and run.

[JoelKatz]

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that

That turns out to have been a lie, and hardly an innocent one.

It wasn't a lie. It was a mistake. It was a mistake made by both participants in this deal. Each side had substantially the same information and made substantially the same mistake.

Patrick made a genuine attempt to vet those who borrowed from him to ensure they weren't just borrowing from him to invest in Pirate. Unfortunately, they lied to him. In retrospect, this is 100% predictable.

But if you think for just a second, it's quite clear that if Patrick had any suspicion that this would have happened, he wouldn't have lent money to them. Think about it, it would have made no sense. Patrick would have just lent to Pirate himself and would have made a greater interest rate. (And, in fact, I was arguing with Patrick and those who lent money to him at the time that it made no sense.)

This was a common mistake underlying the contract, made with equal fault on both sides, and it makes it inequitable to enforce it as agreed.

Aug 10 08:07:58 <mircea_popescu>   you deem yourself able to repay your depositors in the event bs&t goes bankrupt, and nothing is recovered ?
Aug 10 08:08:00 <patrickharnett>   back in a couple of minutes - grabbing a glass of wine - friday evening here
Aug 10 08:09:57 <patrickharnett>   back
Aug 10 08:10:17 <patrickharnett>   in the event BS&T goes bust, I have more than enough assets to cover that

That turns out to have been a lie, and hardly an innocent one.

I believe after reading what he has said after the Pirate default, is that he under-estimated the exposure people who were his borrowers,  to Pirate, but that he did not have prior knowledge.  

If he didnt know, he shouldnt have said it categorically like that and mislead potential investors.

He thought he did know, as did the people who lent money to him. This wasn't a mistake that he alone made. This was a mistake made equally by both him and those who lent money to him.

As for him paying back slowly; so are a few other labeled scammers. Im all for removing the tags once they paid everything back.

The difference is that the others paying back slowly and labeled scammers, like Hashking, are in default. Patrick is not. He would only be in default if it was equitable to enforce his contracts as agreed. It is equitable to enforce Hashking's contract as agreed because his deliberately misrepresented his Pirate exposure. There is no evidence Patrick did so.

In any event, if we were to try to do that, we'd have to figure out how much of the loss equitably belongs to Patrick and how much belongs to the lenders, so we can decide when he has paid back everything he is responsible for. That's a remarkably subtle judgment for the community to make and would take effort collecting evidence and making subjective judgment calls. A scammer tag is way too coarse a mechanism for such a subtle process. It's for fraud, theft, lies, and stealing -- not for complex deals gone bad due to outside facts with all sides acting in good faith to make good.

Those who loaned money to Patrick at usurious interest rates are just as responsible for this collapse as Patrick is. There is nothing more foreseeable than the inability for a business to consistently produce outrageously unrealistic profits. Yes, Patrick was an idiot. But so were the people who loaned money to him. I have yet to see a single such person take even one shred of responsibility.

[ldrgn]

Can a mod confirm that they're looking into this?

[cunicula]

Creditor gets scammer tag -> signal "meaning "

Meaning that person is a scammer and you shouldn't borrow money from them. (See the post above me for one way they could abuse this, but there are many others.)

Fine, then give the people who lend to scammers a "Lend to Scammer" tag. I agree, this would be informative.

I don't think that the 'we both made a mistake' idea is helpful here. Obviously they both made a mistake.
When, I lend to someone and 'we both made a mistake', it is the debtor's responsibility to take the hit for the creditor.
If I make an equity investment and 'we both made a mistake', then the investor takes the hit.

Is there some evidence that Patrick has declared bankruptcy / liquidated his possessions? Do you feel that he shouldn't have to because incurring the debt was a 'mistake'?

If so, I have some 'mistaken' student loan debt to clear. Is there a court of JoelKatz available somewhere?