Scammer tag: PatrickHarnett

[JoelKatz]

Explaining that the failure that resulted in the loans going bad was due to a mistake made jointly by both parties and thus not equitably allocatable entirely to one of them. Patrick is as much a victim here as those who loaned him money -- assuming he eventually makes some kind of reasonable settlement for a portion of the principle.

You are making no sense. Are you living in the vicinity of a strong reality distortion field of some kind?

1) you ask me for money,
2) i ask you if you're a reputable, honest member of the society, with a steady income,
3) you say yes,
4) i lend you the money, we sign a contract agreeing on the interest rate and date of return,
5) you gamble 1/3rd of it, waste 1/3rd on hookers and snort the last 1/3rd
6) you fail to return the principal
7) you fail to pay the interest

In the JoelKatz world, that means we're both equally guilty. And it's a "common mistake", whatever that means.

You would find it a more productive use of your time to spend the five minutes it would take to understand what a "common mistake" is rather than showing off your ignorance to the world.

A "common mistake" is when a contract is predicated on a belief that both parties shared without which they would not have entered into the contract and wherein the incorrect belief is not due to significantly greater fault on the part of either party. In essence, the parties made an argument that is about something that does not exist. In that case, it may impossible or inequitable to enforce the contract as agreed.

Simple example: Two parties both believe a truck contains 5,000 pounds of cherries. They make an agreement that one party will buy the 5,000 pounds of cherries in the truck from the other party. Due to a mistake equally attributable by both parties, the truck actually contains 4,500 pounds of cherries. It is now impossible (or inequitable) to enforce the contract as agreed -- would that mean the buyer must put 500 pounds more cherries in the truck? Or would that mean the seller must accept the 4,500 pounds of cherries?

[orcinus]

In this case, the loans that formed the basis of the contract turned out not to be what both sides thought they were

There is no "thought" in a contract.

[JoelKatz]

In this case, the loans that formed the basis of the contract turned out not to be what both sides thought they were

There is no "thought" in a contract.

On the contrary, that's *all* a contract is. A written agreement may be evidence of what the agreement was. But the agreement itself is purely thought. A "contract" is a meeting of the minds.

[orcinus]

A "common mistake" is when a contract is predicated on a belief that both parties shared without which they would not have entered into the contract and wherein the incorrect belief is not due to significantly greater fault on the part of either party. In essence, the parties made an argument that is about something that does not exist. In that case, it may impossible or inequitable to enforce the contract as agreed.

Great. Except none of that applies. Which is why i've made the remark i've made.
THERE IS NO common mistake here. The contract was simple.

A lends X to B
B is obliged to return X+interest to A

That. Is. All.
Everything preceding that has no bearing on that contract. Can you understand that?

[JoelKatz]

Great. Except none of that applies. Which is why i've made the remark i've made.
THERE IS NO common mistake here.

There was a common mistake that Patrick's loan portfolio did not have significant correlated risk due to Pirate exposure. If not for that mistake, neither side would have entered into the agreement.

The contract was simple.

A lends X to B
B is obliged to return X+interest to A

That. Is. All.
Everything preceding that has no bearing on that contract. Can you understand that?

Did you read the transcript? The agreement was not as simple as you make it seem, it was specifically a loan to finance a particular lending strategy. Neither side would have entered into the agreement if not for their mistaken common belief. The lender specifically wanted the assurance that the loans were backed by the strength of Patrick's portfolio. The agreement ties one to the other.

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 08:10:17 <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

What do you think "well that works" means here? It's right before the offer.

[SgtSpike]

Joel - show us an example where your thoughts regarding "common mistake" are upheld in any court of law.

[BadBear]

It's unfortunate Patrick doesn't want to tell his side, cause the available information doesn't look very good for him.

This is what Joel is talking about. http://en.wikipedia.org/wiki/Mistake_%28contract_law%29
I don't think I agree with his conclusions though.

[JoelKatz]

Joel - show us an example where your thoughts regarding "common mistake" are upheld in any court of law.

See any case involving "common mistake". Couturier v. Hastie (5 HL Cas673), Galloway v. Galloway (30 TLR 531), Copper v. Phibbs (LR 2 HL 149), Davis v. Pennsylvania Company (337 PA 456), Cooper v. Phibbs, Great Peace Shipping Ltd v. Tsavliris Salvage, and on and on and on. "Common mistake" is a concept of contract law, it's not something I made up.

What do you think courts do when two parties enter into a contract and then discover that some element of the subject matter of the contract doesn't actually exist due to fault attributable to neither party or substantially equally attributable to both of them?

[Zeeks]

Great. Except none of that applies. Which is why i've made the remark i've made.
THERE IS NO common mistake here.

There was a common mistake that Patrick's loan portfolio did not have significant correlated risk due to Pirate exposure. If not for that mistake, neither side would have entered into the agreement.

The contract was simple.

A lends X to B
B is obliged to return X+interest to A

That. Is. All.
Everything preceding that has no bearing on that contract. Can you understand that?

Did you read the transcript? The agreement was not as simple as you make it seem, it was specifically a loan to finance a particular lending strategy. Neither side would have entered into the agreement if not for their mistaken common belief. The lender specifically wanted the assurance that the loans were backed by the strength of Patrick's portfolio. The agreement ties one to the other.

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 08:10:17 <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

What do you think "well that works" means here? It's right before the offer.

That appears to be more like someone asking pertinent questions before handing over their money than part of the contract between them. That he lied or misled in his answers knowingly or unknowingly would put him more in the wrong.

[clouds]

Patrick's Kraken fund might be an even more clear cut case that Patrick deserves a scammer tag. Patrick guaranteed those deposits, and it is clear that Patrick knew the Kraken assets were correlated and risky.

Approximately 75% of the assets in Kraken are bad Pirate debt via Payb.tc, PPT.A, PPT.B, and PPT.E (as later disclosed in his Kraken newsletter on October 14, 2012). This Pirate debt was purchased after Pirate had already defaulted. Joel can't argue that Patrick didn't know his Kraken assets were correlated, because Patrick specifically chose to put a significant portion of the fund in bad Pirate debt. Joel can't argue that Patrick didn't know the assets were risky, because Pirate had already defaulted.

Is there anybody that invested in the Kraken fund that has requested a withdrawal and hasn't been paid back in full? This might deserve a whole new thread since Kraken was a different fund.

https://bitcointalk.org/index.php?topic=100913.msg1102858#msg1102858

[Bitcoin Oz]

Patrick's Kraken fund might be an even more clear cut case that Patrick deserves a scammer tag. Patrick guaranteed those deposits, and it is clear that Patrick knew the Kraken assets were correlated and risky.

Approximately 75% of the assets in Kraken are bad Pirate debt via Payb.tc, PPT.A, PPT.B, and PPT.E (as later disclosed in his Kraken newsletter on October 14, 2012). This Pirate debt was purchased after Pirate had already defaulted. Joel can't argue that Patrick didn't know his Kraken assets were correlated, because Patrick specifically chose to put a significant portion of the fund in bad Pirate debt. Joel can't argue that Patrick didn't know the assets were risky, because Pirate had already defaulted.

Is there anybody that invested in the Kraken fund that has requested a withdrawal and hasn't been paid back in full? This might deserve a whole new thread since Kraken was a different fund.

https://bitcointalk.org/index.php?topic=100913.msg1102858#msg1102858

Patrick guaranteed pirate debt....and he did so after knowing pirate had defaulted. What a lowlife.

[JoelKatz]

Patrick's Kraken fund might be an even more clear cut case that Patrick deserves a scammer tag. Patrick guaranteed those deposits, and it is clear that Patrick knew the Kraken assets were correlated and risky.

I 100% agree. From what I understand about the Kraken fund, there is no excuse for Patrick not repaying principle to anyone who deposited in this fund. (And I strongly fear this fund may be 100% scam.)

Patrick guaranteed pirate debt....and he did so after knowing pirate had defaulted. What a lowlife.

I believe that the Kraken fund was only supposed to invest in things that Patrick 100% knew had nothing to do with Pirate or any similar kind of risk. So there should be no reason it shouldn't be able to return 100% of principle. (Other than perhaps a liquidity crunch or the like that might slow repayments.)

Update/Correction: The Kraken fund did make risky investments, but only after Patrick 100% knew precisely what those risks were, and he 100% personally guaranteed repayment of principle.

[JoelKatz]

That appears to be more like someone asking pertinent questions before handing over their money than part of the contract between them. That he lied or misled in his answers knowingly or unknowingly would put him more in the wrong.

There's no evidence he lied or mislead. In fact, he explained the factual basis for his incorrect conclusion and those he spoke to drew the same incorrect conclusion from the same facts.

Patrick didn't say, "trust me that X" or "I have secret knowledge that X". He said, "Because of facts A, B, and C, I conclude X". The facts A, B, and C were true. However, the conclusion X did not follow from them. If Patrick is responsible for the damages this mistake caused, so are the other parties who made the very same mistake and made the very same damages occur, drawing the same incorrect conclusion from the same correct facts.

Both parties had facts A, B, and C. Those facts were correct.
Both parties concluded X from A, B, and C. X was incorrect and did not follow from A, B, and C.
Both parties acted on X, jointly causing a loss.
Thus both parties are responsible for the loss and should share it.

[Zeeks]

That appears to be more like someone asking pertinent questions before handing over their money than part of the contract between them. That he lied or misled in his answers knowingly or unknowingly would put him more in the wrong.

There's no evidence he lied or mislead. In fact, he explained the factual basis for his incorrect conclusion and those he spoke to drew the same incorrect conclusion from the same facts.

Patrick didn't say, "trust me that X" or "I have secret knowledge that X". He said, "Because of facts A, B, and C, I conclude X". The facts A, B, and C were true. However, the conclusion X did not follow from them. If Patrick is responsible for the damages this mistake caused, so are the other parties who made the very same mistake and made the very same damages occur, drawing the same incorrect conclusion from the same correct facts.

Both parties had facts A, B, and C. Those facts were correct.
Both parties concluded X from A, B, and C. X was incorrect and did not follow from A, B, and C.
Both parties acted on X, jointly causing a loss.
Thus both parties are responsible for the loss and should share it.

He's the one left at fault without the money he owes though because he was the one taking money and trusting in those things so that he would be able to pay back what he agreed to. Therefore he's the one holding the bag, the one at fault. He willingly opened himself up to this position by partaking in these agreements and being the one taking the money which he agreed to return with interest.

The other people made a mistake but he's the one who made the mistake which caused him to apparently lose a bunch of money he soon owed back to the people who left it with him. That other people may have made the same mistake with the same data he had doesn't change that at all or make it any more ok that he can no longer pay back the money he now owes. He then did some sort of renegotiation of the terms for repayment without any actual negotiation with the people he owed money to.

You are saying that people made a mistake, the same mistake he made. That seems to be true, yes and I don't think anyone disputes that. However, he is the one who owes money and is in default over it, unable to pay it back as he agreed to.

[Zeeks]

As an aside, it does seem like the scammer tag is not always ideal but it's all we have on this forum? Some other tag for borrowers/invesments which fall into default should have their own special tag, perhaps with a default count or color based on severity.. or perhaps based on if they managed to repay what they owe eventually.

So someone could default, they get an angry red DEFAULT tag. They repay half or so and it turns yellow. They repay it all and it turns green. So they had defaulted in the past but repaid all their debts. Could even be like a badge of honor, if someone stuck it out like that and made their mistakes right people might be more likely to do business with them in the future.

[Maged]

I don't think that the 'we both made a mistake' idea is helpful here. Obviously they both made a mistake.

Joel. I'd be fine with this if it was always transparent who made a mistake. However, courts cannot figure this out in most cases. Thus you make simple, predictable rules that assign responsibility independent of who is at fault. That is what civil law should be about (I think).

In other cases, courts can figure out who made a mistake. Then the court can assign blame. That is what criminal law should be about (I think).

In clear-cut cases you assign blame, in vague cases you default to simple, predicatable rules.

The simple predictable rule here is that the debtor is always responsible for his debt (at least before bankruptcy law)

Just to clarify here, the scammer tag is not given out based on civil law, but on criminal law. Thus, this applies to us:

In other cases, courts can figure out who made a mistake. Then the court can assign blame. That is what criminal law should be about (I think).

If we had a "default" tag, that would be a whole different situation, though. For sure, that would be based off of civil law.

Joel, your arguments are absurd.  If a seller agrees to sell 5000 pounds of cherries, but only delivers 4500 pounds, that is on him.  He either needs to make things right by delivering an additional 500 pounds, or renegotiate the contract (i.e., agree with the buyer to only sell 4500 pounds at a lower total price).

Agreed. So, if Patrick doesn't want a scammer tag, he should either pay back as originally agreed or renegotiate in good faith.

[MPOE-PR]

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

Deposit was made, as per an agreement. Deposit was not returned, as per the agreement.

That doesn't mean that a "scammer" tag is what is needed.  It sounds like we have another label and needs to be invented for things of these nature ("In Default" tag, etc...).   There was risk involved when you put deposited your money.  He is making a solid effort to pay people back and keep is creditors apprised of the current situation.  Scamming in my book is a very specific thing that has facts surrounding it that show the person's true intent.  

Intent is the most important aspect of giving this tag out.  We need to make the distinction on someone one intends to do something and someone who doesn't.   If you think otherwise, I would like to see reasoning what else is more important.  Don't mentioned, be broke his word, that isn't scamming per say, externalities do happen and when it did happen in this case, he didn't disappear like a scammer, he is putting real effort forward to make good.  

The important point here is that intent can only be established by examining deeds. Nobody is in a position to posit what intent "is" or "really is" other or outside of what is supported by facts.

You claim (with no basis) that "he is making a solid effort". I show, clearly and so far indisputably that he is not: ~20 BTC coming out in three months on a 500 principal + 100-200 interest deal is neither solid nor effort.

You claim (with dubious basis) that he is keeping the creditors appraised. This is false: he has not been in contact to negotiate beg for a new agreement, as his position behooves him to do. In fact, he has not been in contact at all.

Finally, let me quote myself, maybe on 2nd read it sinks in:

Here's his scam in simple terms:

I. Do the Peter Lambert thing: pretend like you know what you're doing, give out ratings, all that jazz.
II. Take deposits, recallable on demand, at a reasonable rate (1% was, back in August, pretty much tiny).
III. Refuse to repay deposits.
IV. Make a "best effort" repayment of about .9% a week.

This is an out and out scam. Better designed than pirate's, sure, but just as much a scam.

The only other way you could look at it would be "How to sell miner bonds without any miner gear, and without the risk of difficulty dropping". Also a scam.

There's no grounds for you to posit innocence or anything else about some vague "intent" when the construction the facts bear is scammer. Sorry.

Approximately 75% of the assets in Kraken are bad Pirate debt via Payb.tc, PPT.A, PPT.B, and PPT.E (as later disclosed in his Kraken newsletter on October 14, 2012).

This is something we have no knowledge of whatsoever, not being involved in that. However, if indeed the quote is correct I would like to include this by reference to further illuminate why Darlkore's claims above hold no water. If it quacks like a scammer, it can have a scammer tag at the very least until he stops. It's not like these scammer tags come with a beheading, he can earn his way back out of it just fine.

At any rate, the notion of a "default" tag, while maybe appropriate in general, is not appropriate here. It would seem to imply no blame and no wrongdoing, whereas blame and wrongdoing is exactly what we're showing. The man made false representations, which is a polite way of saying he lied, in order to steal money. That's all there is, we're not arguing against the general unfairness of the world and why oh why did our cherry tree not make any cherries this year. We're arguing against the very specific fraudulent behavior of one person who lied and misrepresented themselves for profit.

[eroxors]

Has there been a shift in applying the scammer tag? In the past, as long as the "offender" was in regular communication and working to pay back his debt, he didn't get tagged. Now, it seems that issuing the tag happens immediately and is removed after repayment. Also, doesn't the term "scam" imply malicious intent? Something which cannot be easily proven here.

[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

Deposit was made, as per an agreement. Deposit was not returned, as per the agreement.

That doesn't mean that a "scammer" tag is what is needed.  It sounds like we have another label and needs to be invented for things of these nature ("In Default" tag, etc...).   There was risk involved when you put deposited your money.  He is making a solid effort to pay people back and keep is creditors apprised of the current situation.  Scamming in my book is a very specific thing that has facts surrounding it that show the person's true intent.  

Intent is the most important aspect of giving this tag out.  We need to make the distinction on someone one intends to do something and someone who doesn't.   If you think otherwise, I would like to see reasoning what else is more important.  Don't mentioned, be broke his word, that isn't scamming per say, externalities do happen and when it did happen in this case, he didn't disappear like a scammer, he is putting real effort forward to make good.  

The important point here is that intent can only be established by examining deeds. Nobody is in a position to posit what intent "is" or "really is" other or outside of what is supported by facts.

You claim (with no basis) that "he is making a solid effort". I show, clearly and so far indisputably that he is not: ~20 BTC coming out in three months on a 500 principal + 100-200 interest deal is neither solid nor effort.

You claim (with dubious basis) that he is keeping the creditors appraised. This is false: he has not been in contact to negotiate beg for a new agreement, as his position behooves him to do. In fact, he has not been in contact at all.

Finally, let me quote myself, maybe on 2nd read it sinks in:

Here's his scam in simple terms:

I. Do the Peter Lambert thing: pretend like you know what you're doing, give out ratings, all that jazz.
II. Take deposits, recallable on demand, at a reasonable rate (1% was, back in August, pretty much tiny).
III. Refuse to repay deposits.
IV. Make a "best effort" repayment of about .9% a week.

This is an out and out scam. Better designed than pirate's, sure, but just as much a scam.

The only other way you could look at it would be "How to sell miner bonds without any miner gear, and without the risk of difficulty dropping". Also a scam.

There's no grounds for you to posit innocence or anything else about some vague "intent" when the construction the facts bear is scammer. Sorry.

Approximately 75% of the assets in Kraken are bad Pirate debt via Payb.tc, PPT.A, PPT.B, and PPT.E (as later disclosed in his Kraken newsletter on October 14, 2012).

This is something we have no knowledge of whatsoever, not being involved in that. However, if indeed the quote is correct I would like to include this by reference to further illuminate why Darlkore's claims above hold no water. If it quacks like a scammer, it can have a scammer tag at the very least until he stops. It's not like these scammer tags come with a beheading, he can earn his way back out of it just fine.

At any rate, the notion of a "default" tag, while maybe appropriate in general, is not appropriate here. It would seem to imply no blame and no wrongdoing, whereas blame and wrongdoing is exactly what we're showing. The man made false representations, which is a polite way of saying he lied, in order to steal money. That's all there is, we're not arguing against the general unfairness of the world and why oh why did our cherry tree not make any cherries this year. We're arguing against the very specific fraudulent behavior of one person who lied and misrepresented themselves for profit.

When was the last time you contacted Patrick?

[BCB]

exorors

Yes,  I would have to agree.  Unfortunately there seems to be three things going on in this thread.  

MPOE-PR is trolling/rabble rousing as he is wont to do around these boards.  Why?  Your guess is as good as mine.

Joel is having a very detailed debate about contract law.

And Patrick Harnett is maintaining his dignity by not bothering to respond.

IF augostocroppo would do an analysis of MOE-PR's posts as he has with CharlieContent he would probably identify similar attributes.  Members trolling these board for their own humor and amusement while really adding nothing to any meaningful conversation.