Scammer tag: PatrickHarnett

[Dalkore]

you do owe something back to the system that created your opportunity to prosper

Yes. Miner fees.

What do you feel was the risk you were taking on to capture these profits?

You are aware I'm just the spokesperson, right?

What I don't understand is why your taking such a hardline stance and not working with him to get paid back?  

Matter of policy. As explained afore, negotiating with scammers makes no sense.

such a large deposit?  

According to PatrickHarnett himself, it was by no means a large deposit at all, let alone such a large one.

Spokesperson?  Really, you don't sound like an impartial spokesperson.   You talk with too much authority for that.

Scammer, so you invest with someone, the investment goes bad and they are a scammer so you don't work with them to get your money back.  Sounds like a different motive.  Has you not gotten any principle back or gotten communications from Patrick about ETA for repayment.  This sounds personally motivated to swear his name, and not actually accept a delayed payment.

Sure, maybe it is a small deposit, but still BTC500 isn't something to think is small, it is in effect 1/42000th of all the Bitcoins in existence.  No matter, this doesn't add to the dialogue.

Miner fees, sorry I thought we were having a wider discussion about ideology outside of Bitcoin.  My bad.

[1715430188]

1715430188

[JoelKatz]

1.  MP didn't know who PH's customers were.

True but how would that have made any difference?

2.  Those customers swore they weren't invested in pirate to PH, not to MP - more accurately, MP took PH's word that they'd said such - as MP COULD NOT verify that due to 1.

MP could not verify them even if she knew who they were. What would she have done other than ask them? You think they would lie to PH but tell the truth to MP? PH knew Patrick's methodology. If it was unsound or insufficient, that was a common mistake.

3.  PH had responsibility to assess the credibility of his customers' claims not to be invested in pirate because a) They were his customers,  b) MP couldn't due to 1.

And Patrick did assess the credibility of his customers. It's not like his method was a secret.

PH had either been told (or not told) by his customers that they weren't invested in pirate.
PH either did or did not do due diligence on those customers.

MP knew that PH claimed he was satisfied that his customers weren't invested in pirate.

MP's knowledge about the specific investments was limited to ONLY what PH divulged.  There's no equality of information there.

There was nothing PH knew that would have changed MP's view. They agreed on the common set of facts and they both drew the same incorrect conclusion from those facts.

"Everyone knew PH was invested indirectly in pirate"
"PH didn't know he was invested in pirate"
"MP didn't know PH was invested in pirate"

It's blatantly obvious that the first of those three statements directly contradicts the last two.

If everyone was rational, this would be quite correct. But when it comes to greed, people have a rather bizarre ability to compartmentalize and isolate their knowledge. With subtly different senes of knowing, all of these were true. It's just like how every gambler knows that the odds are against them and many gamblers believe they will be the exception.

That lots of others also invested in PH also disproves your key assertion (that it was common knowledge PH was at risk to pirate exposure) - as noone who wanted pirate exposure would have invested at 1% per week.

It just shows what we all know, that a lot of people gamble stupidly. Everyone who invested in Pirate knew that what he was saying was too good to be true, yet in a sense those investors believed it.

Your key false assumption is that all people are fully rational and only hold logically consistent beliefs.

[MPOE-PR]

Spokesperson?  Really, you don't sound like an impartial spokesperson.   You talk with too much authority for that.

I did not say impartial. The point is that it makes no sense to ask me what you tried to ask me, as I have no way of knowing.

Scammer, so you invest with someone, the investment goes bad and they are a scammer so you don't work with them to get your money back.  Sounds like a different motive.  Has you not gotten any principle back or gotten communications from Patrick about ETA for repayment.  This sounds personally motivated to swear his name, and not actually accept a delayed payment.

Are you aware the deposit was part of a CDO series? "Delayed payment" does not work in this context. On time or bust.

But no, PatrickHarnett has not been in contact (as is typical for scum of the sort).

Luckily for PH I don't think any of his victims are mods - so he's probably safe.

This is not the first time someone's raised this point and I do think it'd be pretty sad if it were in fact true.

So far, in all honestly, I have no reason to suspect it is. Obviously there may be plenty I don't know that'd support that claim, but as far as I know, it's not the case.

[Deprived]

1.  MP didn't know who PH's customers were.

True but how would that have made any difference?

2.  Those customers swore they weren't invested in pirate to PH, not to MP - more accurately, MP took PH's word that they'd said such - as MP COULD NOT verify that due to 1.

MP could not verify them even if she knew who they were. What would she have done other than ask them? You think they would lie to PH but tell the truth to MP? PH knew Patrick's methodology. If it was unsound or insufficient, that was a common mistake.

3.  PH had responsibility to assess the credibility of his customers' claims not to be invested in pirate because a) They were his customers,  b) MP couldn't due to 1.

And Patrick did assess the credibility of his customers. It's not like his method was a secret.

PH had either been told (or not told) by his customers that they weren't invested in pirate.
PH either did or did not do due diligence on those customers.

MP knew that PH claimed he was satisfied that his customers weren't invested in pirate.

MP's knowledge about the specific investments was limited to ONLY what PH divulged.  There's no equality of information there.

There was nothing PH knew that would have changed MP's view. They agreed on the common set of facts and they both drew the same incorrect conclusion from those facts.

"Everyone knew PH was invested indirectly in pirate"
"PH didn't know he was invested in pirate"
"MP didn't know PH was invested in pirate"

It's blatantly obvious that the first of those three statements directly contradicts the last two.

If everyone was rational, this would be quite correct. But when it comes to greed, people have a rather bizarre ability to compartmentalize and isolate their knowledge. With subtly different senes of knowing, all of these were true. It's just like how every gambler knows that the odds are against them and many gamblers believe they will be the exception.

That lots of others also invested in PH also disproves your key assertion (that it was common knowledge PH was at risk to pirate exposure) - as noone who wanted pirate exposure would have invested at 1% per week.

It just shows what we all know, that a lot of people gamble stupidly. Everyone who invested in Pirate knew that what he was saying was too good to be true, yet in a sense those investors believed it.

Your key false assumption is that all people are fully rational and only hold logically consistent beliefs.

I just don't see how you can confidently say "There was nothing PH knew that would have changed MP's view. ".  Do you actually KNOW who all PH's customers were at the time that deal was made?  Do you actually KNOW what steps he took to ensure they weren't going to use the funds to invest in pirate?  Unless YOU know EVERYTHING PH knew you can't possibly give any credible comment on how much of that someone else would have known.

Now IF PH's methodology was simply to ask people "Are you going to invest this money in pirate?" AND IF it was well known (KNOWN, not suspected) that was his entire methodology then you might have a point.  Is this what you're claiming?

On the general issue that people gamble whilst (at least partially intentionally) ignoring the risks I have no argument.  Most idiots (as opposed to rational people) look at pretty obvious ponzi schemes and try to look for reasons to believe they're legitimate - when they should, rationally, be looking for reasons to confirm they're NOT legitimate.  So they get into a mind-set of effectively trying to persuade/tallk themselves into investing when they should be doing the opposite - and insisting that the operator give full disclosure, answer in detail all queries etc.

But that's neither here nor there in this specific case.  MP wasn't investing in an obvious ponzi - in fact appeared to want to totally avoid pirate exposure.  MP's biggest mistake was likely assuming PH was competent to run his business - which WAS an erroneous belief both parties had in common: however someone fooling others that they have more competence than they do has never been an issue which, on its own, will invalidate a contract.

When this deal occurred, I also shared the mistaken belief that PH was likely competent to run his business.  When offering loans the most basic of skills needed is the ability to properly vet loan applications to determine ability to repay.  This obviously includes assessing the general reliability of the individual but also includes determining the means for which the loan would be used.  If your contention is that he wasn't doing that (or was just asking, not verifying) then obviously his business was just a disaster waiting to happen - but that doesn't mean that AT THAT TIME all and sundry knew that.  Even if there's threads pointing this out (or suggesting it) that doesn't mean that everyone read those threads - or that those who did read them gave more weight to the views of the posters than to a pillar of the community like PH.  Where's even ONE thread where there's general consensus that PH's investments MUST have heavy pirate exposure?

Just because YOU may have believed something at that time - which subsequently turned out to be correct - does not mean (or give you the right to assert) that everyone else should have realised the same thing.  And it's still a big leap from "should have known" to "did know" - where the latter would be the relevant condition.

As for your claim that not knowing who PH's customers were was irrelevant, thta makes no sense.  Are you asserting that EVERY customer of PH's invested the money in pirate and defaulted?  If not, then you already accept that SOME people borrow money at PH's rates and DON'T invest in pirate/similar.  So we then have two groups of people:

1.  Those who borrow and invest in pirate/similar,
2.  Those who borrow and don't invest in pirate/similar.

How do we find out how many of each?  Either:

1.  Investigate the customers,
2.  Ask PH.

MP didn't have the list of customers, so had to use #2.  PH was confident that pirate exposure was minimal/zero.  PH should know - from whatever due diligence he performed before (and after) loaning.  Doubting his word on that would make no sense - if you didn't believe him competent to undertake even the most basic requirements of successful loaning (doing enough due diligence to have decent confidence in repayment - which includes determining a use that isn't random gambling/spunking away on ponzis) then you shouldn't even be considering investing in him anyway.

I repeat in case you missed it.  Unless you claim ALL borrowers from PH were pirate investors then you NEED the list to work out whether, at any point, his exposure to pirate is 0%,10%, 30%, 50% or 100%.

PH fooled people (including himself) that he was competent to run a lending business/bank.  Your argument, at root, is that because people were stupid enough to be fooled by PH they deserve to lose out and that he shouldn't be punished for it.  That's a scammer's charter - aside from anything else.  You're basically saying that if you can talk people into an investment that, with full 20/20 hindsight vision, is clearly bad then they're as much as fault as the individual offering the investment (as both of them should have known it was too good to be true).  You also massively over-rate the weight people give to whatever threads (at that time) supported your proposition that PH was incompetent, out of his depth and very clearly exposed to pirate.

[JoelKatz]

<snip>

Your argument is that Patrick's business method was sound, he just couldn't quite figure out how to get it right. Perhaps he used the wrong magic words. Perhaps there was one little thing he forgot to do. If he had just asked one more question, checked one more reference, it all would have worked. You have learned absolutely nothing from this fiasco. I hope you are in the minority.

[SAC]

....
You have learned absolutely nothing from this fiasco. I hope you are in the minority.

From what I have seen here I highly doubt it, seems like they have never met a scam they would not like to throw their money away on around here..

[Deprived]

<snip>

Your argument is that Patrick's business method was sound, he just couldn't quite figure out how to get it right. Perhaps he used the wrong magic words. Perhaps there was one little thing he forgot to do. If he had just asked one more question, checked one more reference, it all would have worked. You have learned absolutely nothing from this fiasco. I hope you are in the minority.

No, my argument is NOT that PH's business method was sound.  My argument is that you aren't entitled to assume that everyone KNEW that he was exposed to pirate risk.  And you sure aren't entitled to expect those PH owes money to to take a large haircut just because somewhere on the forums you and/or your friends posted that PH was incompetent and/or exposed to pirate so they should have taken your word for it over PH's.

I've never invested in ANY of the loan/undisclosed businesses - be it pirate, PH or whoever (sole exception being trading OBSI.HRPT AFTER it had collapsed).  In an anonymous arena like bitcoin I'm just not interested in investing in undisclosed businesses - and loan companies here are undisclosed businesses one step removed from me.  If I don't have the information to assess the risks myself then I simply don't invest (and I invest short-term rather than long-term anyway as most 'businesses' here will never make a profit for long-term investors anyway - e.g. nearly all mining bonds/stocks).

I object to your insistence that you have the right to assert that something was common knowledge whilst, at the same time, also insisting that those directly involved didn't know it.  I also object to you attempting to make some kind of defence for PH which he's never raised or supported himself.  If he has a defence against the claims against him then HE should make it - rather than you dragging his name through the mud claiming he was so obviously incompetent that everyone on the forums knew he was exposed to pirate except himself and MP.  And I finally object to your claim that if someone misrepresents the nature of their assets when making a deal then it's the fault of the other party if that party chooses to believe them.

That's why I'm posting - not because I invested in pirate or PH - so not quite sure what lesson it is I'm supposed to have learned but haven't.

[MPOE-PR]

Your key false assumption is that all people are fully rational and only hold logically consistent beliefs.

That's particularly....funny coming from the one and only person actually shown to hold logically inconsistent beliefs in this very thread. Repeatedly.

I believe at this point the only way forward is to place Joel Katz under the tutelage of some sane and respected community member for his own protection, seeing how he is either mentally ill or otherwise very, very confused.

It would be from now on at the very least immoral for anyone to engage in any sort of commerce or transaction with Joel Katz, given what we now know of his mental disabilities.

Where's even ONE thread where there's general consensus that PH's investments MUST have heavy pirate exposure?

There's a thread showing the general consensus the other way here.

Note the date of the first Joel Katz posts in there, and note what he bases his sudden knowledge of banking and finance on: some passing remark by Gavin. Apparently discovering in September what "everyone knew" before August is a-ok, and apparently the gospel words of Gavin (who is neither competent to discuss such things as contemplated in the agreement we have before us here, nor was in fact discussing such things as contemplated in the agreement we have before us here) can be bent so that 1.5 = 1 and so forth. Simply put Joel Katz is mentally ill.

The particularly offensive thing in all of this is that the mentally ill (as opposed to rational people) come to make completely irrational statements which, upon being proven both false and logically inconsistent are merely repeated, all this in what is declared to be a defense of reason. And then the poor idiot purports to have taken some sort of higher ground, in his own mind. Sad to watch, really.

Dont worry, I am sure someone will care enough to read all of that.

My general expectation is that those who cnat raed won't.

In other news, we've commissioned a little art piece to commemorate the ludicrous in this thread. Here it is:



Let us forever remember, aside from the quote starting this post, that computer programmers are not simply on the strength of that to be regarded as competent in any other field, including basic logic, basic law, basic finance or basic anything, in spite of an uncanny ability to produce text strings if given a keyboard - not the only characteristic they share with the proverbial monkeys.

[AndrewBUD]

That's a cute pic.... at least you can find some humor in this

[augustocroppo]

Let us forever remember, aside from the quote starting this post, that computer programmers are not simply on the strength of that to be regarded as competent in any other field, including basic logic, basic law, basic finance or basic anything, in spite of an uncanny ability to produce text strings if given a keyboard - not the only characteristic they share with the proverbial monkeys.

What are you qualified for? What are you credentials? What are your competencies?

[JoelKatz]

That's why I'm posting - not because I invested in pirate or PH - so not quite sure what lesson it is I'm supposed to have learned but haven't.

Do you think Patrick's business model was fundamentally sound? Be honest.

[repentance]

Yes we can, and do.  It is simple.  Look at the rates people pay for loans over in the loan thread.  All you need to do to make a profit is borrow money at a rate below the rate people will pay for loans - and avoid getting ripped off by people who default on their loans.

Well, and you also need to take all the risk yourself and still be willing to settle for only a sliver of the profit. And you have to stubbornly refuse to pay back your ultra-high-interest debt even though there's no possible reason you still need it.

Joel, what has changed your opinion since you posted this in the other thread?

In that thread Patrick posted that

Outside of the BS&T account, as of today, I have 10,794 BTC outstanding in loans and 10,586 BTC held on deposit (plus 160 in the 7Seas fund).  This is the core business of StarFish BCB and what generates the return for people looking for something other than BS&T exposure.

That seems to make it fairly obvious that any significant level of default would leave Patrick struggling to repay his depositors in a timely manner.

You literally stated in that thread that investors had no way to assess risk.  Now you seem to be arguing the opposite.

The main problem is that investors have no way to assess risk. Funds compete based on the reward, which creates a huge incentive to increase risk.

https://bitcointalk.org/index.php?topic=92279.msg1160524#msg1160524

[Bitcoin Oz]

PH deserves a scammer label for investing customers money into pirate and claiming it was backed by his own funds which turns out to be patently false in the case of Kraken fund at least. He deserves one as much as NcKrazze and others who did exactly the same bait and switch.

[JoelKatz]

You literally stated in that thread that investors had no way to assess risk.  Now you seem to be arguing the opposite.

The main problem is that investors have no way to assess risk. Funds compete based on the reward, which creates a huge incentive to increase risk.

https://bitcointalk.org/index.php?topic=92279.msg1160524#msg1160524

You're cutting out the context which was me arguing that Patrick's business model is fundamentally unsound even just considering uncorrelated risk. I was arguing that there's no way for investors to assess risk and come to any conclusion other than that the risk must be extraordinarily high. Here's what immediately follows the part you quoted:

"Fundamentally, it's this simple: If the fund operator is not making decent money, there's no good explanation for why they'd go to all this trouble and risk other than that it's a scam. If the fund operator is making decent money and not exposing their investors to extreme risk, the first thing they'd do with the money they're making, if they're not an idiot, is pay down all their ultra-high-interest debt."

In other words, Patrick's business model fundamentally makes no sense, the risks would have to be enormous. That's the same thing I'm arguing here.

[augustocroppo]

PH deserves a scammer label for investing customers money into pirate and claiming it was backed by his own funds which turns out to be patently false in the case of Kraken fund at least. He deserves one as much as NcKrazze and others who did exactly the same bait and switch.

Of course, where is the evidence which indicates that?

[augustocroppo]

In other news, we've commissioned a little art piece to commemorate the ludicrous in this thread. Here it is:

You forgot to indicate the source of your amazing piece of evidence:

https://bitcointalk.org/index.php?topic=122881.0

Economy > Marketplace > Services > Drawing contest, win 5 BTC

Pretty much the same deal as last time, except we want a truck carrying a pair of iconic cherries. (Iconic in this context means something immediately and indubitably recognizable as such. Leaf optional.)

Specs:
 - 155px by 68px, png.
 - cartoonish style (think of the children!).
 - strong colors.

As always we are looking for ORIGINAL ARTWORK ONLY. Amaze me.

Improved image 

The winner is rini17 - please post your addy. Honorable mention for kakobrekla. Thanks everyone!

[Deprived]

That's why I'm posting - not because I invested in pirate or PH - so not quite sure what lesson it is I'm supposed to have learned but haven't.

Do you think Patrick's business model was fundamentally sound? Be honest.

Well, looking at what happened it obviously wasn't (whatever his steps were to ensure his deposits were pirate-free, those steps were clearly woefully inadequate). But what we NOW know isn't particularly relevant to the discussion in this thread.

At the time I had no idea whether it was viable or not.  As stated earlier, I avoid investing in anything where the business is undefined.  With this sort of lending business, the recipients' businesses are unknown to me - hence I can't assess the risk so won't touch the investment.  That's a decision I've made because there's little/no ability and/or willingness for lenders to take action against defaulters - so unless I can be confident there's likely to be no reason for default I won't invest.

The issues isn't whether his business model was sound anyway - it's whether it was KNOWN to be unsound.  We already know that wasn't accepted by all - you've already accepted neither PH or MP knew it (or even believed it) and have yet to demonstrate that any significant number of people believed it.

[JoelKatz]

Well, looking at what happened it obviously wasn't (whatever his steps were to ensure his deposits were pirate-free, those steps were clearly woefully inadequate). But what we NOW know isn't particularly relevant to the discussion in this thread.

It is relevant because both participants believed at the time that it was. And there is no evidence that one party was more at fault in this belief than the other. Neither party would have entered into the agreement had they known this. So this is a common mistake.

The issues isn't whether his business model was sound anyway - it's whether it was KNOWN to be unsound.  We already know that wasn't accepted by all - you've already accepted neither PH or MP knew it (or even believed it) and have yet to demonstrate that any significant number of people believed it.

Well then you've made the first part of my case for me. If they both believed it was sound, yet it wasn't, then that's a common mistake.

When you have a common mistake such that neither participant to a contract would have entered into the contract but for the mistake, unless there's substantially greater fault for the mistake on one side than the other, the parties should split the harm that flowed from the shared mistake. So long as one party isn't significantly at greater fault than the other, it's inequitable to enforce the contract as agreed.

Common mistake doesn't require the mistake to be negligent or culpable. It just requires both parties to be wrong about something critical to the agreement.

Once you agree that both parties had a false belief and that neither party would have entered into the contract without that false belief, the next issue is whether the belief is at the core to the contract. My position is that the discussions that formed the agreement make it clear that the belief is at the core of the agreement -- the contract was premised on the soundness of Patrick's business model and his lack of significant correlated Pirate exposure. Generally, showing that neither party would have entered into the agreement but for the mistaken belief is sufficient to show that it's at the core of the contract. And then the next step is to figure out how to equitably split the damages.

The common sense version of the doctrine is this: A contract states what happens under various conditions. But if neither party believed that a particular condition could happen, then their agreement couldn't have covered what should happen under that condition. (Unless it has specific "catch all" terms of some kind.) Thus, you can't follow the contract to decide what to do in that condition, you have to judge what's fair.

[bitfoo]

PH deserves a scammer label for investing customers money into pirate and claiming it was backed by his own funds which turns out to be patently false in the case of Kraken fund at least. He deserves one as much as NcKrazze and others who did exactly the same bait and switch.

Of course, where is the evidence which indicates that?

The Kraken fund was supposed to be 100% backed by his personal funds. (Note to self: Why would an investment ever promise 100% backing of losses and still send you profits? What's in it for them?)

Well, as it turns out, there's no such thing as a free lunch.

An email was sent by PatrickHarnett two days ago to fund investors that the 100% backing didn't really exist. Since a large percentage of the fund was put into pirate debt, Kraken is now officially in default. The higher of 100 BTC or half the pending balance of each account has already been paid back, from liquidation of personal assets. This allegedly adds up to 75% of the entire fund value. There is still a promise that the remaining 25% will be paid back, if ever recovered from the "toxic" and illiquid assets held.

I'm not sure if the above email should be made public, but any of the Kraken investors can attest to the above. Even if the Starfish BCB issue is ignored entirely, I believe a scammer tag is appropriate purely on the basis of misrepresentation of the Kraken fund.

[MPOE-PR]

You forgot to indicate the source of your amazing piece of evidence

It's not evidence you idiot. Seriously, how do you manage to breathe and type?

At the time I had no idea whether it was viable or not.  As stated earlier, I avoid investing in anything where the business is undefined.

You might want to give a look to MPOE bonds then. Quite well defined.

The Kraken fund was supposed to be 100% backed by his personal funds. (Note to self: Why would an investment ever promise 100% backing of losses and still send you profits? What's in it for them?)

Well, as it turns out, there's no such thing as a free lunch.

An email was sent by PatrickHarnett two days ago to fund investors that the 100% backing didn't really exist. Since a large percentage of the fund was put into pirate debt, Kraken is now officially in default. The higher of 100 BTC or half the pending balance of each account has already been paid back, from liquidation of personal assets. This allegedly adds up to 75% of the entire fund value. There is still a promise that the remaining 25% will be paid back, if ever recovered from the "toxic" and illiquid assets held.

I'm not sure if the above email should be made public, but any of the Kraken investors can attest to the above. Even if the Starfish BCB issue is ignored entirely, I believe a scammer tag is appropriate purely on the basis of misrepresentation of the Kraken fund.

And the evidence just keeps on piling and piling and piling....