Scammer tag: PatrickHarnett

[Namworld]

Joel, you are actively stopping this debate from moving forward.

In my mind, what we need to know is quite simple:

Should Patrick not recover any coins from his Kraken Pirate investments, will he back contributed capital as he stated?

Contributed capital is backed by my personal funds.

He agreed to that for Kraken Fund and that it well looks like a scam. He's disagreeing for the Starfish deposits that risk was not shared. The statement about the backing by personal funds was made for the Kraken Fund only.

[MPOE-PR]

That's precisely what happened here. Both sides were equally culpable in their mistaken belief that Patrick's business model was sound and that his loan portfolio was largely free of correlated risk. Everything they said to each other reinforced and flowed from that shared mistake belief. The damages flowed directly from that mistaken belief.

This is a false statement you have for the first time introduced on November the 5th:

There's no evidence this was a scam. In fact, everything I can see suggests that it was simply a common mistake.

and since repeated it 43 (that's forty three) times without any actual substantiation (if we don't count "everybody knows") and with no actual change.

The statement, illogical and untenable such as it is, was demolished by pretty much everyone who bothered to consider the matter, among which:

I'll have to disagree with you here JoelKatz.

The contract was made on assumptions that Patrick made, sure.  But that doesn't mean he can back out of his contract scot-free just because his assumptions were wrong.

[...]

We're hitting Patrick's Bitcoin community "credit score" because he failed to hold up his end of the bargain.

on the common understanding that he had no or limited Pirate exposure.

No. It was based on Patrick's representation to that effect. Your attempts to represent this as a "common mistake" are unseemly and quite frankly are doing a lot of damage to your own credibility.

looks like Hartnett took the loan, and thus the obligation to repay.  further, he misrepresented his exposure to his creditors.

mistake is his.  scammer/default.

Seems odd that there is even an argument. PatrickHarnett is supposed to have paid back some Bitcoins and has not. I am sure there are reasons for this but that still does mean he is in default. Paying back little bits of what he owes doesn't change that.

Or, do Bitcoins operate on a different set of logic?

Joel's arguments are really dumb. Patrick was acting as a bank. Charging higher interests for loans vs paying deposits, with the assumptions that the difference would more than make up for defaults in the loans with a little profit left for him. The fact that Patrick loaned out money to people who were investing in pirate is not anyone else's fault but Patrick's, he should have either been more careful with who he was loaning to or charged a higher interest rate. You don't expect your bank to pay you half of your usual percentage rate on a CD or savings account because more people foreclosed on their homes than the bank suspected?

The argument would be that you can't look to the contract because the contract doesn't say what happens if the cherries weigh 4,500 pounds. Everything written in the contract is based on the assumption that the cherries weigh 5,000 pounds. (Unless it contains some clause about the weight, of course.) Here, it is clearly unjust to enforce the contract as agreed because the agreement was predicated on the shared belief.

That's a bad analogy. Patrick Harnett had full control over who he lent to in order to reduce correlated risk. He had information on what exactly applicants claimed to be using the money for and the ability to demand as much evidence of this as necessary. Based on this evidence, he falsely assumed that his borrowers weren't exposed to Pirate and got screwed - that's the incorrect belief that's the problem here, and the people who loaned Patrick money didn't have this information! They had to rely on Patrick's promise that he was competent to vet applicants and that he'd made sure not to lend money to people who'd just invest it in Pirate.

A closer analogy would be if one party entered into a contract in which they gave another party money which the second party was to buy a lorry-load of cherries with, and they'd split the profit from reselling them. If the second party then goes and buys off the back of a truck in some parking lot and gets crates full of rubble instead, which party should be liable?

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?

But I think we all agree that a person who borrows some Bitcoins fully intending to pay them back but then can't pay them back (say they lost their job) deserves a scammer tag.

So why on earth doesn't Harnett then?

I thought your argument was that Harnett's lenders are equally to blame for any problems they have experienced due to his default because they should have done more due diligence before lending to him.

You're repeating the same fallacy again and again.  The two cases aren't remotely similar.

Not only is your argument logically inconsistent ("everyone knew X",  "Except the people who had the most interest in knowing X", "And specifically except the only person who COULD know X"), it's also totally irrelevant anyway.  At no stage has PH claimed he should be released from his obligations because "everyone who invested must have known I was exposed to pirate so should take a massive haircut if they ever get paid back as their ignorance trumps my incompetence.".

Seems to me like PH made some errors of judgment, was unable to fulfil his commitments, still accepts he has those commitments but is unable/unwilling to resolve them in any sort of timely manner.  As such there's no point him posting here - as he isn't disputing any of MP's facts or what he owes.  If policy was consistent then I'd actually expect him to get a tag about same time after default as nefario did (both broke an off-forum agreement - more clearly tbh in PH's case).  Both have reasons outside their own control why they believed they had no choice but to break existing agreements.  Both, arguably, should have known that risk existed (in PH's case by properly doing due diligence on how his customers were using their loans).  Luckily for PH I don't think any of his victims are mods - so he's probably safe.

The integrity that comes from taking an unpopular position because you believe it is correct and because you believe it is what the community needs to hear.

I'm sorry I've been holding back from commenting on this thread (as I've never had any business dealings with Patrick and thus this topic is really none of my concern) but now with that comment I must interject.

This logic of yours is NOT what the community needs to hear.

Basically, a cut and dry case of a shill trying to scream louder than everyone and thus enact his lie as some semblance of truth.

[augustocroppo]

I had a short conversation with Theymos regarding this thread. From what was clarified to me, it is unlikely that Patrick will receive a scammer tag while he keeps trying to repay or to renegotiate his obligations. Since JoelKatz has already established that the mutual agreement was based on common mistake, and Mircea Popescu's spokesperson has already indicated that there is not a signed contract, the furthering discussion of this matter is useless.

Mircea Popescu is free to come to this forum and renegotiate his mutual agreement with Patrick.

Regarding the Kraken fund issue, I advise Patrick's investor to open another thread and provide evidence which indicates that he was trying to defraud or to deceive his investors.

[cunicula]

I had a short conversation with Theymos regarding this thread. From what was clarified to me, it is unlikely that Patrick will receive a scammer tag while he keeps trying to repay or to renegotiate his obligations. Since JoelKatz has already established that the mutual agreement was based on common mistake, and Mircea Popescu's spokesperson has already indicated that there is not a signed contract, the furthering discussion of this matter is useless.

Mircea Popescu is free to come to this forum and renegotiate his mutual agreement with Patrick.

Regarding the Kraken fund issue, I advise Patrick's investor to open another thread and provide evidence which indicates that he was trying to defraud or to deceive his investors.

LOL. Funny how libertarians are so comfortable writing in the style of Big Brother. Perhaps libertarianism is mostly about jealousy and there is not much else to it.

[augustocroppo]

LOL. Funny how libertarians are so comfortable writing in the style of Big Brother. Perhaps libertarianism is mostly about jealousy and there is not much else to it.

Would you care to explain how the above quote relates to this thread?

[MPOE-PR]

I had a short conversation with Theymos regarding this thread. From what was clarified to me, it is unlikely that Patrick will receive a scammer tag while he keeps trying to repay or to renegotiate his obligations. Since JoelKatz has already established that the mutual agreement was based on common mistake, and Mircea Popescu's spokesperson has already indicated that there is not a signed contract, the furthering discussion of this matter is useless.

Mircea Popescu is free to come to this forum and renegotiate his mutual agreement with Patrick.

Regarding the Kraken fund issue, I advise Patrick's investor to open another thread and provide evidence which indicates that he was trying to defraud or to deceive his investors.

Who are you again?

O wait, some random idiot with delusions of self importance?

For the record: PatrickHarnett made no attempt to either negotiate or even contact us about his default, and he has made no effort towards repayment. In fact, he's not as much as represented himself here. Which means that you're in the best case lying about your conversation with theymos.

I had a short conversation with Theymos regarding this thread. From what was clarified to me, it is unlikely that Patrick will receive a scammer tag while he keeps trying to repay or to renegotiate his obligations. Since JoelKatz has already established that the mutual agreement was based on common mistake, and Mircea Popescu's spokesperson has already indicated that there is not a signed contract, the furthering discussion of this matter is useless.

Mircea Popescu is free to come to this forum and renegotiate his mutual agreement with Patrick.

Regarding the Kraken fund issue, I advise Patrick's investor to open another thread and provide evidence which indicates that he was trying to defraud or to deceive his investors.

LOL. Funny how libertarians are so comfortable writing in the style of Big Brother. Perhaps libertarianism is mostly about jealousy and there is not much else to it.

Augustocroppo is nothing but an idiot. Idiocy is indeed about jealousy, inability and not much else. Libertarianism really has nothing to do with it, if he "were" a fireman he'd still be Augustocrappo the Idiot.

[augustocroppo]

Who are you again?

O wait, some random idiot with delusions of self importance?

For the record: PatrickHarnett made no attempt to either negotiate or even contact us about his default, and he has made no effort towards repayment. In fact, he's not as much as represented himself here. Which means that you're in the best case lying about your conversation with theymos.

Augustocroppo is nothing but an idiot. Idiocy is indeed about jealousy, inability and not much else. Libertarianism really has nothing to do with it, if he "were" a fireman he'd still be Augustocrappo the Idiot.

I am the person with good relationships with the forum participants since my registration. I am sure that no one had included my username in an ignore list. I became a forum VIP member by my own merit. I have a great deal of respect for Theymos because his background and his actions. We even share same preferences for books, games and other activities.

You are completely the contrary of my character. Your relationship with the forum participants have been bad since your inception. You never donated for the welfare of this forum. Your username is present in various ignore lists. You have no respect for Theymos neither you share any preferences with him.

I recommend you to do a mirror check. I am sure Mircea Popescu can obtain one for you.

[MPOE-PR]

I am the person with good relationships with the forum participants since my registration. I am sure that no one had included my username in an ignore list. I became a forum VIP member by my own merit. I have a great deal of respect for Theymos because his background and his actions. We even share same preferences for books, games and other activities.

You are completely the contrary of my character. Your relationship with the forum participants have been bad since your inception. You never donated for the welfare of this forum. Your username is present in various ignore lists. You have no respect for Theymos neither you share any preferences with him.

I recommend you to do a mirror check. I am sure Mircea Popescu can obtain one for you.

So wait, have you obtained the oh so revered VIP thingie "on your own merit" or did you just donate like everyone else?

[augustocroppo]

So wait, have you obtained the oh so revered VIP thingie "on your own merit" or did you just donate like everyone else?

Yes, I donated as everyone else and the donation represents my merit. To pay for a certain status is also a matter of merit in case you do not know. The 50 BTC which I donated were obtained from my own effort.

You... Well... You paid 5 BTC for a person to design a truck with cherries and you did not obtained any merit with that.

 

[MPOE-PR]

Yes, I donated as everyone else and the donation represents my merit. To pay for a certain status is also a matter of merit in case you do not know. The 50 BTC which I donated were obtained from my own effort.

You... Well... You paid 5 BTC for a person to design a truck with cherries and you did not obtained any merit with that.

 

And if you were on the football team AND had a car, you lost your virginity that year, guaranteed. High School is where the social experiment develops, where you're put on a life track. It's a wonder so many survive it into adulthood. Why didn't my parents explain all this to me? Why were there boys better prepared to be men, and others just left to flounder?

Is this you?

[theymos]

I haven't investigated this much. I didn't read most of this thread. Maybe I'm totally wrong about my facts, but my current understanding is:

PatrickHarnett probably did break some contracts, though he never intentionally broke them and in fact he tried to take some precautions to avoid breaking the contracts. Still, he has an obligation to pay back the victims of his broken contracts at least the money that his victims directly lost (ie. the loan principal). Maybe he has a moral obligation to continue following the exact terms of the contract, but that seems to be impossible, and I'm not going to enforce that using the scammer tag.

When someone breaks a contract and ends up having to slowly repay debt, sometimes they get a scammer tag first and the tag is removed once their debts are paid. But since PatrickHarnett seems to be putting a lot of effort into paying his debts, and since he's always acted pretty honestly, I tend to think that he should not get a scammer tag unless he stops making payments on his debt.

[jasinlee]

I haven't investigated this much. I didn't read most of this thread. Maybe I'm totally wrong about my facts, but my current understanding is:

PatrickHarnett probably did break some contracts, though he never intentionally broke them and in fact he tried to take some precautions to avoid breaking the contracts. Still, he has an obligation to pay back the victims of his broken contracts at least the money that his victims directly lost (ie. the loan principal). Maybe he has a moral obligation to continue following the exact terms of the contract, but that seems to be impossible, and I'm not going to enforce that using the scammer tag.

When someone breaks a contract and ends up having to slowly repay debt, sometimes they get a scammer tag first and the tag is removed once their debts are paid. But since PatrickHarnett seems to be putting a lot of effort into paying his debts, and since he's always acted pretty honestly, I tend to think that he should not get a scammer tag unless he stops making payments on his debt.

+1

[Dalkore]

I haven't investigated this much. I didn't read most of this thread. Maybe I'm totally wrong about my facts, but my current understanding is:

PatrickHarnett probably did break some contracts, though he never intentionally broke them and in fact he tried to take some precautions to avoid breaking the contracts. Still, he has an obligation to pay back the victims of his broken contracts at least the money that his victims directly lost (ie. the loan principal). Maybe he has a moral obligation to continue following the exact terms of the contract, but that seems to be impossible, and I'm not going to enforce that using the scammer tag.

When someone breaks a contract and ends up having to slowly repay debt, sometimes they get a scammer tag first and the tag is removed once their debts are paid. But since PatrickHarnett seems to be putting a lot of effort into paying his debts, and since he's always acted pretty honestly, I tend to think that he should not get a scammer tag unless he stops making payments on his debt.

Theymos, a suggestion that has been made that I think does have merit is making a "In Default" tag for people in debt that can be evidenced?  What do you think?

[BorderBits]

I haven't investigated this much. I didn't read most of this thread. Maybe I'm totally wrong about my facts, but my current understanding is:

PatrickHarnett probably did break some contracts, though he never intentionally broke them and in fact he tried to take some precautions to avoid breaking the contracts. Still, he has an obligation to pay back the victims of his broken contracts at least the money that his victims directly lost (ie. the loan principal). Maybe he has a moral obligation to continue following the exact terms of the contract, but that seems to be impossible, and I'm not going to enforce that using the scammer tag.

When someone breaks a contract and ends up having to slowly repay debt, sometimes they get a scammer tag first and the tag is removed once their debts are paid. But since PatrickHarnett seems to be putting a lot of effort into paying his debts, and since he's always acted pretty honestly, I tend to think that he should not get a scammer tag unless he stops making payments on his debt.

Patrick rates this ruling AAA+, especially considering the ruling didn't take into account the new information in this thread showing that he actively deceived "investors" through his "newsletter". 

[MPOE-PR]

This part is completely false:

But since PatrickHarnett seems to be putting a lot of effort into paying his debts, and since he's always acted pretty honestly, I tend to think that he should not get a scammer tag unless he stops making payments on his debt.

He's put absolutely zero effort, and he's made payment in what amounts to a mockery (a couple percent). It would be barely enough to buy him flowers.

Please do read the thread.

Also, I would like you to make a statement re AugustoCrappo's allegations above. Are you in some sort of confederation with him re this entire discussion?

[augustocroppo]

And if you were on the football team AND had a car, you lost your virginity that year, guaranteed. High School is where the social experiment develops, where you're put on a life track. It's a wonder so many survive it into adulthood. Why didn't my parents explain all this to me? Why were there boys better prepared to be men, and others just left to flounder?

Is this you?

No. That is a comment made by an user identified as Keyster. The author of that blog entry is Paul Elam.

This indicates that you do not even know how to examine data collected from the Internet.

You missed my original comment few lines bellow of Keyster comment.

Fail...

By the way, this is not a thread about my character. You can open your own thread about me, as CharlieContent did.

[JoelKatz]

I think the Kraken fund would likely be a slam dunk case for a scammer tag. Even if he is making good faith efforts to repay that debt, he *started* that fund after Pirate was already in default and he fully knew that there was a good possibility Pirate would never repay a single Bitcoin. Nevertheless, he clearly personally guaranteed that principal. Even if he still personally believed that Pirate would pay back all or some of the money he owed "soon", I'm not at all convinced his investors shared that belief. It was specifically his guarantee that induced that investment. The only blame you can place on the investors is for foolishly believing Patrick's personal guarantee. And, of course, "You shouldn't have believed me" is not even a partial defense even if "You made the same mistake I did" is.

It seems I disagree somewhat with what's happening here. I think it's entirely fair to give people a "scammer" tag even if they're making good faith efforts to repay a debt. And I think it's quite likely that Patrick deserves one simply because even if you split the losses with his investors and give him a few years to pay, he still hasn't acknowledged the validity of the debt, committed to some reasonable schedule of payments, or actually made reasonable payments. Even if he's broke through no fault of his own, if he can't pay for his share of the damage he did, IMO he deserves a scammer tag. (Not because he's a scammer, but because he incurred obligations he couldn't even come close to satisfying, even after giving him every imaginable consideration.)

[Deprived]

When someone deposits at a bank, they don't accept to take any risk as to if the bank will or will not make good investments. If the bank cannot pay depositors, it has to default.

That's correct. But that's because a case where the losses are equally the fault of the bank and those who loaned the bank money are rare. However, if you imagine such a case, it should seem clear they should split the losses.

As a silly example, suppose I tell you that I feel really lucky on the slots today and that if you give me $50, I believe I'll win $100 and split the profits with you. Say you also believe that this is the case and therefore loan me the money, fully believing that I will win $100 and split the profits with you. In this case, if I lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on. When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so.

I keep looking at this thread hoping that somewhere you'll actually give an example that's even vaguely comparable to what happened.  But, yet again, you disappoint.

Here's your example rewritten to at least have a crude similarity to the situation 0 but with your conlusions left intact.

"As a silly example, suppose I ask you to lend me some money.  You know that a lot of people are borrowing money and gambling on the slots so you ask whether I intend to gamble on the slots.  I say no.  You ask whether I'll lend the money to others who gamble on slots and I say no.  Say you also believe what I tell you and therefore loan me money, fully believing that I won't gamble it on the slots or lend it to other who will gamble it on the slots.  In this case, if I lend the money to someone who gambles on the slots and they lose the $50, it's not fair for me to be responsible to you for the entire $50, lost profits, and so on.  When you have a common mistake, made equally by both parties, with no significantly greater fault falling on either party, it is inequitable to try to enforce the contract as agreed. In our gambling case, our contract never addresses the case where I lose money because neither of us considered it possible -- it can't say what should happen in that case because neither of us ever tried to make it do so."

Do you see now just how dumb it is?

Elsewhere you've claimed PH was somehow "trying to do the impossible".  Your claims that it's impossible to make 1% a week without investing in Pirate is unproven - yet your entire argument relies on it (if it's not totally impossible then your argument fails immediately - as you'd have to accept an investor couldn't know whether PH was investing/lending to such an alternative).  Somewhere you've somehow conflated "investments in pirate were going to fail" with "all investments paying 1%+ per week were invested directly or indirectly in pirate" and have constructed an entirely fallacious chain of evidence based on that very elementary mistake.  And now you keep on constructing different analagoies- none of which are actually analagous.

Here's a few pointers for your next attempt at an alternative comparable scenario.  It needs to contain the following elements:

1.  There's a well-known risk.
2.  The Investor asks the Investment whether they have exposure to that risk.
3.  The Investment indicates they have NO exposure to that risk (they do't say "Yes" as in your above-quoted dismal failure of an attempt at an analogy).
4.  The Investor does not know the details of how the investment will be used - and has no way to find out (Again, totally unlike your above example).
5.  The Investment uses the raised funds to expose themselves to the risk.  They claim this was unintentional.

You would appear to maybe be claiming that my points 2-4 are irrelevant as investing in Pirate was the ONLY thing PH could be doing.  Are we meant to take your word for that?  If we find ONE company that paid 1% per week around then without pirate exposure would that disprove it?  Or do you have some (so far unreleased) information indicating that PH, specifically, was bound to be invested in Pirate - even if others could make 1%+ per week without pirate exposure?

[JoelKatz]

You would appear to maybe be claiming that my points 2-4 are irrelevant as investing in Pirate was the ONLY thing PH could be doing.  Are we meant to take your word for that?  If we find ONE company that paid 1% per week around then without pirate exposure would that disprove it?  Or do you have some (so far unreleased) information indicating that PH, specifically, was bound to be invested in Pirate - even if others could make 1%+ per week without pirate exposure?

The point is that it was no secret what Patrick was doing or how he believed he was protecting himself from Pirate exposure. There's no evidence that Patrick didn't do what he said he was doing or that there was anything he could have or should have done differently (other than changing his business model). Whatever you believe is the reason he actually did have huge Pirate exposure, there's nothing to suggest that Patrick is any more at fault for that than those who loaned money to him -- they also had unexpected indirect Pirate exposure just like Patrick did. Both Patrick and his investors made precisely the same mistake and caused precisely the same harm in precisely the same way.

(Note that the above does *not* apply to Kraken or any funds taken after Pirate was in default.)

4.  The Investor does not know the details of how the investment will be used - and has no way to find out (Again, totally unlike your above example).

That's not true. Patrick's business model and practices were not secret, and there's no evidence whatsoever (and it totally defies common sense) to argue that what Patrick was doing was basically sound and Patrick just didn't quite say the right magic words or wave the right magic wand. That's just absurd. This is why I believe this kind of reasoning is an attempt to actively refuse to learn anything from this fiasco.

[Namworld]

You admitted a bank would rarely be at common fault, yet you know just as much by depositing at a bank that the deposits will be lent afterwards and you're just as much led to believe the banks loaning behavior is sound. Yet depositors are not sharing the risk. Your analogies/examples always show an example where the investment is disclosed, while Patrick Harnett acted as a bank, being the financial service provider selecting who to loan to. Those benefiting from those loans made the actual investments (and lied to Patrick). The depositor is yet not at fault for the bank mismanagement.

The depositors were not investing in the bank itself such as would be the case if they became shareholders. (In which point they would be equally liable to a loss from the unsound business such as in your example.) They merely deposited with Patrick Harnett providing a financial service:

Depositor > Patrick (bank) > Lendee > Investment or Personal Purchase

I claim your proposed scenario cannot apply on behalf that it was not an investment but a deposit. Patrick was providing a financial service and was not directly making an investment or disclosing the lendees and the specific reason they are taking a loan just like a bank. The wording strongly suggest that he works as a bank and that he takes the responsibility to loaning cash to sound requests and doing proper investigation. Now the bank needs to default, Patrick voided part of the deposits but did not default himself personally, despite that he was acting as the bank entity (which has to default), directly and personally pocketing any profit.

You didn't acknowledge or argue against this logic. That unlike your example, deposits did not constitute an investment in Patrick business, but a deposit just as a bank. Your examples always shows:

Investors > Funding of a business > Profit or loss shared among investors

While this situation is:
Patrick creates a business under his own name for accepting deposits and then re-lending at a higher rate for a profit.
Depositor > Patrick (bank) > Lendee > Investment or Personal Purchase

Depositors are actually entrusting the bank for safekeeping of deposits as well as receiving a small interest from the financial service provider (Patrick Harnett). The money is not invested, it is entrusted. The only thing people knew about their deposit is that:
- Patrick would loan the deposits to others.
- Patrick would pay them an interest on deposits.
- Patrick would investigate lendees.
- Patrick was not exposed to a ponzi.

Which are basically the same you'd expect and know when depositing in a bank. You agreed that depositors at a bank are rarely at common fault for the bank's bad investments and everything seems to point that the situation is very similar to deposits at a bank. You know just as much when depositing at a bank yet you do not accept any risk other than the bank declaring bankruptcy. In this case the bank is Patrick Harnett himself and he did not declare bankruptcy. He just voided partially the deposit amounts and said he'd pay deposits if he manage to get something back.