pirate payments list -- accounts paid: 23/459 - page 22.

myrkul

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Quote from: Bitcoin Oz on September 02, 2012, 11:01:22 PM

If the FBI considers this an illegal money laundering operation they will just seize any coins under proceeds of crime legislation.

How does one seize a wallet inside a true crypt hidden volume? Or a brain wallet?

I'm guessing torture or threats will be the answer. Well, if you are being tortured by the FBI, yes, you are in a world of shit.

+1

Bitcoin Oz

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Wat

If the FBI considers this an illegal money laundering operation they will just seize any coins under proceeds of crime legislation.

sadpandatech

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Quote from: ArticMine on September 02, 2012, 10:47:40 PM

Quote from: DeathAndTaxes on September 02, 2012, 10:38:14 PM

Interest payment by itself is meaningless. If you lend 100 BTC, get 20 BTC in interest and then the debtor defaults paying back 50%, 50 BTC you are looking at a 30 BTC net loss not a 20 BTC gain.

If we assume the scheme was just a ponzi then there was no profit. At best it was breakeven but likely some was wasted/stolen/spent by Pirate thus collectively investors have a net loss. Individually some investors may have a gain but others have a loss and net-net the IRS would be looking at a net reduction in revenue not a net gain.

Yes but there were investors who got more that their initial capital out. In other cases even if they subsequently re invested their interest after it was paid out to them this does not eliminate the requirement to withhold by pirateat40. It would be then up to the non US investors to file a return with the IRS and reclaim the withheld tax for example by claiming a loss due to a ponzi fraud. This is a huge tax mess in the case of the non US investors.

you're riding your bike off the path a bit. If the IRS caught up to him and wanted him to withhold tax they would have to first show that he paid some foreign person out to start with. And secondly they could not hold current liabilities that are direct deposits of lenders for that tax. They could make him show which upcoming payouts are foreign, etc and make him withhold tax on the interest but they would require a lot more info than what is there.

But, this made me think of something... If the IRS did catch up with him and was trying to collect unwitheld tax on him, they would have a need for him to be able to reconcile what parts of his current holdings are deposits and which are his profits. And then they would want proof of the deposit owners. BAHH, which would need to be more than just individual forum handles and BTC addresses though...

I don't know. I think we waste brain cells on this. ;p

ArticMine

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Quote from: DeathAndTaxes on September 02, 2012, 10:38:14 PM

Interest payment by itself is meaningless. If you lend 100 BTC, get 20 BTC in interest and then the debtor defaults paying back 50%, 50 BTC you are looking at a 30 BTC net loss not a 20 BTC gain.

If we assume the scheme was just a ponzi then there was no profit. At best it was breakeven but likely some was wasted/stolen/spent by Pirate thus collectively investors have a net loss. Individually some investors may have a gain but others have a loss and net-net the IRS would be looking at a net reduction in revenue not a net gain.

Yes but there were investors who got more that their initial capital out. In other cases even if they subsequently re invested their interest after it was paid out to them this does not eliminate the requirement to withhold by pirateat40. It would be then up to the non US investors to file a return with the IRS and reclaim the withheld tax for example by claiming a loss due to a ponzi fraud. This is a huge tax mess in the case of the non US investors.

DeathAndTaxes

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Gerald Davis

Interest payment by itself is meaningless. If you lend 100 BTC, get 20 BTC in interest and then the debtor defaults paying back 50%, 50 BTC you are looking at a 30 BTC net loss not a 20 BTC gain.

If we assume the scheme was just a ponzi then there was no profit. At best it was breakeven but likely some was wasted/stolen/spent by Pirate thus collectively investors have a net loss. Individually some investors may have a gain but others have a loss and net-net the IRS would be looking at a net reduction in revenue not a net gain.

ArticMine

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Quote from: DeathAndTaxes on September 02, 2012, 10:21:10 PM

Quote from: ArticMine on September 02, 2012, 09:33:01 PM

... and does not declare bankruptcy.

Bankruptcy doesn't allow you to discharge the debts of a criminal enterprise. I mean if it did imagine how ineffective the law would be. Madoffs bank accounts, assets, home, personal property (down to the pants in his closet) were sold by liquidators. His wife was left with nothing except assets which weren't communal property and considered protected assets (pension, 401K, etc). The courts even overturned the homestead protection in bankruptcy protection provisions and sold his house at auctions after agreeing with the lawyers for the victims that it the entire house and everything in it should be seen as the proceeds of a criminal enterprise.

This is very true. I would expect many of the creditors to fight a bankruptcy discharge on those grounds.

Quote from: DeathAndTaxes on September 02, 2012, 10:21:10 PM

Quote

I also suspect that the BST lenders are not the only creditors here. For example I would not be surprised if the IRS also has a substantial claim here over withholding taxes for interest payments to non US persons.

That would assume creditors actually got more than their principal back. If they got just their principal back there would be no gain. I doubt many creditors would be upset if they "only" got 100% of principal PLUS all interest (minus a 30% withholding by the IRS). I mean honestly at this point that would be a like getting a unicorn which shits gold coins.

Yes but what about the interest payments that were made between the start of BST in November of 2011 and August 2012 when the default occurred? This is where the tax liability very likely lies and it can be very substantial.

DeathAndTaxes

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Quote from: ArticMine on September 02, 2012, 09:33:01 PM

... and does not declare bankruptcy.

Bankruptcy doesn't allow you to discharge the debts of a criminal enterprise. I mean if it did imagine how ineffective the law would be. Madoffs bank accounts, assets, home, personal property (down to the pants in his closet) were sold by liquidators. His wife was left with nothing except assets which weren't communal property and considered protected assets (pension, 401K, etc). The courts even overturned the homestead protection in bankruptcy protection provisions and sold his house at auctions after agreeing with the lawyers for the victims that it the entire house and everything in it should be seen as the proceeds of a criminal enterprise.

Quote

I also suspect that the BST lenders are not the only creditors here. For example I would not be surprised if the IRS also has a substantial claim here over withholding taxes for interest payments to non US persons.

That would assume creditors actually got more than their principal back. If they got just their principal back there would be no gain. I doubt many creditors would be upset if they "only" got 100% of principal PLUS all interest (minus a 30% withholding by the IRS). I mean honestly at this point that would be a like getting a unicorn which shits gold coins.

DeathAndTaxes

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Gerald Davis

Quote from: justusranvier on September 02, 2012, 09:34:31 PM

Quote from: DeathAndTaxes on September 02, 2012, 09:22:30 PM

Everything is recoverable. It all depends on how far you want to take it.

A stone does not have an unlimited amount of blood to be squeezed out of it.

True but a stone may have property, stocks, bonds, pensions, property insurance, life insurance.
The stone may know of other stone's (parent, family, friends, colleges) who have assets, stock bonds, pensions, life insurance, etc.

Like I said it all depends on how far you are willing to take it.

Mousepotato

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So there's only been a narrow window of maybe 48-72 hrs where pirate has been sure of the timing of anything, and that was for the deadline to hand in info? That's it?

myrkul

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Quote from: ArticMine on September 02, 2012, 09:33:01 PM

Quote from: myrkul on September 02, 2012, 09:29:40 PM

Quote from: justusranvier on September 02, 2012, 09:17:36 PM

Quote from: myrkul on September 02, 2012, 09:11:26 PM

Quote from: Bitcoin Oz on September 02, 2012, 09:08:23 PM

How much do private investigators cost anyway ?

Pretty damn cheap, compared to the amount of debt that Pirate is withholding on.

But how much of that debt is recoverable?

As long as he's alive and able to work, 100%

... and does not declare bankruptcy. I also suspect that the BST lenders are not the only creditors here. For example I would not be surprised if the IRS also has a substantial claim here over withholding taxes for interest payments to non US persons.

In this case, bankruptcy would amount to a bank bail out. I am not in favor of bank bailouts. Wink

justusranvier

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Quote from: DeathAndTaxes on September 02, 2012, 09:22:30 PM

Everything is recoverable. It all depends on how far you want to take it.

A stone does not have an unlimited amount of blood to be squeezed out of it.

ArticMine

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Quote from: myrkul on September 02, 2012, 09:29:40 PM

Quote from: justusranvier on September 02, 2012, 09:17:36 PM

Quote from: myrkul on September 02, 2012, 09:11:26 PM

Quote from: Bitcoin Oz on September 02, 2012, 09:08:23 PM

How much do private investigators cost anyway ?

Pretty damn cheap, compared to the amount of debt that Pirate is withholding on.

But how much of that debt is recoverable?

As long as he's alive and able to work, 100%

... and does not declare bankruptcy. I also suspect that the BST lenders are not the only creditors here. For example I would not be surprised if the IRS also has a substantial claim here over withholding taxes for interest payments to non US persons.

myrkul

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